Overbooking and Bumping: How Airlines Make Profit on Passengers

Oprac. DelayFix

The phenomena behind the terms overbooking and bumping are well-known to many people who fly regularly. If a passenger of an airline encounters this kind of a problem, they have to know what steps to take and what to do next in order to lawfully receive compensation.

What is overbooking?

The aim of airlines is to make money. But the requirements concerning the transportation of passengers on planes are very restrictive. It is obvious that the more people are on a plane, the more proceeds go to the airline. However, very often people change their minds, do not appear at the boarding, or simply run late and miss it. As a result, some of the seats on a plane are free and unused. In order to avoid that, airlines sell more tickets than de facto there are seats on the plane, expecting that, in the end, someone will surely change their mind and not fly. De jure, this tactic is not chargeable. This is what overbooking means.


Overbooking vs. bumping

But the phenomenon of overbooking is not among those most problematic. Let us emphasise that in most cases, on any given flight, somebody will not appear at the boarding. Then there are no complications - there are enough seats, and the airline makes more money. However, if all passengers come to the airport, one of them has to be informed about the necessity of putting their flight off and about not being allowed to board the plane. This is what bumping is.


Legal regulations

Curiously enough, there are no legal regulations which would protect consumers from this kind of behaviour. From the point of view of the law, overbooking is legal. That is why there is no doubt that airlines will be making use of this sort of practices - because they are profitable for them. Thanks to these practices - among other things - airlines can offer their passengers lower ticket prices. Even though, as the Polish Ombudsman emphasises, overbooking is solely the carrier's fault, it is the passenger who decides to take the risk. The problem is, the airline does not even have to inform the passenger about this.


What can the passenger count on?

It is good to know what legal proceedings a consumer who was "bumped" can take. Importantly, despite the lack of regulations regarding overbooking, compensations for bumping are clearly defined. Here we can see a great willingness to protect consumers. European Union regulations, specifically the Flight Compensation Regulation 261/2004, shows that the recompense for a flight uncompleted because of the carrier as a result of overbooking is compensation and a ticket for the next flight. The phenomenon itself is not specified, which means that the regulations concerning a flight cancellation are binding also in the case of overbooking.


Amount of compensation

The regulation from 2004 informs that on the EU territory, flights under 1500 km entail a 250 euro compensation. That is the minimal amount since the passenger can point out a number of various inconveniences connected to the postponed take-off. Additionally, if the next flight is to take place the following day, the passenger is provided with accommodation in a hotel and with food vouchers. The bigger the distance of the original flight, the higher the amount of the compensation:

- under 1500 km - 250 euro,
- between 1500 km and 3500 km - 400 euro,
- over 3500 km - 600 euro.

 

A way to travel?

Of course, The Civil Aviation Authority accepts complaints against the workings of an airline when it comes to overbooking, but - as it turns out - they are not frequent. Why? First of all, because of the high compensations offered by airlines. Carriers make so much money on overbooking that taking care of the passengers in the case of bumping is fairly easy. It just pays off.

On the other hand, it also pays off for the passengers. That is because they can receive high compensations and this way simply travel cheaper. Sometimes passengers look for those kinds of routes on purpose. They learn how to get "bumped" in order to get compensation and a guarantee of a flight. Thanks to that, the price of a ticket is quickly recovered.

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