Thursday, June 22, 2017 Edition: U.S. & World | Regional

Why Do Airlines Always Overbook?

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.
Airplane Tickets And Money
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.

 
Travelers In Crowded Airport
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.
Woman On Crowded Airplane
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.

 
Full Capacity Airplane
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.
Woman Bumped From Flight
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.

 

5 Comments

  1. Rachael Mills
    January 5, 2017 - 1:32 am

    Quite true, though I have never experienced such a situation when on a flight I wonder what my reaction will be when I do, I hope when I do it will be when I am on vacation and not in a hurry so I can enjoy the extra bucks that will come with volunteering to take the next flight.

    Reply
  2. Hannah
    January 5, 2017 - 5:30 am

    This is a great post. As a very frequent flyer and aviation enthusiast (and a husband in the travel industry) stuff like this always fascinates me. It’s definitely all about money and they calculate (through a very complex equation) how many people are unlikely to turn up or miss it and then overbook it, and just sometimes they get it wrong. It’s obviously so irritating for passengers, but to an extent you can kind of understand why they’d do it. If they can book more people and reap more…

    Reply
  3. Dan
    January 5, 2017 - 11:26 am

    It’s frustrating when you have to cancel your hotel reservation and spend your next hours on an airport chair but from a business perspective, it’s only natural to prioritize your profit. Why would you risk losing so much money? Also, from an environmental perspective, it would be an insane waste to lug around less passengers!

    Reply
  4. Jessie
    January 7, 2017 - 1:14 pm

    Overbooking sucks and from what I’ve seen the money you get simply don’t cover the hassle and the time you waste waiting for your next flight.

    Reply
  5. Britanica
    January 7, 2017 - 10:00 pm

    I have thankfully never had to go through being bumped because I have heard horror stories. Some people saying they would be stuck ALL night in the airport. I could not imagine that. I would be miserable! The worst that I have had happen to me was being late for my flight and having to get put on another. Just a 2 hour wait so no biggy. I lucked out that day.

    Reply

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