Why do Airlines Overbook?

摘要

1. Value of overbooking goes up as demand variability increases 2. There is incremental revenue in overbooking if no-show rate is small, even after accounting for DB costs 3. Restricting overbooking when lower fares are available leads to incremental revenue 4. Overbooking can be dilutive, especially in environments that lack advance purchase restrictions 5. The results presented here do not reflect US domestic industry practice 5.1 Optimal overbooking level presented results in ～40 DBs /10,000 passengers 5.2 Reported US industry DBs vary from 6 to 10 DBs /10,000 passengers.