So I'm in the Minneapolis airport the other day, on a layover on my way home to Seattle. There are two flights posted to Seattle (8:10pm and 9:40pm). I was on the later one, but wanted to get home earlier so I tried to get on the earlier one on Standby. No dice. Turns out they were paying off people (free roundtrips!) to volunteer to take the later flight (a difference of 1.5 hours!) because the earlier one was overbooked. Air travel just makes no sense.
Clearly we have the technology to do a much better job of matching supply and demand in the air transportation system. Why are the routes and schedules all fixed, when demand can fluctuate so wildly? I was in Orlando for a conference, and tens of thousands of people were flying into there over a few days from all over the world. You couldn't find a ticket on a convenient itinerary if you waited until 2 weeks before the event to book. Tickets were going for $900 or more. All the while I'm sure there were planes flying with lots of empty seats on other routes.
I think two weeks in advance is plenty of time for 80% of travelers to have a firm itinerary. I also think two weeks is plenty of time for an airline to run an optimization scenario and get all of the people who want to fly from points A(n) to points B(n) routed correctly to maximize efficiency in the system, minimize cost and travel time, and still provide a decent level of service. If you had to book travel in this way, I think you would end up with a much better experience overall.
Let's say I want to go to Orlando from Seattle on July 19th and return home on July 22nd. I need to be in Orlando by noon on the 19th. I want to be home before midnight on the 22nd. I want to make at most one stop in each direction. I don't want to pay through the nose for a middle seat on a flight where I can't get my bag into the overhead bin, the flight attendants are angry at everyone, and I get a thimblefull of water to go with my invisible bag of salty peanuts so that my chances of dehydration are maximized. So... I file my intentions with Optima Airlines at least two weeks in advance of my departure date. I pay a fixed rate per mile, not based on travel distance but based on direct distance between my start/end points. One week in advance, they email me my itinerary. I need to be somewhat flexible, but I'm guaranteed not to get bumped or miss a connection, and I'm going to get some good service. The routing is created based on the known demand for the total system on my travel dates. I buy the ticket just like buying a ticket to a concert - I can resell it or trade it with another traveler, but I can't get a refund and I can't change it.
Of course there's still a need for last-minute travel, but that can probably be handled as a 20% exception to the general system. Optima Airlines knows they can receive a profit booking 80% of their capacity at their rate per mile. If I need to fly from Seattle to Kansas City in two days, I can try to find an unbooked seat on some existing routing between here and there. My choices are probably much more limited, and I'll pay more, but at least I'm not offsetting some operating loss that the airline is incurring because they need to issue free tickets to some other yay-hoo, or because they are flying some 20% full 767 from Seattle to DC that day.
For some reason, we tolerate this world of air travel where you never know how much you're going to have to pay, you never know if you're going to get where you want to go when you want to go, and you never know if you're going to have a good experience or a bad one. It always feels like we're paying too much for what we get, so we keep looking for better deals. This causes the airlines to pack the planes fuller and take away services. We get more unhappy about what we're getting, so we want to pay less, and the cycle continues. How much does it really cost to get me from Seattle to Orlando? What exactly am I paying for?
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