[tetrazine]

This is absolutely wrong, as many passengers do not make it to a flight, without being bumped. This rate is very high and makes overbooking valuable. The difference in cost includes both the relatively low bumping rate and the relatively high missed/cancelled flight rate. Many routes make very little revenue per flight (not per passenger) after overhead - at times in the hundreds of dollars, if I recall correctly - and would be completely unviable without overbooking.

[vannevar]

This is absolutely wrong, as many passengers do not make it to a flight, without being bumped.

Based on personal experience, I doubt this is true. Ask yourself how many times have you done this? I've flown hundreds of times, but have only missed a handful of flights. So the collision rate should be very close to the actual overbooking rate.

I haven't been able to find any figures on the actual rate of overbooking. But I did see a statement that 11% of bumps are involuntary. And the overall rate for involuntary denial is 0.09% according to this article, for instance: https://www.ft.com/content/e4cb5744-1e9d-11e7-a454-ab0442897....

That suggests that the overall rate of overbooking collisions is around 0.9%, which is close to my overbooking estimate of 1%. Even if I'm off by an order of magnitude, the impact on fares would be no more than 10%.

[mseebach]

You're just assuming overbooking away on a single, personal anecdote. Here's mine: I fly a lot on flexible tickets, and in periods have "missed" almost every flight I was scheduled on. But even your experience works out to about 1% missed flights (order of magnitude on "handful"/"hundreds"). If that pans out as average, then airlines should overbook each flight by a couple of seats, and expect to have to bump very few. "Just not overbooking" then amounts to removing a couple of seats from every flight. Only focusing on bumping completely misses this aspect.