The Twisted Logic Behind Why Airlines Sell Too Many Tickets

Each year, tens of thousands of passengers get bumped from their scheduled flights because of overbooking. A new video from TED-Ed explains why companies do it, and why you have a right to be pissed off when it happens.

Airlines aren’t the only companies that overbook. It happens in doctor’s offices, hotels, and any other place where appointments are often missed. As this Ted-Ed lesson from statistician Nina Klietsch makes clear, companies overbook not just to minimise losses and optimise resources — they do it to reap tremendous profits as well.

Klietsch does an excellent job explaining the complicated maths behind overbooking, while delving into some of the business ethics as well. As she rightly points out, airline companies are comfortable selling the same seat to two people knowing full well, based on statistical analysis, that customers have a predicable tendency to miss their flights. To the airlines, it’s simply a matter of probabilities.

But at what point does an airline go from being practical to being unethical? And how could these companies possibly calculate the inconvenience this practice causes to their customers?