Why airlines overbook flights and what bumped passengers can do about it

The video of a man being dragged off an overbooked United Airlines flight set to depart Chicago to Louisville, Ky., has sparked outrage against the airline over how the incident was handled, and for what many feel was an insufficient display of remorse.

By the end of the day, United's CEO Oscar Munoz put out another statement, saying that he deeply apologizes "to the customer forcibly removed and to all the customers aboard. No one should ever be mistreated this way." 

Meanwhile, the Department of Transportation's Office of Aviation Enforcement and Proceedings has begun an investigation, while here in Canada the federal government, prompted by the controversy, announced it will introduce legislation about bumping rules, part of a proposed air passenger bill of rights.

The United passenger's rough ejection has clearly raised questions about overbooking and bumping, the rights of passengers and what they can do to avoid being bumped from their seat.

Why airlines overbook

Airlines overbook — meaning they book passengers to more seats on a particular plane than are available — to maximize profit, calculating that a percentage of people will not show up for the flight. A seat that has already been sold, but remains empty, is a missed opportunity for the airline to generate more revenue.

It's a perfectly legal practice and based on a statistical analysis of previous passenger trends and the number of no-shows in the past. However, it's not an exact science, which leads to overbooked flights. 

What if airlines stop overbooking?

If airlines aren't able to recoup their lost revenue, passengers should expect airline ticket prices to go up, Charles Leocha, chairman and co-founder of the consumer advocacy group Travelers United, told Time magazine.

​"The airlines normally do a pretty good job on overbooking," he said. "People know it's coming, and they are willing to allow themselves to be bribed to get off the flight. People who are actually bumped and are really irritated about it are almost nonexistent — it's a tiny percentage. But the people who want lower prices are around 100 per cent."

What happens when an airline is overbooked

When an airline has overbooked a flight, some passengers will need to be bumped, and the airline will ask for volunteers to take another flight. If none are forthcoming, passengers will be involuntarily bumped. At that point, there's really not much a passenger can do.

According to the Canadian Transportation Agency, the Canadian carriers will "usually help passengers that are voluntarily or involuntarily "bumped" to find a seat on the next available flight at no additional cost."

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The U.S. Dept. of Transportation says it requires airlines to "ask people who aren't in a hurry" to give up their seats voluntarily in exchange for compensation. 

Who gets bumped?

Although it's been suggested that passengers who get bumped are randomly chosen, Canadian and U.S. carriers have their own set of guidelines to decide. Some airlines, according to the U.S. Department of Transportation, will bump passengers with the lowest fares first. Others bump the last passengers to check in.

Their decision may also be based on the passengers' fare class (meaning those in business class will likely avoid the bump), itinerary and frequent flyer membership.

How much compensation will be offered? 

Although there were no takers, passengers on the controversial United flight had reportedly been offered $400 and then $800 US vouchers and a hotel stay to give up their seats.

In Canada, the amount of compensation depends on the individual carrier. However, in 2013, the transportation agency ruled that Air Canada had to increase its amount of compensation for bumped passengers on domestic flights following a complaint launched by consumer advocate Gabor Lukacs.

Under the new rules, the airline was required to provide compensation in the amounts of $200, $400 or $800 per passenger, depending on whether the delay is less than two hours, between two and six hours, or more than six hours.

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In a recent interview, WestJet told CBC News that it doesn't intentionally overbook flights, but that passengers could be bumped if the airline has to swap a larger plane for a smaller one with fewer seats.

In those cases, compensation could reach $1,350, depending on when the passenger arrives at the final destination.

In the U.S., if a passenger will arrive between one and two hours later than planned — or between one and four hours for an international flight — the airline must pay the passenger twice the amount of the one-way fare to the destination, up to $675.

If the passenger will be delayed more than two hours — or four hours for international flights — the airline must pay four times the one-way fare, up to $1,350.

How often does overbooking happen?

Lukacs said Canadian airlines do not have to keep statistics on how often they overbook or bump passengers. But the transportation agency said it received 55 complaints about overbooking in 2015-16, less than four per cent of all air travel complaints filed.

CNN reported that a study conducted by MileCards.com shows that Delta and United are the airlines most likely to be overbooked, offering compensation to 10 and 7.2 volunteers, respectively, for every 10,000 passengers — compared with just 0.5 for JetBlue. (The overall industry average is 6.6.)

According to official data, more than 40,000 paying customers were bumped off U.S. flights last year against their will, although in the vast majority of cases that happens at the gate, well before the boarding process has begun.

That figure doesn't include those who voluntarily gave up their seat on oversold flights and received compensation.

According to the U.S. government, 434,000 passengers voluntarily gave up seats on the country's largest 12 airlines last year, including nearly 63,000 on United. The champion of overbookers was Delta Air Lines — about 130,000 passengers on Delta gave up their seats last year.

What can passengers do to avoid being bumped?

Passengers arriving late are usually the ones most likely to be bumped. You can minimize the chances of this happening by coming earlier to the airport.

The Canadian Transportation Agency said pre-selecting seats when making a reservation, which may require the payment of a fee, could also help avoid bumping.