United Airlines decided to have Dr David Dao dragged from the paid-for seat he was occupying at Chicago airport in order to free up space needed for flight crew. The following day, easyJet ordered a couple from London to leave their holiday flight from Luton to Catania because the airline had sold too many seats.

These events and others like them have put the practice of overbooking in the spotlight. Here, Simon Calder explains why airlines sell seats that don’t exist — and your rights when they guess wrong about the number of “no-shows”.

This guide applies for all flights from EU airports and on European airlines anywhere in the world; rules in the US and elsewhere differ, and in many countries there is no formal legislation about overbooking and denying boarding.

Why is a business able to sell a product it may not be able to supply, in this case an airline seat from A to B?

The narrow legal answer is that every airline (as far as I know) includes a clause in its ticket contract allowing it to deny boarding to any passenger it chooses. In addition, legislation such as the EC261 rules on passengers' rights implies that airlines can deny boarding, by specifying what they must do in the circumstances.

There are many aspects of laws affecting aviation that diverge from “normal” commerce, such as the distance-selling regulations and provisions for disabled passengers.

Airlines are allowed to overbook because real benefits flow from the practice, at least when it is carried out properly and generously.

Benefits? For whom?

The airline, obviously, because when it gets overbooking right (for example selling five extra tickets for a 180-seat plane) it earns hundreds of pounds in revenue at negligible marginal cost. Airlines say it helps keeps fares down; easyJet says: “Last year, nearly 3 million easyJet customers didn’t show for their flights. When this happens, it means aircraft leave with empty seats, increasing our costs and therefore the price you pay for your flight.” Many passengers have expressed scepticism about this claim, with one saying: “We still pay the same fares whether the seat turns out to be fictitious or not.”

Planes undoubtedly fly fuller, which means that the environmental impact per passenger is reduced. Perhaps the most tangible benefit is that passengers who need to travel urgently are able to buy tickets for a particular departure even if it is theoretically sold out.

Being able to buy a seat isn’t much help if you’re then turned away from the plane…

Agreed. But when a flight is “blown” (airline jargon for to many passengers turning up), if overbooking is handled properly only passengers who are happy to postpone their trip — in return for an inducement — will stay grounded.

The rules obliged the airline to offer incentives such as money or travel vouchers. The trouble is: the carrier is not compelled to keep upping the bribe until enough passengers are found. With time pressure a constant factor in aviation, the evidence is that on (too) many occasions, airlines rest to involuntary offloads.

I’m off the plane (or, more likely, have not been allowed on). What next?

You must be handed a written statement of your rights. Three important elements:

1: You are entitled to “re-routing, under comparable transport conditions, to their final destination at the earliest opportunity”.

2: The airline must immediately compensate you. The payment varies according to the length of the flight. Under 1,500km, for example London to Barcelona, the fixed rate is €250 (about £220); 1,500-3,500km, e.g. Edinburgh-Rome, €400 (£350); longer trips €600 (£525). But if the airline can get you to your destination within two/three/four hours respectively of the expected time, the compensation is halved.

3: Additional expenses such as meals and accommodation while you wait to reach your destination are also the airline’s responsibility. If the carrier fails to deliver care as stipulated, you should keep receipts for refreshments (not including alcohol) and accommodation in order to claim it back.

The airline says I can only travel on its flights, not a rival’s services. Is this correct?

No, but it is an issue that needs urgent clarification. For example easyJet says if it can get you to your destination no more than 48 hours late on its own services, it will not book a rival’s flights. But the rules specify “at the earliest opportunity”.

The Civil Aviation Authority is currently investigating the practice. A spokesperson for the CAA said: “The passenger rights around flight cancellations and re-routing are protected under European law and all UK airlines must comply with these regulations.

“The rules state that if a flight is cancelled you must be offered the choice between an alternative flight – or ‘re-route’ at the earliest opportunity or at a date that suits you, or offered a full refund.

“In circumstances where there is a significant difference in the time that a re-route can be offered on an airline’s own services and flights provided by other airlines, then it would be reasonable that a re-route should be made available on another airline.

“We recognise different airlines have different policies in regards to re-routing and as part of our continuing work to ensure airline compliance with passenger rights regulations, we will be carrying out a review of how effectively airlines re-route passengers when their flight is cancelled later this year.”

How can I minimise the chance of being denied boarding against my will?

Some airlines do not routinely overbook. The giant budget carrier, Ryanair, says it is "the only airline in Europe that does not overbook its flights".

On airlines which do overbook, the short, if unhelpful, answer is: don’t book a ticket on a popular flight. That means more or less any time during the school holidays, but especially outbound from the UK at the start of the holiday and inbound to Britain at the end; Fridays, Sunday afternoon/evening and Monday morning. Saturdays in summer can also be tricky. But with airlines filling a higher proportion of seats on planes than ever, most departures can be “oversold”.

Perhaps a more helpful answer is: check in as early as you can. Britain’s biggest budget airline, easyJet, says that the last people to check in online for a flight will be offloaded if more passengers turn up than the number of seats available — unless volunteers come forward. Other airlines, including British Airways, do the same, but joining a loyalty scheme can also help minimise the risk.

BA says: “We will usually deny boarding based upon check-in time, but we may also consider factors such as severe hardships, fare paid, and status within our frequent flier program.”

Check-in for easyJet opens 30 days before departure; for BA, it’s 24 hours. If you can’t check in online — and get a message saying something like, “We are unable to process this booking, please sort it out at the airport,” there’s a fair chance you’re in the frame for possibly being denied boarding.

Is simple greed on the part of the airline the only reason to be denied boarding?