Airlines have mountains of data about ticket sales versus flights. They know that some small percentage of people who book a ticket will either cancel after or simply not show up, maybe because of an emergency or plans changed or whatever. Airlines also want to make the maximum amount of money per flight – having empty seats is costing them money considering that plane will be taking off regardless of the number of people onboard, burning fuel, and accumulating wear and tear (barring bad weather or last minute maintenance issue).
So they book a few more passengers than the plane can hold, betting that once the people who cancel are taken into account, they will have a full plane. Sometimes though, this doesn’t work out, everyone actually does show up. Then they have to find room on other flights.
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