While the deplorable incident on United didn’t involve an airline selling more seats than were available on the plane — the plane was full, and United decided to replace four passengers with crew — the practice of selling more tickets than there are seats on some flights (“overbooking”) has important benefits.
People miss their flights or change plans, and most airfares let them do this without forfeiting their full ticket price.
Without overbooking, planes would go out with more empty seats. The cost per passenger would be higher, and more expensive tickets would result. Most of the time airlines are right about how many tickets to sell. They know that passengers might oversleep an early morning departure at the end of a hard weekend in Las Vegas, but customers traveling on a Sunday night who have to get to work Monday morning are more likely to show up.
As a result, airlines rarely have too many passengers show up. When they guess wrong they ask passengers to take compensation. Out of over 600 million passengers boarding major U.S. airlines in 2015, half a million didn’t have seats. Most of those voluntarily gave up their seats accepting the airline’s offer. That’s why only 46,000 passengers were “involuntarily” denied boarding — a rate of just 0.09% — and the number of passengers involuntarily denied boarding has been on the decline for years. If airlines had to keep increasing their offer until that involuntary number were zero, it would raise costs. Before endorsing this, realize it redistributes income away from the poorest air travelers to those who can still afford to fly.
On the other hand, if an airline did try to run such an auction at the gate it would also take precious time and delay flights. In bad weather, planes might miss their window to take off. Flight crew might start to run out of hours they’re allowed to work late in the day. More flights would cancel. The maximum compensation set by the Transportation Department for people involuntarily denied boarding may not be the exact right amount, but it beats most alternatives.