Airlines offering vouchers for you to give up your seat. Why? How does the pricing scheme work?
In: Other
Overbooking. Airlines sell more tickets than available seats on airplanes because they know some people won’t show up. They have models predicting how many excess tickets they can sell. However, sometimes it happens that all the sold tickets show up (or more than available seats), and they offer vouchers to buy back the seats. Theoretically, the price they pay for the vouchers are small compared to revenues made from overbooking a flight.
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