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

There are always some people who don’t show up so airlines use algorithms to predict how much to overbook so the plane will be exactly full. Of course algorithms like that cannot be perfect so overbooks at the gate still happen here and there. Apparently the bottom line works out better for the airlines even if they have to pay a few people not to fly.