Originally Posted by
Capot
And even if over-booking was not the problem in this instance, it's still a pernicious practice which should be stamped on by the regulators. I know there will always be no-shows, but no money is lost because of them.
For some grossly oversimplified numbers:
100 seat airplane. $100 per ticket. 5% oversell. $10,500 in revenue for the flight. 99.5% of the time, nobody gets bumped. 0.5% of the time, airline offers $200 and gets a volunteer. $10,400 on average net revenue for the flight.
Forbid overbooking. Now there's only $10,000 revenue for the flight. That $400 is coming out of the pockets of either the shareholders or the passengers. The airline has the pricing power, so the 4% is coming out of the passenger's pocket.
Given my own personal history (I've never been involuntarily bumped, and I've been delighted to volunteer in return for a $500 voucher when my schedule permitted), I'm unwilling to pay an extra 4% for my ticket to eliminate the practice of overbooking.