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Overbooked Flights: What's It Worth to You?

Cindy Loose

Airlines routinely overbook flights, figuring from experience and no doubt complicated computer programs that there will be a certain number of no-shows. But what happens when they guess wrong, and what do you think they should pay you if you're the guy who doesn't get a seat due to their overbooking?

Currently, if the airline can't find volunteers, which they try to do by offering free flight vouchers, they must compensate those who are unwillingly bumped. On a domestic flight, if you're delayed one to two hours, the airline is supposed to give you the price of your one-way fare, up to a maximum $200. That's of course in addition to getting you on another flight. If you're delayed more than two hours, they must pay twice the one-way fare, up to $400. The delay times that trigger compensation, and the compensation, are higher for international flights.

The compensation hasn't changed since 1978. Finally, the Department of Transportation is considering doing one of four things:

1. Nothing
2. Increase the compensation to a max of $290 and $580.
3. Double the compensation, to a max of $400 and $800.
4. Remove the caps, so that you get whatever you paid for a one-way ticket as compensation if you're delayed one to two hours, and double whatever you paid for a ticket if you were delayed more than two hours.

Whaddya think?

By Cindy Loose |  October 3, 2007; 10:26 AM ET  | Category:  Air Travel , Cindy Loose
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How would you go about enforcing this right? Northwest Airlines stranded me at Chicago Midway airport overnight. They've offered me 12,000 Northwest bonus points, half of enough for a free domestic flight.

Posted by: aleks | October 3, 2007 10:45 AM

At a minimum, bumped travelers should get a new ticket + any remaining fare refunded in cash. However, it would be more appropriate to uplift the original ticket value by another 25%, say, to compensate for the extreme hassle that results from bumping for most travelers. And again, any fare not attributable to the new ticket should be refunded in cash. Forget points and miles...that's a "sleeves out of a vest" response.

I also see this as an excellent opportunity for a market solution. I'd love to see tickets that were "unbumpable" - i.e., you're guaranteed a seat and in exchange you pay a higher price. I believe many business travelers would jump at it with their employers' blessing.

Posted by: Leslie | October 3, 2007 11:47 AM

Has anyone approached the problem by reducing the number of no-shows? If, for example, there is a non-refundable fee attached to the reservation, people would not be so inclined as to not show up and the airlines wouldn't have to overbook. Make the "non-refundable" the entire cost of their ticket; THAT should eliminate most if not all of the no-shows and reduce the need for overbooking. Then, when a plane is fully booked, people could be placed on a stand-by list. Bumping would then be eliminated.

Posted by: L. Galola | October 3, 2007 12:38 PM

As to enforcing your bumping rights: The airlines will always offer you something if you are bumped. Usually they try to get away with offering you a voucher for a future flight, but if you know you're entitled to cash and ask for it, you'll get it. I've never heard of airlines messing around with this federal law.

Are you sure that your stranding by Northwest was due to being bumped? People confuse the bumping issue all the time. They see people being compensated for being bumped, and figure they are owed something every time they are inconvenienced. But the federal law applies only to the very specific case of bumping---meaning you didn't get the seat you contracted for because the airline overbooked and there wasn't room for you.

If you got stuck overnight for any other reason, there is no law about what you are owed. Instead, the airlines promise this or that in their contract of carriage under a variety of circumstances. If delay is weather related or another "act of God" over which the airline has no control, the airlines usually offer nothing.

Posted by: cindy loose | October 3, 2007 12:53 PM

As to the notion that some seats should be unbumpable, and you could pay for that priviledge. Although they don't spell it out, I think airlines in a way do that already. When someone needs to be bumped, the airline chooses the bumpee. I've always assumed that they don't choose the guy with the high priced ticket.

Posted by: cindy loose | October 3, 2007 12:55 PM

I was bumped just last week, on a flight from San Francisco to Dulles. Having just made the long jump from Osaka, I was not best pleased. I am still in negotiations with the airline, for compensation--the person at the desk offered me options, and I am not being difficult, but at the time, just wanted to get on the timeliest flight (with their airline or someone else's) that I could. What's most onerous is that I HAD just come from Japan, so did not have the option to call friends or family to pick me up, or know which hotel (other than the one at the airport) in which to stay.

The joys of travelling--I chalk it up to that, and no hard feelings, but, I was really wishing that they'd bumped someone else who was "just" doing that leg of the flight........

Posted by: skyebluescottie | October 3, 2007 1:22 PM

i was under the impression they bumped the people who checked in last, regardless of ticket status. once you check in, you have a seat number. maybe they hold the spaces for the full-price people, but regardless, as long as you check in early, you get a seat. although in theory i agree that the minimum compensation should be the price you paid for the ticket, if they can't hold up their end of the bargain.

however, i'd like to see some responsibility for other pieces of the puzzle moreso than in the bump-arena. like the time i showed up 2.5 hours early at dulles (earlier than is required) and the line to check luggage was so long that i missed the check-in window and was placed on standby. note that this was christmastime, so there was no way the airline would be able to get me home in time to make my return flight (when i ended up driving myself, not only was i not compensated but they tried to charge me $100 to keep my return ticket since i "missed my flight").

point being, they didn't have enough counter space or gate agents to handle their own passenger load, which they should have known was coming. maybe they should have spaced their flights out better? (about 10 flights left between 8 and 830am, then the next round was at about 10am, so all the 8/830 passengers showed up at the same time).

maybe if the airlines had to compensate anyone who showed up ontime and couldnt get checked in, they'd schedule and staff a little better.

but i guess that's another blog.

Posted by: ffx | October 3, 2007 1:39 PM

The simple solution is to end the overselling. If someone misses a flight, they don't get a refund.

Posted by: Anonymous | October 3, 2007 3:03 PM

From the airline's point of view, ending refundable tickets wouldn't be an attractive option. They charge a huge premium for refundable tickets, usually bought by business people who need flexiblity.

I don't know how many cancellations involve refundable and so-called non-refundable, but in fact non-refundable tickets aren't usually really non-refundable---you can usually change the date if you pay a penalty. Maybe the solution is to make non-refundable tickets really non-refundable, but that would create a huge hullabaloo.

Posted by: cindy loose | October 3, 2007 3:17 PM

How I long for the days of the late, great, FlyI. They NEVER overbooked.

Posted by: Mister Methane | October 3, 2007 5:08 PM

I can live with No Show means No Refund Rule if a companion rule is introduced: If You are delayed more than 2 Hours for ANY REASON, your fare is fully refunded. The airlines should have to pay for their self-produced scheduling slip-ups, just as their passengers would.

Posted by: Mister Methane | October 3, 2007 5:56 PM

Making non-refundable tickets really non-refundable penalizes the travelers who have to change their plans and do it ahead of time or because of a last-minute serious problem but still call and cancel. These people don't just "not show up."

Posted by: Ann | October 3, 2007 11:06 PM

A lot of the "no shows" built into the system are people who will not make connecting flights due to delays. Airlines are taking one problem, flight delays, and using it as an excuse to create another problem, overbooked flights. If so many flights were not overbooked then when a connection is missed it would be much easier to get on another flight.

Posted by: Amy | October 4, 2007 8:03 AM

I made the original post about not giving refunds to people who miss a flight. I'm not saying you can reschedule or what not before the flight, just that if you miss the flight you don't get a refund. Refundable tickets would still be refundable, up until the time the plane leaves. If you eliminate the need to overbook, then there is no more bumping and the issue goes away.

Posted by: Anonymous | October 4, 2007 9:31 AM

Rule 240 went out when the airline industry was deregulated in 1978. Each airline has its own policy for bumped passengers regarding reimbursement. Some airlines have none. Friendly skys.

Posted by: jim | October 7, 2007 9:10 AM

Jim--I beg to challenge your facts. With deregulation the feds dropped lots of rules about passenger treatment. But bumping rules remain---every airline must follow federal laws and provide compensation accordingly. The feds are currently thinking about raising the amounts, which are dependent on how long you are delayed due to a bump, but they have never dropped the rules. If you are bumped and delayed more than one hour as a result, you are entitled to cash. If you prefer to take the vouchers they offer, you're free to do so, but you're entitled to cash.

Posted by: cindy loose | October 7, 2007 2:10 PM

How about having the left testicle of the CEO of the airline removed for a two hour delay and then the right testicle removed for a four hour delay. After the CEO then the next ranking officers and the board of directors.

Posted by: Anonymous | October 7, 2007 7:21 PM

Compensation should absolutely be increased. Airlines do the math and determine how much overbooking they can tolerate in the name of higher profits. Raising the price of compensation is the only way to change their calculus and keep them from overbooking flights as egregiously. All caps should be removed, and airlines should pay cash (not vouchers of any kind) equal to 1x one-way fare for an ultimate delay of 1-2 hours, 2x one-way fare for an ultimate delay of 2-4 hours, and 3x one-way fare for an ultimate delay of more than 4 hours.

Posted by: adub | October 8, 2007 9:23 PM

I believe it is safe to suggest that if the cost of reimbursement goes up, the airlines will more than make it up in other "fees" they charge. Today, if you show up early enough at the airport, most airlines will offer to put you on an earlier flight at no extra cost (if sufficient space is available). That "free" change may disappear entirely if airlines must compensate displaced travelers at a higher rate.

A topic I would like to see resolved is "Truth in why a flight is delayed." We recently missed a connecting flight in Dulles due to "tower delays in take-offs from Rome." The fact, however, was that the plane did not begin boarding until it was due to takeoff. There was absolutely no mention of delays due to traffic or the tower. Once everyone was on board, the captain came on and said "due to the fact that we missed or original window to take off, the tower has delay our takeoff another 45 minutes." This translated in Dulles to "it wasn't our fault, it was a tower delay." Therefore, the best we could hope for was getting on the flight they rebooked us on the next day - no offer of hotel, transportation, etc... I believe there needs to be an independent source verifying why flights are delayed so that passengers get fair treatment.

Posted by: Jim | October 10, 2007 1:39 PM

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