Firstly, overbooking a flight simply means the situation when an airline accepts reservations for a flight more than its seating capacity. It’s airlines’ way to ensure that they have a full plane when it takes-off. Empty seats are a financial drain on the airlines.
Why do airlines overbook?
To maximize profits. Overselling is a great way to avoid empty seats.
No-shows. Passengers don’t show up for flights and don’t bother to cancel their flights to Alice Spring from UK, (say) either.
Delayed or cancelled connecting flights. Airlines expect passengers from a connecting flight but due to too much delay/cancellation; may have to take off without them. Overbooking helps to fill up these empty seats.
Is overbooking legal?
Yes, over-booking is completely legal; helps guarantee the planes to be filled to their capacity, thus enabling maintain lower ticket prices.
How to airlines determine how much to over-book?
It’s based on extensive air travel statistical research (which is not fool-proof, though). Airlines invest in creating huge database of previous passengers’ records and past no-shows.
What should you do in case your flight is over-booked?
When statistics go wrong, airlines may ask for volunteers to be bumped off to another flight (say, flights to Lake City from London). Get off and be compensated with first-class flights/cash.
The best way is to prevent being denied boarding by checking in and picking seats early online (24-28 hours before departure) for your flights to South America from UK (for example).
Be polite and know your rights- If you are denied boarding, it’s your right to ask for compensation and a reasonable alternative flight option to get you to your destination. If you’re flying (say on flights to Orleans) out of the EU or on a European airline, familiarise yourself with the EU261 and know what you are entitled to.
Travel agents as White Magic Travels will help you in such circumstances.
Source: https://antalyahoneymoonpackages.blogspot.com/2023/01/why-do-flights-overbook-and-what-should.html