what are the economics of overbooking flights?

Question

Are airlines betting that the last marginal buyer pays so much more than the average cost to convince someone to volunteer to delay their flight?

In: 2

Answer 1

There’s a fairly consistent and small percentage of booked tickets that never end up showing to the gate, such as for last minute cancelations, missed connections, etc.

Airlines are aware of these and would rather not fly empty seats while also not selling potential travelers tickets.