Overbooking: what it is and how it works

You’re on time, you’ve done everything right and yet…when you get to the airport you’re told you can’t board because there’s no more seats. Thousands of travelers experience this problem every day, and it has a name: overbooking. Overbooking doesn’t leave anyone indifferent, and it isn’t well received by passengers, but it does correspond to a certain logic. We’ll tell you all about it.

What is overbooking?

As you can see, overbooking is very simple: for an airline, it means selling more tickets than there are seats on the plane.

Depending on the route, the time of year and other factors, it can be more or less intense, but you can be sure that it is practiced by all airlines on all flights.

Why do airlines overbook?

If the practice of overbooking is not appreciated or even often condemned by passengers, let’s start by agreeing on a subject on which there is unanimous agreement: airlines should avoid having empty seats on a plane as much as possible. And passengers too, for that matter.

From the airline’s point of view it’s pretty obvious: a plane that takes off with empty seats means money lost. The number of seats offered on a destination is finite, and it is not possible to compensate for an empty seat on a Monday flight with an extra seat on a Tuesday flight.

Let’s compare with a store. It sells less than expected on Monday, but there’s nothing preventing it from selling more the next day. On the other hand, if an airline puts a 200-seat plane on a daily rotation, if a flight leaves with only 100 passengers on Monday, it won’t be possible to put 300 people on the Tuesday flight.

There are many reasons why a passenger may not show up.

The most common reason is simply that he has missed his flight, either through no fault of his own, or simply because he is connecting and his incoming flight is too late.

Or he may have decided not to travel, even though his ticket is non-refundable. This hypothesis is not all that unlikely. When an airline, particularly a low-cost airline, runs a promotion and offers very low-priced tickets, some people book their stay well in advance and sometimes cannot travel. But at €30 a ticket they can afford it.

There are also last-minute cancellations. This is generally the case for holders of flexible exchangeable and refundable tickets, and therefore generally for business travelers (even if they travel in eco) and front-class travelers. Their agendas change quickly, sometimes at the last minute, so it must be possible to cancel or modify a ticket, even if it means paying a higher price.

And this doesn’t just apply to cancellations: passengers can simply change their ticket to a later date, or take an earlier flight because their appointment ended sooner than expected.

Knowing that sometimes a round-trip ticket is cheaper than a one-way ticket, it also happens that passengers buy a round-trip ticket but never make their return flight.

On average, between 15% and 20% of people who have bought a ticket for a flight do not show up for boarding, and the number of passengers who are ultimately prevented from boarding their originally scheduled flight is estimated at 12 per 10,000 in Europe.

How does overbooking work?

Knowing the above figures, the airlines make a simple mathematical calculation: they have to find a balance between the number of extra tickets sold and the cost they would incur if everyone showed up!

In the event of overbooking, an airline may have to pay two types of compensation.

Firstly, when the aircraft is full and passengers who were unable to board need to take the flight at all costs, compensation can be offered to volunteer passengers who agree to take the next flight and give up their seat. In my experience, European airlines are rather shy on the subject, whereas in the United States the compensation offered can be really motivating.

The second for passengers who were unable to board. We’ll talk about this later, but in the event of overbooking, passengers have rights and airlines have obligations: compensation, payment of accommodation if necessary, etc…

Airlines have a fairly detailed knowledge of the probability of a passenger not showing up for boarding. Over and above general statistics, they have figures that enable them, in a similar way to yield management, to know what percentage of passengers on a given route are likely to default on their reservations, depending on various factors.

They then weigh up the probability of having to turn someone away against the number of tickets sold, the resulting cost of compensation, the price of tickets sold to find a balance that makes them “sure to win”.In other words, the number of tickets it can sell so as not to lose money even if everyone shows up with a normal “no show” rate. If you’re a maths fan, you can find out more about the calculation method here or here.

How to avoid becoming a victim of overbooking?

However, there are a few best practices that can help you limit the risk of becoming a victim of overbooking.

First of all, check-in in advance online or by mobile phone. Most airlines offer the possibility of doing this 24 hours or more in advance, so you won’t be turned away because you’re one of the last to check-in.

After that, it’s up to you not to be late for boarding! So try to arrive a little early, especially if you’re not a “privileged” passenger with access to priority lanes and/or status on the airline’s frequent flyer program.

Join your airline’s loyalty program. This is by no means insurance against overbooking, but an airline will always pay a little more attention to a passenger who is a member of its program, especially if he has a high status!

Image : surbooking by Monkey Business Images via Shutterstock

Bertrand Duperrin
Bertrand Duperrinhttp://www.duperrin.com
Compulsive traveler, present in the French #avgeek community since the late 2000s and passionate about (long) travel since his youth, Bertrand Duperrin co-founded Travel Guys with Olivier Delestre in March 2015.
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