The price people pay for seats when the plane is full is usually extraordinary - 3-10x a "normal fare". Thinking on the margin, the airline would get - say $70

The price people pay for seats when the plane is full is usually extraordinary - 3-10x a "normal fare". Thinking on the margin, the airline would get - say $700 - for the "overbooked" ticket in your example, and profit as long as someone will volunteer to be "bumped" for <$700* * Actually, the airline would probably profit even if they had to pay $700 to compensate the bumped person - since they're only giving out travel vouchers. Additionally, they can involuntarily deny boarding to someone for a cost lower than $700 (at least in most situations).