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Hot topic: Why do airlines overbook flights?

Well, isn’t that a kick in the seat? We explain why airlines sell more spaces than they have on their planes and how it can actually be a good thing for passengers

Hot topic: Why do airlines overbook flights?
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Overbooked flights have been in the public consciousness ever since footage went viral of 69-year-old doctor David Dao being dragged, bloodied, from a United Airlines flight in order to make space for off-duty crew members. You probably saw the video circulating in mid-April; the ensuing chaos sparked a PR nightmare for the airline.

Since then, stories that otherwise wouldn’t have garnered much media attention, such as beauty range founder Jo Wood getting bumped from an easyJet flight from Spain, have kept the topic in the limelight.

The question is, why do airlines sell more seats than they have available? Aren’t seriously disgruntled customers, and the associated bad press, inevitable?

It may surprise you to learn airlines have been doing this for years, without too much controversy. “It’s long been standard practice, but social media means we hear more about it these days when things go wrong,” says Phil Bloomfield from airfare price comparison site, Cheapflights.co.uk.

Overbooking — or ‘yield management’ in aviation parlance — is the airlines’ attempt to generate as much revenue as possible from each seat. They work on the basis that for any given flight a certain number of passengers won’t show up,
so they can sell those seats twice. Sounds like rampant profiteering, right?

Well, yes and no. Customers missing flights are usually offered space on another plane — effectively taking up two seats — so, if airlines don’t oversell their cabin space, they’ll fly at a loss, with empty seats, which means higher airfares for you.

To minimise the incidents of having to reject and compensate customers, airlines use sophisticated algorithms based on past no-show data for each route. They factor in the weather, if the flight will be mostly for business trips, seasonality and major events, amid myriad other factors, to determine how many more tickets than available seats they’ll sell. It’s a gamble, but you can put money on fewer no-shows on flights from Turin to Cardiff, for instance, ahead of June’s Champions League final; accordingly, seats will be oversold by a much smaller margin.

Individual airlines set their own policies on whom to involuntarily bump, but travellers with just hand luggage are easiest because they don’t have to unload their baggage. Therefore, if you really need to travel, I’d suggest checking a suitcase — nice and early, too — as the later you check in, the more chance you have of losing your seat. Members of frequent flier schemes and those with higher ticket values are also more likely to fly.

According to the US Department of Transportation, 475,000 passengers were denied boarding on flights originating in the US last year because of overbooking. Just 40,629 of those were involuntarily bumped, which means a lot of travellers were happy to relinquish their seats.

Why? Because being bumped isn’t necessarily a bad thing. Airlines can offer money, upgrades, lounge access, airline vouchers and even Amazon gift cards to lure passengers away from their seats.

Naturally, some people try to capitalise on this system by booking busy routes and approaching staff in advance, offering their seats in the event of overbooking.

Much-reported incidents of five-digit remuneration shouldn’t be regarded as the norm, though. “Compensation is generally the cost of a hotel night or two, plus a bit extra to make up for any inconvenience,” says Phil Bloomfield. “But, using this as a way to offset holiday costs is risky, to say the least.”

Q&A

Do all airlines overbook?

The vast majority do, yes. Airlines have a very low profit margin, so most seem to find it a necessity. However, low-cost airline Norwegian says it doesn’t overbook flights — though it’s clearly in the business of undercutting the competition.

How much compensation can I expect if I get bumped?

In the EU, the Civil Aviation Authority says airlines must ask for volunteers before they bump passengers against their will; find them new flights; pay for overnight stays, food and drink; and compensate passengers €250 for journeys less than 1,500km, €400 for flights of 1,500-3,500km and €600 for further. In the US, mandatory compensation is based on how much their arrival will be delayed, with airlines paying between 200% and 400% of the price of the one-way fare, up to a maximum of $1,350.

Published in the Jul/Aug 2017 issue of National Geographic Traveller (UK)