Do Not Expect Overbooked Airlines to Go Away

Do not expect air carriers to stop their practice of overbooking anytime in the near future. Not even following the nightmare for public relations suffered by U.S. based United Airlines after one of its passengers was dragged from the plane screaming when the airline needed a free seat for one of its crew members.

Booking more passengers than seats available is too important to the profitability of airlines.

Of course, it is good for some of the passengers as well. Of the more than 475,000 people bumped from their flight last year on the 12 biggest airlines, over 90% did it voluntarily, which allowed them to receive a travel voucher or cash and a seat on a later flight.

Many people make large sums of money being bought to give up their seat, said David Neeleman the former CEO and founder of JetBlue.

However, much more important, the overbooking is crucial to how an airline makes its money and how it manages the millions of passengers crossing the skies of the U.S. each year.

Airlines sell more tickets than seats because they count on a number of the passengers not to fly on the flight they planned on.

If all the passengers then arrive at the gate and there are not enough seats available, it is much better for an airline to compensate a few and then rebook them.

Most of the passengers who volunteer to be bumped are given vouchers instead of cash, which limits the true cost to the particular airline.

A former Spirit Airlines CEO Ben Baldanza said that customers do not realize the number of people who do not show up for a flight and the amount of money that overbooking produces which is able to keep fares slightly lower than they otherwise would be.

Last year, airlines based in the U.S. filled over 82% of their seats with customers who were paying passengers, a stat called load factor. That was near a record high.

Banning the practice of overbooking by airlines would lower the load factor, and airlines would attempt to compensate which most likely means a ticket price increase or higher fees that would make it more expensive if a flight were missed.

Close to 40,000 passengers involuntarily were bumped from their flights last year amongst the largest carriers, which means they had to be reassigned. Those 40,000 passengers represent just 0.004% of the overall passengers on those airlines.

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