I think the whole way airlines manage these situations is appalling and we need some kind of regulation which requires an airline to place any child under the age of 14 seated next to a responsible adult. All other seating arrangements should take lower priority. Children are vulnerable and should be treated as such.
Having said that.. this story has a reasonable ending. The staff did take the necessary steps in the end to resolve the situation, and it sounds as if the computer booking was showing the children as adults, which may explain why this happened in the first place. it sounds as if the family are not particularly experienced flyers... but believe me, you got off fairly lightly. These boards are full of horror stories you wouldn't believe. I think in the end, Continental messed up but did their best to fix it.
Overbooking of flights is endemic in the industry and is no longer justified. In the past, it was necessary because so many tickets were flexible and the airlines had no method for predicting the actual numbers of passengers who would show up at the gate. Today, the majority of tickets sold are non-refundable and specific to the actual flight. The airlines know perfectly well what the demand levels are for each flight and overbooking is not justified.
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