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Bloomberg
Overbooking is a necessity for the airline industry, according to Azul SA Chief Executive Officer and
JetBlue Airways Corp. founder David Neeleman.
“There are a lot of no-shows,†Neeleman said at the New York Stock Exchange, shortly after Azul went public. Shares closed up 7.2 percent from their offering price in U.S. trading. “What would hurt the airlines big time is if someone in Congress saw this and wanted to basically make it against the law to overbook flights,” Neeleman added.
Neeleman’s concern isn’t far-fetched. United’s now widely public fiasco has prompted New Jersey Governor Chris Christie and a Democratic Senator from Connecticut to urge the U.S. Department of Transportation to take appropriate action against the practice of overbooking. “The practice has become unconscionable by United and is abusing passengers coming through Newark Airport and around the nation without cause,” Christie wrote in his letter addressed to Transportation Secretary Elaine Chao.
Neeleman suggested giving more power to staff at the gates to offer higher compensation to people who volunteer to give up their seats. JetBlue, which Neeleman
is no longer a part of, doesn’t
overbook passengers.