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Why Do Airlines Overbook Their Flight?

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Worked for several department in an international airlines and hence, having an insider perspective of how air travel works.

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As a seasoned traveller, you may come across the term "overbooking" from time to time. However not so many travellers have actually experienced an overbooking situation and this gives rise to so many myths around overbooking and its consequences.

The truth is, overbooking happens more often than you realise it and it is in fact a very common practice within the airline industry. Occasionally overbooking does not end nicely and it leads to some denied boarding. This is when passengers actually feel the pain.

Why does overbooking happen?

The first question most people have is why overbooking happens in the first place. It is quite a unique phenomenon in the airline industry and you rarely hear in the other industries that someone "oversell" their products. So, why do airlines overbook their flights?

Quick answer, they want to maximise their revenue.

Longer answer, the airlines want to maximise their revenue by filling up their flights as much as possible, ideally at 100% full. To do that, they need to overbook their flights before the flight departure date well beyond 100% and expect the booking level would drop and land nicely at 100% of the flight capacity.

What? The booking level would drop?

Yes, and that is a fundamental reason why airlines overbook. There are several reasons for the booking level to drop.

  • Ticket change - Airline bookings are usually made well in advance and travellers change their plans. Especially for the business travellers, their plan is never really confirmed until they actually get on the flights. Depending on the ticket types they buy, some of these ticket change are even free of charge. Some of these ticket changes may happen very close to the departure date and when it happens, airlines have already lost the opportunity to sell the empty seat.
  • No show - Some travellers just do not turn up for the flights. It happens either when they make some very last-minute change in plan (otherwise they would have changed the ticket itinerary) or they are just late for the flight. In some cases the tickets allow the passengers to still change their itinerary after the no-show after paying a small no-show penalty. So the airlines would not be able to earn the air fare on that empty seats.

Therefore, overbooking is a technique airlines use to keep their flights full even when ticket change or no show happens. This allows them to earn more revenue from the flights.

But what if everyone does turn up in the end?

Well that is when the passengers would notice something. 302 passengers for 300 seats. Something will happen to the 2 passengers.


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How do airlines manage overbooking?

If everyone is turning up, the airlines need to do something about it because there are simply not enough seats to cater for everyone. To begin with airlines would try not to upset anyone by:

  • Upgrade / Downgrade - Very often, overbooking happens in a particular cabin only. It happens because the demand for a cabin is stronger than the others. This happens often during the holiday season when leisure traffic (primarily economy class demand) are very strong. In these cases, the flights sometimes still have seats available in other cabins. This would end up in 2 scenarios - upgrade or downgrade. In fact overbooking is one of the most common reasons for free upgrade. (Check out this other blog post I have: Some Mysteries About Free Upgrade at the Airport). But in some cases it would also end up in some passengers being downgraded, with some compensation, of course.
  • Offering an alternative flight - If there is an earlier flight available, the counter staff would proactive ask everyone at check-in whether they are willing to take the earlier flight. After all, if the passengers arrive at the airport early they would often be more than happy to avoid the waiting and arrive at the destination early. If there are enough passengers choosing to take the alternative flight, problem solved!
  • Looking for volunteers - If there are no alternatives, the airlines would be looking for passengers who are willing to be offloaded during check-in in exchange for some decent compensation. Usually it would be a package of cash plus some gestures from the airlines such as upgrade on the next flight. And of course, it would also include a "protection" flight option which would still take the passengers to their destination, but perhaps on a later flight or on another airlines. At this stage there may be some passengers who would put their hands up and be the volunteered to be offloaded. Depending on the airlines, the compensation package would be different.

But if these do not free up enough seats to cater for everyone, the last choice would be to deny boarding some passengers. Usually this would be the last passengers to show up at check-in. In some cases, when the last passengers include some gold card frequent flyer members then the airlines may reserve some seats for them and go for those without any status instead.


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How to protect yourself in a overbooking situation

If you do not want to be denied boarding when a flight is overbooked, here is what you need to know:

  • Check-in online - As mentioned, checking in earlier would give you a smaller chance to be denied boarding. Online check-in usually opens 24 or 48 hours before departure so you would be ahead of others if you check-in online. Plus, you can pick your seats ahead of those checking-in at the airport counter.
  • Know your rights - If you are denied boarding, it is your rights to ask for compensation, and at least a reasonable alternative flight option to get you to the destination. If you are flying out of the EU or on an European airlines, familiarise yourself with the EU261 and know what you are entitled.

Screaming and shouting at the staff would not really help because by the time when the decision is made, usually it is final. If you are very desperate to travel, let the airline staff know your reasons and see what they can do. I have seen travellers giving up their seats to someone who need to travel for compassionate reasons.

Otherwise, good luck and let's hope the pandemic is over soon and we can all travel again!

© 2021 KC Chung

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