Why do airlines sell too many tickets? - Nina Klietsch
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Have you ever sat in a doctor’s office for hours, despite having an appointment? Has a hotel turned down your reservation because it’s full? Have you been bumped off a flight that you paid for? These are all symptoms of overbooking, a practice where businesses sell or book more than their capacity. So why do they do it? Nina Klietsch explains the math behind this frustrating practice.
Additional Resources for you to Explore
It is unknown how many no-shows there are worldwide, but there must be several millions of them. For example, the German airline Lufthansa has 3 million passengers not show up annually on their booked flights. This is 5% of all booked passengers and correspond to 8700 empty jumbo jets.
First of all, overbooking is a tactic that serves airlines to make maximum profit. But as Simon Calder states in his article, when handled intelligently, overbooking is a strategy that can benefit travelers and the environment as well. There are some travelers who see overbooking as a lucrative opportunity. These passengers strategically book flights that are likely to be oversold in the hopes of being bumped. There are many guides on how to get bumped if you want. You can find some tips here: Guide to Being Bumped (or Not) and Make $1,300 next time you get bumped on a flight.
So, you get bumped. Do you have any rights? Passengers who are bumped have certain airline-specific rights and it is always good to know them. Take a look here or watch this video: Overbooked flights: Dealing with being bumped from a flight. Be prepared in case this happens to you!
There are several approaches to modelling the situation mathematically. We chose a simplified version learned by almost every high school student to demonstrate a real life application of statistics. Under the following link, you find all calculations concerning our example in this lesson. Take a look for some reinforcement of the concepts presented. Interactive GeoGebra-sheets to vary the parameters are also available here: Binomial Distribution and Revenue Function (with variable probability, seat capacity and number of sold tickets).
Please join the discussion section at the end of this lesson. Give your opinion about on whether airlines should be allowed to overbook flights.
Find statistics interesting? Take a look at these TED-Ed lessons!
First of all, overbooking is a tactic that serves airlines to make maximum profit. But as Simon Calder states in his article, when handled intelligently, overbooking is a strategy that can benefit travelers and the environment as well. There are some travelers who see overbooking as a lucrative opportunity. These passengers strategically book flights that are likely to be oversold in the hopes of being bumped. There are many guides on how to get bumped if you want. You can find some tips here: Guide to Being Bumped (or Not) and Make $1,300 next time you get bumped on a flight.
So, you get bumped. Do you have any rights? Passengers who are bumped have certain airline-specific rights and it is always good to know them. Take a look here or watch this video: Overbooked flights: Dealing with being bumped from a flight. Be prepared in case this happens to you!
There are several approaches to modelling the situation mathematically. We chose a simplified version learned by almost every high school student to demonstrate a real life application of statistics. Under the following link, you find all calculations concerning our example in this lesson. Take a look for some reinforcement of the concepts presented. Interactive GeoGebra-sheets to vary the parameters are also available here: Binomial Distribution and Revenue Function (with variable probability, seat capacity and number of sold tickets).
Please join the discussion section at the end of this lesson. Give your opinion about on whether airlines should be allowed to overbook flights.
Find statistics interesting? Take a look at these TED-Ed lessons!
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Meet The Creators
- Educator Nina Klietsch
- Director Anton Trofimov
- Script Editor Eleanor Nelsen
- Narrator Julianna Zarzycki
