engleski

The impact of EC denied boarding compensation regulation on Croatia airlines overbooking practice

Developed to reduce revenue loss due to no-show passengers, overbooking models are part of the airline revenue management and involve trading off between denied boarding and potential revenue loss from unsold or spoiled seats by accepting more reservations than actually available. In February 2004 the European Parliament passed Regulation 261/2004 which came into effect on 17 February 2005. It strengthened previous protection for customers and increased denied boarding compensation modulating it according to the flight distance. The paper provides a brief description of the airline overbooking concept and an overview of EU Regulation 261/2004 in a segment that applies to the denied boarding as well as the Croatian legislation that regulates this issue. Consequences on overbooking policies within small and medium sized airlines are discussed in the paper with special attention to Croatia Airlines. The paper investigates denied boarding compensation rules applied on Croatia Airlines scheduled domestic and international flights and estimates the degree of convergence between the regulation in the EU and in Croatia.

overbooking ; revenue management ; denied boarding compensation regulation ; Croatia Airlines

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