• Airlines regularly overbook full flights to maximize profits.
• The practice of overbooking flights also benefits consumers, though, because it allows them to purchase last minute tickets at reasonable prices.
• Airlines generally do not overbook first-class seats because that is their most lucrative fare class.
United Airlines is in full-on crisis mode after a video went viral showing a passenger being forcibly removed from the plane by police officers.
The incident occurred on Sunday evening on a plane traveling from Chicago to Louisville. In the video, the 69-year-old man, who has been identified as David Dao, is shown being yanked from his seat and dragged off the plane. The man was asked to get off the plane because the airline was trying to make room for crew members so that they could be repositioned for their next shift.
While this wasn't exactly a normal case of an airline overbooking a flight, it does raise the question of why airlines routinely oversell tickets for flights in the first place.
To put it simply, it's a way for airlines to ensure that they are making the most money on every seat.
"On the vast majority of flights that are full, and even when a flight is booked partially empty, there is always going to be some percentage of passengers that are no-shows," Vinay Bhaskara, Airways senior business analyst, said to Business Insider.
"So the airline has a situation where the minute that flight takes off, those empty seats that were sold to passengers, but are empty, are a lost revenue opportunity," Bhaskara said.
In order to avoid this, airlines regularly oversell tickets on most full flights. But they don't just pick a random number of extra tickets to sell.
"In terms of how many extra seats they sell, historically, they used to have a flat number across their entire system, but now with sophisticated computer methods, they actually do it based on the percentage of expected no-shows that they see in the data," Bhaskara said. "So if the Atlanta to New York route sees 15 no-shows on average per flight then over the course of the year, the next they will basically put in 15 extra seats. So they do it based on the data of how passengers behave on that specific route."
And most of the time this strategy works.
In fact, in 2016, some 51,000 passengers were involuntary denied boarding (that doesn't include those who volunteered) on US airlines. While that may seem like a big number, it's actually a tiny fraction (about .0062%) of the 823 million passengers who flew with US airlines last year.
Bhaskara said that airlines will usually overbook just about any flight that is full, but that doesn't mean they oversell every fare class.
"Usually, they won't overbook first class because that could tend to make your most lucrative passengers very angry," Bhaskara said.
While it might seem like the practice of overbooking only benefits the airlines, Bhaskara said it can also be a good thing for consumers. This is because it enables airlines to sell last minute tickets to consumers at a reasonable price. And because airlines use data to determine how many extra tickets to sell, usually everything works out and no one has to get bumped, he said.
Again, though, the incident that happened on the United plane was not a simple case of overbooking.
The airline needed seats so that it could reposition crew, according to a statement from United. The airline said that it offered $1,000 in exchange for customers to give up their seats, but no one volunteered.
Dao and several other passengers were then selected to deplane, but Dao refused, according to United, so the airline called the Chicago Aviation Police Department for assistance removing Dao.
Three police officers forcibly removed him from the plane. According to a statement from the Chicago Aviation Police Department, Dao hit his head on an armrest and was taken to the hospital with non-life threatening injuries. One of the police officers who was involved was put on leave on Monday and an investigation is ongoing, according to the statement.
United's CEO Oscar Munoz also issued a statement on Monday apologizing for having to "re-accommodate" passengers, however, he did not apologize for what happened to Dao.
In a separate United statement issued Monday, the company said the passenger was "disruptive and belligerent" and Munoz said in an email to employees that the crew onboard "followed established procedures for dealing with situations like this."