What?
During travel request generation, a virtual pax already received a probability of whether they might cancel their flight or just not show up at the gate.
In the Fare Rules, one can specify whether cancellations are possible and at what price/penalty.
When a flight is actually started, no-shows/cancellations are taken from the actual “passenger list”, possibly decreasing handling fees to be paid or the effective turnaround time. There might also be refunds, possibly for the full trip based on stored booking data. This is speculative, though.
Why?
It’s yet another aspect that distinguishes different types of passengers. For business travellers, cancelling a trip on short notice might be a common thing to do, so they’ll take this into account when booking their trip already. The airline on the other hand needs to weight the risk of people cancelling their trip against the potential revenue to be generated. One of the main drivers of real-world business class prices which current-generation AirlineSim simply cannot model.
When?
Requires a fleshed out Distribution System.