Question: Overbooking policies for major airlines. Airlines overbook flights in order to reduce the odds of flying with unused seats. An article in Transportation Research (Vol. 38, 2002) investigated the optimal overbooking policies for 10 major U.S. airlines. One of the variables measured for each airline was the compensation (in dollars) per bumped passenger required to maximize future revenue. These threshold levels of compensation for the 10 airlines are listed in the next table and saved in the OVERBOOK file. Suppose the data represent a sample of threshold compensation levels selected from all major airlines. Estimate the true mean threshold compensation level for all major airlines using a 90% confidence inter-val. Interpret the result.

Airline Threshold Compensation per Bumped Passenger

Alaska $2,112

America West 752

American 1,312

Continental 1,264

Delta 2,048

Northwest 1,104

Southwest 720

Trans World 1,456

United 1,520

US Air 1,392

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