Is overselling worth the bumps at the gate?
Below capacity, oversold tickets are pure revenue; above it, every extra passenger costs almost four fares. Averages cannot price that kink. Twenty thousand boarding days can.
Operations Intermediate Monte Carlo Pro engine
After you install, this is the model to open.
How Many Tickets Should You Oversell?
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
This one runs on a Pro engine, and every free install includes five full-quality runs on your own numbers, shared across all five Pro engines rather than five for each. After that, Pro is $199/year.
The answer
Twenty thousand simulated departures:
- Net revenue, mean
- $24.6K
- Sell-only-100 baseline
- $24.0K
- Bumps, mean / P95
- 1.4 / 5
The eight oversold seats are worth about $630 a flight on average, bought with 1.4 expected bumps. Retype tickets sold as 104, 106, 110 and rerun each: you are doing airline revenue management, trading profit against apologies at the gate. Hotels, clinics and tee times run the same arithmetic.
The model
A 100-seat flight, 108 tickets at $240, show rate uniform between 87% and 98%, and $900 compensation per bumped passenger.
| Seats / tickets sold | 100 / 108 |
| Show rate | uniform 87%-98% |
| Bump compensation | $900 |
| Net revenue and bumps | simulated |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
- How often will the reserve you set fall short?Is the Warranty Reserve Enough?
- How many people will the peak month need?Staff for the Season, Not the Average
- How far above average demand should you order?How Many Should I Order?
- What does staffing to an average day cost you?How Many People Should Be on Shift?
- How many extra seats before someone gets bumped?What Is the Best Number to Oversell?
- Everyone fits. Did anyone actually get what they wanted?Seat Everyone Without Breaking the Rules
Every model like this one, and the method behind them: Monte Carlo simulation.