With the airlines cutting capacity and working like mad to jam more people onto flights, the inevitable has been happening more and more — 220,000 passengers were bumped from their flights during the first quarter of 2010.
In their zeal to squeeze a bit more profit out of a flight, airlines are overbooking more than ever. It seems that the income from last-minute full-fare passengers is worth the denied boarding fine these days.
Almost 220,000 passengers couldn’t get on flights in the first quarter even though they bought tickets, 25 percent more than a year earlier, U.S. Transportation Department data show. At that pace, so-called denied boardings in 2010 would surpass 2009’s 762,400 and reach the highest total since 2001.
About 89 percent of first-quarter bumpings were voluntary, with travelers accepting inducements such as vouchers to switch flights. The rate of involuntary bumpings jumped 37 percent from a year earlier to 1.73 for each 10,000 passengers, according to the DOT. The full-year 2009 rate of 1.19 was a 13-year high.
Go to www.regulationroom.org to read the actions that DOT is getting ready to take with their proposed rulemaking. Everyday Americans can comment on this dramatic rulemaking at regulationroom.org as well. It is one of the first times that the government has accepted these direct comments from the public via the Internet.
My colleague, Chris Elliott, notes, “Overbooking is the airline industry’s original sin. Selling more tickets than your have seats is a practice that predates deregulation, and the consequences of it have been written into law for half a century.”
Mr. Elliott who just completed an 11 part series on the Department of Transportation (DOT) proposed rulemaking that includes an increase in denied boarding compensation outlined the current situation.
At the moment, involuntarily bumped travelers are required to be given denied boarding compensation equal to 100 percent of the fare (200 percent if alternative transportation is not provided within the specified time limits) to the next stopover on the flight itinerary, up to the cap specified in the regulation.
Two years ago, the maximums were raised from $200 to $400 when alternative transportation is provided by the carrier within two hours for domestic flights and within four hours for international flights and from $400 to $800 otherwise.
But that’s not enough.
The proposed rulemaking from the DOT notes the continuing problem and proposes an increase in the denied boarding fines.
Since May 2008 when the new rule was issued, despite these higher denied boarding compensation amounts, we have seen an increase in involuntary denied boardings. Load factors are also increasing, making it less likely that “bumped” passengers are being conveniently accommodated on other flights.
We are therefore concerned about whether the current rule adequately encourages carriers to seek volunteers to give up their seats and whether the minimum denied boarding compensation amount adequately compensates those passengers that are involuntarily “bumped” from their flights.
The Department is proposing to make five changes in the existing requirements relating to denied boarding compensation (DBC):
• Carriers would be required to “advise each passenger solicited to volunteer for denied boarding, no later than the time the carrier solicits that passenger to volunteer, (1) whether he or she is in danger of being involuntarily denied boarding (in doing so, the carrier must fully disclose the boarding priority rules that the carrier will apply for that specific flight), and (2) the compensation the carrier is obligated to pay if the passenger is involuntarily denied boarding.”
• The Department is also proposing to increase the maximum amount of DBC that must be paid to involuntarily bumped passengers from $400 to $650 when alternative transportation is provided by the carrier within 2 hours for domestic flights and within 4 hours for international flights and from $800 to $1,300 otherwise.
• A third proposal would clarify the existing DBC rule by explicitly stating that the definition of “confirmed reserved space” on a flight includes seats held by zero-fare tickets (e.g., tickets obtained from consolidators, as part of a tour package, or by using frequent flyer miles), thus entitling the holders to DBC if bumped. These passengers would be entitled to compensation at the lowest rate paid by cash, check or credit card for
a comparable class of ticket on the same flight, up to the maximum amount currently specified.• The Department is also proposing to implement a bi-annual inflation adjustment to the maximum DBC levels based on changes in the CPI-U, with the amount of the adjustment rounded to the nearest $25. Incorporating this adjustment would obviate the need for periodic notice and comment rulemakings while maintaining the real value of the maximum compensation amounts set forth in the existing DBC rule.
• Another proposed amendment would ensure that involuntarily bumped passengers are informed orally of their ability to receive payment of DBC to which they are entitled by cash or check, rather than in the form of free or discounted air transportation.
Let’s summarize:
1. The airlines need to tell passengers who are in danger of being bumped what they would be awarded if they do not volunteer to be bumped.
2. The denied boarding compensation will be significantly increased
3. Denied boarding would apply to all passengers, including those traveling on frequent flier tickets, consolidator tickets and tour packages who are excluded under the current rules.
4. The denied boarding compensation will be pegged to inflation and adjusted every two years.
5. Airlines will be required to inform passengers that they can get denied boarding compensation in cash or check rather than airline script.
Again, let the DOT know how you feel about these new rules. Go to www.regulationroom.org and register, then let them have a piece of your mind.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
