Yesterday I shared the story of a passenger literally being dragged off an oversold United flight because they needed his seat. In light of that, I figure this is probably a good time to write about what you’re entitled to in the event you find yourself on an oversold flight. This post isn’t intended to reflect the exact situation that happened on Sunday night, but rather to address the topic more generally.
Why do airlines oversell flights?
Airlines use very complicated models to decide how many seats to sell on a particular flight. However, almost across the board they’ll sell more seats than actually exist on a plane. Why? Because they know that typically some passengers won’t make the flight.
Some passengers may show up to the airport too late, while other passengers might cancel their tickets last minute, while other passengers may miss their connection due to flight delays. They have incredibly complex models, and most of the times they work out perfectly. However, they’re not going to get stuff right all the time, and as a result there are occasionally situations where more passengers have checked in than the plane has seats.
Sometimes airlines even sell seats when they know it’s likely that they’ll need to bump people. Why? Because they’d rather take cash for an expensive, last minute ticket, and then give someone an airline credit for taking a different flight.
There are also a few other possible reasons for a flight being overbooked. For example, it could be that an airline has to transport crews somewhere as a priority to work another flight, or that a flight is weight restricted due to weather, cargo, etc.
Passengers are typically bumped from a flight in one of two ways — voluntarily or involuntarily.
How does a voluntary flight bump work?
When an airline knows that a flight is likely to be oversold, they’re required to solicit volunteers. Sometimes airlines will ask at check-in, and other times they’ll ask at the gate. When it comes to a voluntary denied boarding there are no regulations as to what you get.
A voluntary denied boarding is a win-win, since someone is getting something in return for taking a different flight, and everyone is happy. It’s a negotiation process, and compensation typically comes in the form of a voucher from the airline, and sometimes you can even negotiate a free upgrade in addition to (or sometimes in lieu of) a voucher.
If you’re having to overnight in a city as a result of this, the airline will typically give you a hotel room as well.
I’d say the average compensation is for an airline credit in the range of $200 to $800. How high the offer goes depends on how long you’ll be delayed, how many other people are interested in the bump, how badly they’re oversold, etc.
So it’s not unusual for them to first make a low offer, see if anyone accepts it, and then go higher if people don’t. However, gate agents are often limited in how high they can go, and airlines don’t give gate agents much incentive to make sure that passengers are voluntarily denied boarding, rather than involuntarily denied boarding. In other words, often their request for volunteers is just one quick announcement without much of a sales job.
How does an involuntary flight bump work?
When airlines can’t find volunteers and still have more passengers than seats, they need to involuntarily deny people boarding. Every airline has a clause in their contract of carriage allowing them to do this. Furthermore, airlines all have procedures they use for determining who gets bumped. Some airlines bump the people who don’t have seat assignments. Other airlines decide based on who checked in last. Others decide based on status and the booking class you have.
Do note that the number of passengers being involuntarily denied boarding was at a 20 year low in 2016. Out of roughly 660 million passengers last year, only 40,000 were involuntarily denied boarding, which is roughly 0.6 involuntary denied boardings per 10,000 seats.
If you’re involuntarily denied boarding, the Department of Transportation regulates what you’re entitled to. Here are the rules, as published by the DOT:
- If you are bumped involuntarily and the airline arranges substitute transportation that is scheduled to get you to your final destination (including later connections) within one hour of your original scheduled arrival time, there is no compensation.
- If the airline arranges substitute transportation that is scheduled to arrive at your destination between one and two hours after your original arrival time (between one and four hours on international flights), the airline must pay you an amount equal to 200% of your one-way fare to your final destination that day, with a $675 maximum.
- If the substitute transportation is scheduled to get you to your destination more than two hours later (four hours internationally), or if the airline does not make any substitute travel arrangements for you, the compensation doubles (400% of your one-way fare, $1350 maximum).
- If your ticket does not show a fare (for example, a frequent-flyer award ticket or a ticket issued by a consolidator), your denied boarding compensation is based on the lowest cash, check or credit card payment charged for a ticket in the same class of service (e.g., coach, first class) on that flight.
- You always get to keep your original ticket and use it on another flight. If you choose to make your own arrangements, you can request an “involuntary refund” for the ticket for the flight you were bumped from. The denied boarding compensation is essentially a payment for your inconvenience.
- If you paid for optional services on your original flight (e.g., seat selection, checked baggage) and you did not receive those services on your substitute flight or were required to pay a second time, the airline that bumped you must refund those payments to you.
As you can see, in many cases you’re entitled to a sizable cash payment, up to $1,350. However, here’s the dirty secret of the airlines. In a vast majority of cases they’ll only offer cash compensation if you specifically ask for it. Otherwise they’ll offer you the same voucher they gave anyone who was voluntarily denied boarding.
Does the current denied boarding system make sense?
In light of the situation that unfolded last night, and also in comparison to the rest of the world, does the current system make sense? First I’d say that airlines overselling flights is inevitable. Virtually all airlines around the world do it, and it’s a practice that isn’t going to change. However:
- Airlines need to do a better job of incentivizing and empowering frontline employees to do everything in their power to only voluntarily deny boarding to passengers; this should be done by making multiple announcements soliciting volunteers, improving their sales pitch for volunteers (by better explaining the compensation), asking for volunteers early and often, and even raising the offer more based on the response from passengers
- Perhaps the DOT should more closely regulate airlines’ involuntary denied boarding situations, by requiring airlines to proactively pay cash to customers when they’re involuntarily denied boarding (rather than only when passengers request it), and maybe increasing the penalties for involuntary denied boarding
Airlines make a business decision to oversell, so arguably they should have to suffer the consequences when their algorithms don’t work out. This could be done by them having to increase the voluntary denied boarding compensation until someone accepts it. Maybe that would cause them to change their tune a bit.
This has been a quickly-moving story with myriad updates. The full coverage of the United incident from the One Mile at a Time team is as follows: