The uncovered truth of overbooking in the airline industry

The recent United Airlines incident in which a passenger was pulled from his seat and dragged off the plane has put a spotlight on overbooking.

The practice is not uncommon in the airline industry. In fact, according to the LA Times, airlines have been overbooking seats since the 1950's, and it's completely under the guidelines of federal law.

RELATED: Check out rankings of America's top airlines

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A ranking of America's top airlines
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A ranking of America's top airlines

No. 12: Frontier Airlines

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No. 11: Spirit Airlines 

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No. 10: ExpressJet 

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No. 9: American Airlines 

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No. 8: United Airlines 

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No. 7: SkyWest Airlines 

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No. 6: Southwest Airlines 

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No. 5: Hawaiian Airlines 

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No. 4: JetBlue 

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No. 3: Virgin America

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No. 2: Delta Air Lines 

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No. 1: Alaska Airlines 

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Airlines know that on any particular flight not every passenger will show up. So, they created algorithms to calculate how many passengers might miss the flight.

That's because, if fliers purchased refundable tickets the airline loses money on empty seats. Their goal is to come close to filling the planes capacity, without overbooking. But sometimes they miss the mark.

According to the U.S. Transportation Department, last year, six out of every one hundred thousand passengers were involuntarily bumped from their flights.

SEE ALSO: Man dragged off United Airlines flight because plane was overbooked

Airlines have the ability to legally remove passengers from the plane voluntarily or involuntarily. However, the law requires the airline to ask for volunteers first.

When you're bumped from the plane, the airline will compensate you either two hundred of four hundred percent of the original fair, depending on when your new plane arrives.

Industry experts say there are several steps airlines can take to reduce the number of passengers who are booted involuntarily. Some even suggest getting rid of overselling all together.

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