why do airlines overbook

Airlines overbook flights primarily to maximize their revenue by ensuring that every seat on the plane is filled. This practice is based on the economic reality that some passengers do not show up for their flights due to cancellations, missed connections, or other reasons. To compensate for these no-shows, airlines sell more tickets than there are available seats. This strategy helps airlines avoid flying with empty seats, which are unprofitable, and keep ticket prices lower for consumers by maximizing capacity utilization. When more passengers show up than there are seats, airlines manage the situation by offering compensation to volunteers who give up their seats or, in rare cases, involuntarily bumping passengers with compensation options. Overbooking is a calculated risk based on historical data of no-show rates and is considered an efficient, standard practice in the airline industry that benefits both the airlines and consumers by providing more flight options and lower fares.