Absolutely. Overbooking is a must.

Overbooking a flight is a very complex algorith that takes into account lots of historical data. I have to give airlines credit for this. It is pretty amazing. A general rule for overbooking is about 5%. Slightly more on 6am flights. Slightly less when there are big groups (they are less likely to no-show). They also take into account possible weight restrictions. So many things can cause people to miss their flights. Oversleeping, long security lines, misconnect from delayed flights, go standby on an earlier flight, show up late due to traffic, long line at checkin, etc...etc...etc...

It is VERY RARE that people are denied boarding against their will. Let me say that again. It is VERY RARE that people are denied boarding against their will. I don't have a source off hand, but I want to say the rate is like .6 people per 10,000. That means you need to fly on about 17,000 flights before you are denied boarding against your will.
Actually, just dug up a source. The average for 2005 was .89 per 10,000. Still, involuntary denied boardings rarely happen.
http://www.consumeraffairs.com/news0...rformance.html

Slightly less rare is for people with flexible travel plans (ie. they don't have to get to their destination immediately) to accept compensation to take a later flight. Generally they are offered a seat (usually in first class) on the next available flight. In addition, they are given something like a free roundtrip ticket anywhere in the US, or something like a $300 travel voucher. Lots of people like this. You'd be surprised how many people jump at the opportunity. Usually the gate agent has more volunteers than they need.


My experience with this comes my dad, who was a CSR many years ago, and was the main customer service manager at one of the airlines major hub. He agrees with everything I said. Plus, usually when I fly stand-by (non-rev), I get on flights that are approximately 5% overbooked. The last three times I have flown were this spring break (MADNESS), the Friday before christmas from DIA, after a snowstorm closed it for 3 consecutive days, and the wednesday before thanksgiving (busiest travel day of the year). If I can get on a flight non-rev (behind retirees, revenue stand-bys, people on company business, and actual passengers when the plane is 5% overbooked) on these days, overbooking is not a problem.

Basically, give credit to the airlines. They know what they are doing in regards to overbooking. It is a great system.