I used to work for an airline. We didn’t overbook every flight, just ones on routes where we had more then one flight every day (so that if someone did ever have to be left behind we could accommodate them on another flight as quickly as possible)
The ‘no show’ rate for flights was between 4% and 7% and that was pretty reliable. It was very rare for everyone booked on a flight to actually turn up.
If 99% of the time a handful of passengers aren’t going to turn up, and you can fill some of those extra seats, it just makes commercial sense to do it.
I’ll use an example to help illustrate this.
You, a traveler for pure pleasure has spent a few weeks tripping around europe. You booked your return ticket well in advance and got a great deal (say $500 because it makes the math easier).
Me, a traveler for work, found out this morning that I need to go to New York for an important client meeting tomorrow. Crap, should have planned better but you know gotta keep the lights on. So I look up flights and lo and behold it’ll be $2000 for the ticket. Boss says go we need you there so I buy it.
We both get to the gate and look at that it’s oversold. So they make the announcement for someone to fly to NA tomorrow instead (the plane is not full so this is easy). You as a pleasure traveler don’t really care so you go up and take the $500 they give you and go to a pub to enjoy your extra day.
Now at the end of the day the airline comes out ahead. I overpaid for the same seat on the plane by $1500, you got $500 and the airline gets $1000 for free.
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.
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