Why do airlines seem to overbook flights so often, especially when they end up having to pay extra in rewards to passengers who give up their seats?

Question

It just seems like it happens so often, and airlines will sometimes offer you three times the price of the ticket just to stay a few extra hours. Seems like it’d be easy to just…stop selling tickets once the plane is full??

In: Economics

Answer 1

They overbook to ensure full capacity… they know that on average, X% of people who book a flight will cancel or change their flight. So they’re better off overselling the flight and compensating people if they have to bump people than flying with unnecessary empty seats