Answer to Question #99253 in Microeconomics for Francis

Question

What are the main costs and benefits that an airline company has to take into account when making a decision on selling more tickets for a flight than the number of seats on the airplane

Answer 1

They have to avoid losses. Empty seats are not profitable, so overbooking allows the airline to ensure that every seat on the airplane is making money for them. Hence it helps them to maximize profits.