I was told some years ago, before the meteoric rise of the LoCO's, that the regular airlines overbooked by 5%-ish. Indeed they were allowed to do so by the authorities. True, yes/no? there will be those who know.
Network airlines have always overbooked but not by a fixed percentage. Airline systems can accurately estimate how many no-shows each flight will experience.
For example a 07h00 Monday morning departure on a business route could have 0% oversales, while a 10h00 departure on a Wednesday, which has numerous inbound connections, could have 20~50% or even more, reflecting that some connecting passengers are not goint to make it. Time of day, day of week, day of year, proximity to holidays, connections, even road works all have different effects. Historical patterns also play a big factor: If a particular flight has been averaging no shows of 3-5% for the last 30 days then the likelihood that today's flight will have the same is very high.
Undersales also occur, for example on flights that pick up the spill from missed connections. So two flights an hour apart could have +20/-20 profiles.
Oversales has not been forbidden by any regulator for the simple reason that substantially more passengers benefit from the practice than are harmed by it. If you have ever been on a full, or almost full, flight some of the passengers are only there because of oversales. These never been quantified, but they are significant.
Consider a passenger seeking to secure a booking for an apparently full first flight Monday morning and the flight has a history of 20 no-shows. By overselling the flight by 10~15 seats the airline can accomodate this passenger. If overbooking wasn't permitted the customer will suffer additional consequential costs. i.e. Having to leave Sunday afternoon, disrupting weekend plans, and paying for a hotel and meals.
The real answer is that the airlines get it right almost every time, when they get it wrong they seek volunteers and, only if they can't find a volunteer the bumped customer is entitled to care, refund or reroute and compensation.
It really is a win-win situation, with very few losers.
While the LCC and ULCC models suggest they don't need to overbook, but even they will experience no-shows for whatever reason. If a flight always has a 2~3 seat no show factor, why shouldn't they accept a couple of extra bookings? They are happy and their extra customers are happy too.