Why airlines deliberately overbook full flights

HostWe has all been there, sitting at the gate, waiting to board, when the agent gets on the mic to offer money to anyone willing to take a later flight. It feels a bit like a scam, doesn't it? Why would a big company sell the same seat to two different people and just hope for the best?

GuestIt really comes down to a bet they're making. They know that on almost every flight, someone isn't going to show up. Maybe their car broke down, or they got stuck at work, or they just changed their mind at the last minute. To an airline, an empty seat is a product that just went bad, like milk that hit its sell-by date. They can't sell it once the door closes and the plane leaves. If they sell exactly one hundred seats for one hundred spots and five people don't show, that's five seats' worth of money they just lost. They see those empty chairs as a waste of fuel and space. So, they try to fill them by selling more tickets than they actually have.

HostSo they use us to cover their losses. But how do they know how many extra to sell? Is it just a guess?

GuestOh, it's much more than a guess. They have massive piles of data and they use it to figure out the odds for every single flight. They look at the time of day, the day of the week, and even what the weather is doing. They know that a business flight on a Tuesday morning is different from a flight to a beach town on a Friday. Business travelers might have a meeting run long and miss their flight, but families going on vacation almost always show up. They even look at the history of that specific route. If the six a-m flight from New York to Chicago usually has three people miss it, they feel safe selling three extra tickets. Most of the time, the math works out. The no-shows happen, the extra people get the seats, the plane is full, and the airline makes the most money they can.

HostBut what happens when the math fails? I have seen those videos of people being told they can't board even though they have a ticket in their hand. That doesn't feel like a math problem, it feels like a broken promise.

GuestThat's when it gets messy. When everyone actually shows up, they're stuck in a spot where they have to pay people to go away. They start by asking for volunteers. They'll offer a voucher for a few hundred dollars or maybe a gift card. If nobody takes it, they keep raising the price. I have seen them go up to a thousand dollars or more. They have run the numbers on that too. They would rather pay one person a huge amount of money once in a while than leave five seats empty every single day. It's a planned loss. They figure the extra money they make from overbooking all year long is way more than the cost of paying someone off every now and then.

HostI still find it hard to believe this actually saves us money. It feels like they're just squeezing more profit out of us while we take all the risk. Why should I care about their lost money if I'm the one stuck in the airport for six hours?

GuestWell, the airlines would tell you that if they didn't do this, every ticket would cost more. If they couldn't count on a full plane, they would've to raise prices for everyone to make sure the flight still pays for itself. But you're right to be unsure. It's mostly about the bottom line. And when they can't find a person to take the money, they have to force someone off the flight. They don't just pick a name out of a hat, either. They have a system. They usually look for the person who paid the lowest price for their ticket or the person who was the very last to check in. If you don't have a special status with the airline and you got a cheap deal, you're at the top of the list to get kicked off.

HostThat's cold. So the reward for finding a good deal on a flight is that you're the first one they throw under the bus?

GuestIt's a spreadsheet making a choice about your life. But there's a weird side to this. Some people have learned to play the system. They look for flights that are likely to be overbooked, like the last flight of the day on a holiday weekend. They book those flights specifically hoping to get bumped. If they get a thousand dollar voucher and a free hotel room, and they're not in a rush to get home, they basically just got a huge paycheck for hanging out in an airport for a night. There are people who fly for free all year just by playing this game.

HostThat sounds like a lot of work just to get a free flight. But wait, if they're so good at this math, why are there still flights that are half empty? I have been on planes where I had a whole row to myself.

GuestThat usually happens because the plane needs to be somewhere else. Let us say a plane is in a small town in the morning, but the airline needs that plane in a big city for a huge flight at noon. They have to fly the plane there even if only ten people want to go. In those cases, the math of overbooking doesn't matter as much as just moving the plane to the next gate. But on those big, busy routes between major cities, you can bet they're pushing those numbers to the limit. They might sell a flight to ten percent over its real size if the data says enough people will miss it.

HostIt feels like we're all just part of a giant machine that's trying to be as fast and cheap as possible, even if it makes our lives a bit more stressful.

GuestIt's a game of how well they can use their seats. As the computers get faster and the data gets better, the airlines are getting even better at this. They're using new tools to predict no-shows with even more accuracy. That means the money they pay to volunteers might actually start to go away because they'll almost never get the math wrong. The perfect flight for an airline is one where the very last person to board is the very last person who bought a ticket, and every single seat is filled with a paying customer.

HostThose vouchers are just the price they pay for making a mistake with their numbers.

GuestThey're betting against the mess of our daily lives, and most of the time, the house wins.

HostThe next time that gate agent asks for volunteers, I'll know I'm just watching a very expensive gamble play out in real time.