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Inside the Issue: Overbooked Flights and Bumping

The Department of Transportation (DOT) recently announced a series of proposed consumer rights initiatives designed to make flying a little less frustrating for you and me. But since these are only proposals, the public has 60 days to comment on the DOT's ideas. I'll be doing a series of in-depth breakdowns of these proposals, and I encourage all SmarterTravel readers to head over to regulationroom.org and share your thoughts on the DOT's plans. The DOT is trying to help you, so let's make sure its solutions actually work for real, live travelers.

Leading up to the DOT's announcement, the main buzz was that the DOT would announce new compensation limits for involuntarily bumped passengers. While we got a whole lot more than that, it seems fair to start with those bumping changes.

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The Basics: The heart of the DOT's changes is an inflation-adjusted increase to involuntary bumping compensation, and a plan to periodically adjust compensation amounts for inflation in the future. Currently, involuntarily bumped passengers can receive up to $400 if the carrier arranges substitute transportation scheduled to arrive at the passenger’s destination one to two hours after the passenger’s original scheduled arrival for domestic flights, and up to $800 for longer delays. The new figures would jump to $650 and $1,300 respectively.

The Problem: In a word, overbooking. Overbooking is the practice of selling more seats than an airline actually has. Overbooking dates back to the days when most tickets were fully refundable, and no-shows were much more common. Airlines would assume a certain amount of no-shows, and oversell their flights to compensate. These days, most travelers fly on cheap, nonrefundable tickets, which insulates airlines from the financial losses associated with no-shows in the refundable-ticket days.

Airlines have gotten pretty good at minimizing bumping. USA Today's Dan Reed writes, "Airlines' use computer programs to predict how many no-shows there'll be for a given flight. Last year, there were only 13 passengers bumped out of every 10,000 domestic passenger boardings. Historically, that number had been more than 20 per 10,000." According to the DOT, there were 69,234 involuntarily bumped individuals last year, a minute fraction of a percent of the 582 million passengers carried by U.S. airlines. Counting voluntarily bumped travelers, the number is well over 700,000.

The DOT also says that with airlines flying fewer, fuller flights, rebooking bumped passengers is difficult and will only get more so.

Like tarmac delays, bumping affects relatively few passengers but can be an extremely disruptive experience for the individuals involved—especially involuntary bumping. And, quite frankly, the practice of overbooking in the first place is questionable at best, considering most tickets these days are nonrefundable. Imagine showing up to a baseball game, only to be turned away because the stadium was oversold. That would go over well.

The Details: There's more to the problem, and the DOT's proposed solution, than simply raising compensation limits and paying attention to inflation:

  • The rules for bumping only apply to flights on aircraft designed to hold 30 people or more. The DOT suggests lowering this number to 19.
  • Airlines don't have to compensate passengers on "zero fare" tickets, typically award tickets or travel vouchers. The DOT proposes expanding bumping coverage to these individuals.
  • Many passengers don't even realize they are entitled to monetary compensation. According to the DOT, "Current rules require that airlines give out a written notice that includes [monetary] options. But gate agents may verbally offer only a voucher for future travel—and passengers in the process of being bumped may not have the time to stop and read all the fine print." The DOT suggests requiring gate agents to verbally offer a cash/check option along with a travel voucher.
  • The DOT also wants to require gate agents to provide more detailed information to passengers when a flight appears to be overbooked. The DOT feels passengers are not always fully aware of the risks associated with volunteering to be bumped versus waiting to see if they are involuntarily bumped. The DOT would have gate agents list the passengers in line to be bumped, explain why they're in said line, and how long it might take to be rebooked.

Pros and Cons to the Solution: On balance, there's a lot to like here. Increasing compensation limits ensures people will get a fairer shake, and the ongoing inflation adjustments mean that should continue to be true. Covering "zero-fare" travelers is also a good move. Just because these individuals didn't pay for the ticket in question doesn't mean they haven't paid plenty over the years, either through loyalty and lots of flights, or through some sort of cancellation for which they were given a voucher.

The procedural rules simply hold airlines to a minimum standard of common decency: Tell customers what they need to know so they can make an informed decision that works for them. That this doesn't already happen, or at least happens infrequently enough to warrant a DOT policy, is disappointing.

What these proposals don't do is end the practice of overbooking, or make bumping passengers prohibitively expensive for the airlines. The new compensation limits could potentially be a thorn in the airlines' sides, but will it deter them from overbooking? Probably not. The policy is quite clearly designed to take care of passengers rather than influence airline behavior. Whether or not you think that's a good or bad thing is up to you.

Your Turn: I'd love to hear what you think about this problem and the DOT's solutions for it, so leave a comment below and share your thoughts. More importantly, though, tell the DOT what you think at regulationroom.org. Thanks!

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