All airlines will oversell a flight - they obviously are thinking that they will get enough people who don't turn up, change thier flight late, cancel altogether or miss a connection. In this case, if they are still willing to sell a Y ticket, they flight isn't that oversold and they are taking the risk that a certain number of people won't make the flight.
How many people are there on the flight? 350 booked? It would be rare for every single person to turn up.