"There are simply fewer free seats to place bumped passengers," said Headley. "So you have a passenger saying, 'Why me? Why am I the one person on this flight getting bumped when I bought a ticket like everyone else?'"
Airlines typically oversell their flights with the expectation a small percentage of those who bought tickets will not make that flight for a variety of reasons.
(Read More: Airlines' Airfare Hikes Not Faring Well in 2013)
With carriers trying to fill every seat and maximize the profit of every flight don't be surprised if the number of denied boardings continues to climb in the future.
More flights on-time, baggage problems drop
There is some good news in the latest Airline Quality Rankings.
More flights took off and arrived on-time in 2012 and the airlines did a better job handling baggage.
Last year, 81.8 percent of flights were on-time in the U.S. An increase of almost 2 percent compared to 2011. Some of that improvement is due to airlines thinning out their schedules and padding the amount of time it takes to make many of their flights.
"I think the experience has actually improved. Flight attendants are much more courteous. Flights leave on-time more often," said James Lowe, a college administrator in Mobile, Alabama who takes a half dozen flights a year.
(Read More: Now Boarding Sooner: Fliers Without Carry-Ons)
Meanwhile, baggage complaints have dropped in part because many fliers have cut back or even stopped checking bags due to fees many carriers now charge.
—By CNBC's Phil LeBeau; Follow him on Twitter: @Lebeaucarnews