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Denied Boarding Compensation - The Shocking Truth About the Compensation Airlines Owe You

AuthorAda Kozłowska

Have you ever claimed denied boarding compensation? Depending on the time of year and destination, there’s a pretty good chance that the loudspeaker came on while you were waiting at the gate offering “generous” vouchers to anyone willing to take a later flight.

This overbooking of the flight is always presented as a mistake. But did you know that airlines overbook flights on purpose? Knowing a certain percentage of passengers tend to no-show, airlines overbook the seats in order to get a full flight. But, there are times when everyone does show up, in which case the airlines have to bank on the fact that enough people will be willing to take a voucher for a later flight.

Whenever this happens to me, I sit back feeling wonder and trepidation. One part of me wants to know how airlines manage to pull off this seemingly risky gamble … and another part of me fills with rage and stress at the idea that I might not be able to get on my flight. The flight that I paid good money for. The flight that I planned my entire trip around.

Then my imagination takes hold. What if not enough people take the vouchers? What will the airline workers do? As their announcement to offer vouchers increase in speed and sometimes even desperation, a sinking feeling starts to set in. I begin to envision some crazy fight scene over those precious few overbooked seats akin to what you’d see at the mall on Black Friday.

Of course, it always somehow works out in the end… at least it has in my experience. But not everyone is so lucky. So what should you do if you miss your flight due to overbooking? First things first: stand up for your rights.

An Explanation of “Denied Boarding”

The scenario described above of a passenger losing their seat due to overbooking is what’s called being “denied boarding”. Another phrase you might hear is that you’ve been “bumped” against your will. There’s one quick and easy way to make sure you’re not bumped from your next flight:

Check in for your flight as early as possible. Experienced air travelers know this. 

Those last checked in are the most at risk of being bumped, so use the airline’s mobile app or email notifications to check in early so you don’t have to worry.

The question is, how many people are affected by this trend? In the first half of 2013, more than 277,000 passengers were denied boarding. That’s out of a total of 305 million passengers. 31,500 of those 277,000 were involuntary, meaning the passengers did not agree to being bumped from their flights.

And not only were those involuntarily bumped inconvenienced, they were also undercompensated for it.

Airline Compensations for Denied Boarding

Quick: think of the last time you’ve heard the deal for flight delay vouchers being announced while you were waiting for a flight. What was the amount given? In my experience, it’s always been about $200 or so. At first glance, that doesn’t sound so bad! Get the airline to buy you a later flight and get an extra $200 for your time. A pretty great deal if your schedule is flexible, right? Wrong.

Now think about why the airlines are so accommodating with those vouchers. Why are they so willing to hand you a couple hundred bucks to skip your flight?

There’s a good reason those vouchers are so easy to get – it’s because the airlines actually owe you more than the amount of the voucher. Much more. In fact, federal law dictates that the airline pay those denied boarding 200% of their one-way fare, with a cap of $650.

This is if the next flight they book you on has you at your destination more than one hour later than the first flight, but less than two hours later. If your next flight has you at your destination more than two hours later than your original flight would have, then the airline owes you 400% of your one-way fare, with a cap of $1,300.00.

That $200 voucher doesn’t sound so great anymore, does it?

Know Your Rights – How to Get Compensation for Denied Boarding

Now that you know how much an airline really owes you for being denied boarding, it’s important to understand what to do if your flight has been overbooked and how to receive your compensation. According to The Code of Federal Regulations, Title 14, Aeronautics and Space, Part 250, the airline must compensate each passenger who’s involuntarily denied boarding by cash or check on the day and at the place this occurs.

So when the attendant is helping you book your next flight, pay special attention to the arrival time so you can make sure you’re compensated for exactly the right amount. It’s imperative that you do this because not all passengers are paid their due compensation.

Let’s return to the statistic above. Of the 277,000 cases in the first half of 2013, the 31,500 people who were involuntarily bumped were only compensated in the range of $391 – $439, despite the fact that they were owed somewhere between 200% and 400% of their one-way fare.

Given the low price of some domestic flights, this might not sound so bad. That’s why we ran the numbers. Based on the average cost of a one-way flight and the fact that over 70% of time delays are greater than two hours, the average compensation should be $643.60. That’s more than $200 higher than these cases in 2013 received!

Something to Consider on Your Next Flight

In these compensation laws, there is an important difference between voluntarily and involuntarily being bumped from your flight. If your schedule is flexible and you’d like to take the voucher, that means you voluntarily agreed to this compensation that the airlines have offered you.

However, if you’ve been involuntarily bumped – meaning you were denied boarding on your flight without accepting a voucher for a later flight – then you are owed compensation of 200-400% of your one-way fare, depending on the arrival time of your next flight. Keep this in mind when the attendant is booking your next flight so you can ensure that you’re being compensated fairly.

When it comes to voluntarily and involuntarily being bumped, 10 times the amount of people choose to go the voluntary route. Because of this, airlines can circumvent the regulations and wriggle their way out of the maximum payout that they’d owe if that same group of people chose not to take the vouchers. Something to consider the next time you hear that announcement at the gate…

Finally, there’s an important difference between delays due to denied boarding and being delayed on the tarmac. Once you’ve boarded the plane, your case no longer applies to these compensation rules. US airlines are not currently obligated to pay compensation to passengers in the case of long tarmac delays.

Final Word

The laws and regulations around being denied boarding, flight delays, and the like are not easily spelled out for passengers. That’s why it’s so important to know the differences of each type of delay and what they mean for you. Keep checking back to learn more about your airline compensation rights – so you can travel efficiently and receive what’s owed to you in the event of a delay.

Flight delays happen, but that doesn’t mean you have to accept them. You may be entitled to as much as $680 in compensation if your flight was delayed, canceled or overbooked within the last three years.

Image Credit: Anne Worner

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