Why Do Airlines Overbook Flights?

Many passengers are surprised – and sometimes angered – when told a flight has been overbooked. But overbooking is not fraud. It is a recognised and lawful practice in aviation economics, backed by international and Nigerian regulations.

The Economics: The “Empty Core” Problem

During my Master’s program, I was taught Transport Economics by a globally renowned Economist, Prof Kenneth Button. Button is a professor of public policy at George Mason University Schar School of Policy and Government and a world-renowned expert on transportation policy.

Under his tutelage, I learnt the economics of transport networks, particularly the “Empty Core” problem of transport modes like airlines. Prof Button has published about 80 books and more than 400 academic papers in transport planning and economics. His recent books include Airline Deregulation: An International Perspective (David Fulton Publishing).

As I became a lawyer, i saw a clear nexus between my transport academic background, leadership roles in the public sector and current policy work to specialise in Transport law.

An airline seat is a perishable asset. Once a plane departs, any empty seat is lost revenue—forever. Hotels face the same problem with unsold rooms.

Airlines also operate with high fixed costs: fuel, crew, aircraft leases, and airport fees. These costs remain the same whether a flight is full or half-empty. To survive, airlines must maximise seat occupancy.

But passengers often fail to show up—missed connections, emergencies, or last-minute changes. To prevent seats from flying empty, airlines sell slightly more tickets than seats. This practice, called overbooking, ensures flights leave as full as possible.

How It Works in Practice

Globally, overbooking is routine. British Airways once disclosed that it oversold 500,000 seats in a year. Yet only about 24,000 passengers were rebooked—just 0.09% of travellers. For airlines, the benefit of full flights outweighs the occasional cost of compensating passengers.

The Legal Position: ICAO and NCAA Rules

The International Civil Aviation Organisation (ICAO) permits overbooking so long as airlines treat passengers fairly, starting by asking for volunteers if too many show up.

In Nigeria, the Nigerian Civil Aviation Regulations (Part 19) explicitly allow overbooking (Section 19.3.2) but also guarantee passenger rights:

Volunteers first before anyone is denied boarding (19.4.1).

Compensation: at least 25% of the ticket for domestic flights; 30% for international (19.8).

Refund or re-routing: passengers must be offered a refund or an alternative flight (19.9).

Care: meals, communication, and hotel if necessary while awaiting rebooking (19.10).

Downgrading: if placed in a lower class, passengers must be reimbursed the fare difference plus 30% (domestic) or 50% (international) within 30 days (19.11).

The Takeaway

Airlines overbook because economics demand it. Regulators allow it because it keeps the industry sustainable. But your rights are protected—you are entitled to compensation, care, refund or re-routing if you are affected.

So the next time you hear your flight is oversold, know this: it is legal, regulated, and you have remedies under the law.

At the junction of transport, law, and policy I share insights on how rules and systems shape the way we move and live.

Osita Chidoka
30 August 2025