Before the pandemic, the overbooking of flights by airlines was a common occurrence. However, with the surge in air travel demand due to revenge travel, flights are once again filling up. Some airlines have even returned to overbooking flights. But is this a detrimental practice? Not necessarily.
Numerous blogs and Facebook statuses talk about airlines overbooking flights. People even question the legality of overbooking and why Philippine airlines adopt this practice.
Surprisingly, overbooking is a standard practice and airlines intentionally engage in it to maximize profits.
Overbooking is not just practiced by our local airlines; it’s a worldwide phenomenon. Moreover, it’s not a recent trend; it has been a common practice for decades.
So why do airlines overbook when they know it can cause inconvenience to passengers?
Around 5% to 15% of passengers either miss their flights or fail to show up. For instance, if a Cebu Pacific flight with 190 seats is fully booked but 29 passengers don’t show up or miss their flights due to severe traffic in Metro Manila, only 161 passengers end up flying. If the aircraft takes off with only 161 passengers instead of the intended 190, it results in financial losses, particularly in an industry where profit margins are shrinking. Collectively, this means greater losses for the airline from a financial perspective.
“But don’t you purchase a seat when you buy a plane ticket?” Well, in advertisements, it appears as though you’re purchasing a seat, but in reality, you’re buying a journey from point A to point B. That’s it.
If airlines were to strictly book only the exact number of seats available on the aircraft, and the plane ended up flying with fewer passengers than initially booked, the airline would suffer financial losses due to unfulfilled revenue. This is the primary reason why airlines overbook flights: they aim to maximize potential profits. If 5% of passengers don’t show up, there’s still a chance to fill those seats rather than desperately trying to sell them on the day of the flight.
What do airlines do when there are passengers who could not board?
The first method involves seeking volunteers willing to alter their original schedule. These volunteers are rewarded with free travel vouchers and are rebooked on the next available flight without any additional costs. It’s more cost-effective for airlines to offer these vouchers to volunteers than to fly with empty seats. Additionally, a passenger has rights in case they’re denied boarding due to overbooking, although these rights may vary by country and region.
Airlines do not overbook flights at all times. They carefully analyze passenger statistics, travel destinations, seasonal trends, passenger behaviors, and specific events. During peak travel seasons, like Christmas and New Year, fewer passengers are likely to miss their flights, so airlines may limit or even avoid overbooking. In Metro Manila, factors such as traffic congestion, particularly on Fridays, during the rainy season, and on payday weekends, are also considered as potential causes for passengers missing their flights. Therefore, airlines might allocate a larger number of overbooked tickets during these peak periods. The number of overbooked tickets is based on numerous factors.
More determining factors
Another key factor that influences the number of overbooked tickets sold is the quantity of promo fares available. Passengers who take advantage of ultra-low promo fares have a higher tendency to miss their flights, and airlines account for the number of these promo seats sold.
Careful planning is required to decide the volume of overbooked tickets to be sold; this is not an overnight decision for airlines. They usually determine the overbooking percentage months or even a year in advance.
So, what should you do if your flight is overbooked and you encounter boarding issues? Firstly, do not vent your frustrations on the ground crew. They have no control over the situation. Instead, be aware of your rights as a passenger. The Civil Aeronautics Board (CAB) has provided a chart outlining your rights which you can invoke in accordance with the law.
If your schedule is flexible and there’s no urgency, consider volunteering. The compensation in the form of a free travel voucher can be quite appealing. And rest assured, you will be rebooked on the next available flight.
Overbooking is a common practice in the airline industry. It’s a global strategy, employed for decades, not just in the Philippines but worldwide.
First love never dies. I fell in love with airplanes and aviation when I was a kid. My dream was to become a pilot, but destiny led me to another path: to be an aviation digital media content creator and a small business owner. My passion for aviation inspires me to bring you quality content through my website and social accounts. Aviation is indeed in my blood and blog!
