We’ve all seen it done, or worse, been a victim of it. For reasons unknown to many travelers, airlines always overbook. Often, overbooking causes issues during the boarding process. This can be a huge advantage if your travel schedule is flexible and volunteering to get bumped earns you an easy grand. More often, however, it throws a wrench in peoples’ travel plans and wreaks havoc on their schedules. So why do airlines overbook? Why do they always sell extra tickets on flights—essentially selling a single seat to two people? There’s an easy answer to this, although the explanation isn’t quite so simple.
The Easy Answer
There is an easy answer to why airlines always overbook: money. Airlines are, after all, just another type of business. And businesses have a single main purpose, which is to make money. Everything the airline does is for its own benefit. The comfort they provide in the cabin is to encourage you to book again and spend more money. The movies they screen during flights are to make you enjoy your experience so you’ll patronize their airline again, or better yet, offer a good review and encourage others to spend money on flights. Even the safety inserts in your seat back pockets are to save money on legal issues and fines.
Is it bad for an airline to want to make as much money as possible? Of course not! Why would anybody start a business for any purpose other than to make a living and earn money? There’s nothing bad about advertising or selling tickets online, and there’s nothing inherently wrong with using strategies to make an extra profit. Selling the same seat to two people, however, can and does cause problems, which is why a lot of people have a problem with the practice. Despite the angst that overbooking has caused, airlines continue to do it, because it makes a lot of extra money. Here’s the theory behind it.
The Complicated Explanation
A recent viral Ted Talk by Nina Klietsch addresses the subject of overbooking. As Klietsch explains, an average of 15 passengers per flight simply do not show up. If the airline sold only one ticket per seat, 15 seats per flights would be left open. Therefore, they overbook by selling an average of 15 extra tickets per flight. This way, the fill every seat and make as much money as possible per flight.
Of course, this idea works mathematically on paper, but it doesn’t work out nearly as neatly in real life. Sometimes, more than 15 people fail to make their flight. Whoever is lucky enough to sit next to an empty seat will get to stretch out for a comfortable nap, and the airline still makes an extra few thousand off the people who didn’t show. Other times, fewer than 15 people miss the flights and suddenly, there are not enough seats for the passengers. When this happens, airlines usually request for volunteers to take the next flight. Those who do will get a nice chunk of cash for their trouble, which is often a more-than-welcome trade. The extra money that the airline has to spend on these people is nothing compared to what they’re making by overbooking every flight. It’s hardly a gamble for them; they may lose a little money on a particular flight, but they’re still making plenty of extra from overselling tickets on other planes.
The Negative Side
However, sometimes people just get bumped to a new flight involuntarily. This is the dark side of overbooking. Taxis, hotels, and dinner reservations have to be rescheduled. Family and friends have to rearrange their schedules to pick up the unlucky passengers at their destination. And luggage may get lost along the way. These issues are why most people have a problem with overbooking.
Will overbooking continue to be status quo for airlines? What about the hassle and ire it so often causes? If we’re realistic, we have to face the fact that as long as airlines are making good money on overbooking, they’ll continue to do it. Regardless of the risks it carries, overbooking saves space and makes money, we can safely assume that it will continue to be a popular business strategy.