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Government orders airlines to double involuntary bump compensation

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Government orders airlines to double involuntary bump compensation

Washington DC – The Transportation Department has ordered airlines to double the compensation paid to ticket buyers who are involuntarily bumped from their flights.  Under the new rules, people could get as much as $800 – this money is in addition to being booked on another flight to the passenger’s destination.  The department also issued new rules designed to relieve air traffic congestion including reducing the takeoff/landing slots at La Guardia Airport and opening up another west-bound route.

Transportation Secretary Mary Peters outlined the new bumping rules, which would take effect in May, and said involuntarily bumped passengers would receive up to $400 if the airline could get them to the destination within 2 hours domestically and 4 hours for international flights.  Delays beyond that would cost the airline up to $800 per passenger.

Airline routinely overbook some flights with the expectation that a certain percentage of people won’t show up.  When too many people do appear, the airlines first offer compensation for passengers who voluntarily want to be bumped.  This often is in the form of money, free tickets, upgrades, a night’s stay in a local hotel.  If not enough people voluntarily bump themselves, then the airlines must resort to booting people off involuntarily.  According to the Transportation Department, approximately one in 10,000 passengers were involuntarily bumped in 2007.

I voluntarily bumped myself from a LAX to Taipei flight last year for a night’s stay at a great hotel (not that big of a deal since I live in LA anyways), $500 cash and a flight to Taipei in the morning.  Not a bad way to go, although some people will argue that simply stepping foot into the hated LAX airport should merit much more money.

The new rules also lower the passenger threshold for compensation.  Currently, the rules state that flights with fewer than 60 people don’t require compensation for involuntarily bumped passengers.  However, that will be reduced to 30 passengers in May.

The Transportation Department has also authorized a new west-bound airway to relieve east-coast congestion.  This is sure to make airlines happy, but another rule has them fuming.  Airlines will lose up to 20% of their landing/takeoff slots at LaGuardia Airport.  Those slots will then be auctioned off to the highest bidder.

The department contends that airlines contribute to air and ground traffic congestion by using smaller planes at LaGuardia.  Adding an expense to the flight slots would force the airlines to switch to larger planes, according to Peters.  Flight delays across the nation often start with delays on the east coast.  Once a flight is delayed, it has a domino effect as it hops from airport to airport.