Note: we started working on this piece in December 2024 when there was a lot of discussion regarding the implementation of a flight cancellation and delay compensation scheme in Australia.
Not sure I follow. Which specific part/s of the compensation scheme leads to incentives for customers to game? And how does a customer know which flights are more likely to be subject to compensation?
For airlines, their ability to game it comes from having as close as possible to perfect information regarding optimization and redundancy parameters. What the compensation scheme does is give them more information by fixing their potential costs.
Doesn't that shift the gamification from the airlines to the consumer. I'd start booking on seats which I expect I can give up for high compensation.
Not sure I follow. Which specific part/s of the compensation scheme leads to incentives for customers to game? And how does a customer know which flights are more likely to be subject to compensation?
For airlines, their ability to game it comes from having as close as possible to perfect information regarding optimization and redundancy parameters. What the compensation scheme does is give them more information by fixing their potential costs.