Lots of passengers around the world missed their flights because of overbooking. A new video from TED-Ed explains why companies do it.
Airlines aren’t the only companies that overbook. It happens in doctor’s offices, hotels, and any other place where appointments are often missed. As this Ted-Ed lesson from statistician Nina Klietsch makes clear, companies overbook not just to minimize losses and optimize resources. They also do it to maximize profits.
Klietsch basically explains the math behind overbooking. Airline companies sell the same seat to two people knowing full well, based on statistical analysis, that customers have a predictable tendency to miss their flights.