To our surprise, every year around 50,000 people with valid plane tickets are bumped off flights because they’ve been overbooked.
Interestingly, airlines prefer overbooking their flights over wasting seats on those who do not show up for their flight.
If they sell the exact number of seats, they do not want to take the risk of wasting their seats in the case of passengers who do not show up. If they overbook their flights and bump off passengers, they have to pay penalties like money, free flights, hotel stays etc for the annoyed passengers. And yet they still make extra money.
Here is a small case study which shows how their calculations work:
1. After an intensive study airlines have come to a conclusion that the probability that each passenger will show up for their flight on time is 90 per cent.
2. If there are 180 seats on the plane and they sold exactly 180 tickets, it is most likely that only 162 passengers will take the flight.
3. If they sell exactly 180 tickets and each ticket costs $250, the airlines make $45,000 (180 x 250)
4. If they sell 15 extra tickets, the airlines make $48,750 (195 x 250).
5. If everyone shows up, 15 extra passengers get bumped and the airlines have to bear the cost of their next flight, their food and hotel stay etc. This is obviously a loss to the airlines.
6. The cost of bumping a passenger off is sometimes more than the cost of wasted seats for those who did not show up.
7. They make money from each ticket buyer and lose money from each passenger they bump off their flight. If a ticket is for $250, it costs the airline $800 for bumping off a passenger.
So when this amount is spread across airlines, the company actually makes money.
If you do not show up for your next flight, remember, you are helping the airline make some extra money!