Department of Transportation announced an adjustment to the maximum compensation airlines must pay to travelers “bumped” from flights and to airliners’ liability for lost or damaged baggage. Regulations require these periodic adjustments, keyed to the Consumer Price Index, every two years. The new rates, effective August 25, increase a bit from $650 to $675 for a short delay, from $1300 to $1350 for a longer delay, and from $3400 to $3500 for baggage liability.
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This bumping compensation adjustment is obviously not a big deal. The dollars are up only a little bit, and the ground rules remain the same:
- Compensation is due only to travelers who are denied boarding due to overbooking, not for any other reason. And travelers on flights in planes with fewer than 30 seats do not qualify, nor do travelers bumped form flights with 30-60 seats due to weight-and-balance safety requirements.
- Compensation is limited to travelers who have confirmed reservations and show up at the various boarding stages within airline time requirements.
- If the airline can get you to your final destination within an hour of your originally scheduled flight—either on one of its own flights or by transferring you to another airline—it owes you nothing. If it can get you there one to one or two hours later, it owes you twice the cost of your delayed flight, up to $675, and in addition, it must still get you there. If the scheduled delay is more than two hours, the airline owes you four times the ticket price, up to a max of $1350. Time limits are a bit looser for international flights.
- Airlines must offer immediate cash (or check or credit-card refund) compensation. They can offer vouchers for future travel, but travelers can refuse anything other than cash equivalent.
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These current U.S. rules are a lot weaker than current rules in the European Union, which call for mandatory compensation for delays, cancellation, and other flight interruptions. European airlines are trying to get those rules eased, but for now, if you’re returning from Europe or on a European line, you’re better off using claiming compensation under European rules.
If you’ve flown at all in the last few years, you probably know that when a flight is oversold, an airline first tries to entice volunteers off the plane with vouchers for future travel, or, less frequently, upgrades or frequent flyer miles. As a result, somewhere around 90% of travelers who have to get off an oversold flight do so voluntarily, in which case the monetary rules don’t apply.
This process represents a classic pure “marketplace”. Airlines make an initial offer; if nobody accepts that offer, airlines keep improving the offer until enough travelers volunteer. So if you’re on an overbooked flight, you can either wait it out until enough others volunteer or you can play the game. Some writers suggest making your own bid, such as double or triple the airline’s initial offer. Airlines would much rather offer a voucher than cash, so the voucher offers can go pretty high. But check the conditions on a voucher before you accept one. Will it remain valid long enough for you to use it? Can you transfer it to someone else? Is it limited to certain fare categories? Does it cover airline imposed fees? And also consider how much of a delay before the time the airline promises to get you to your final destination.
Some travelers make a game of trying for big-payout vouchers. If you have the flexibility, you can knock a lot off a future airline ticket. Just be sure you can actually use the promised compensation.
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