Airline passengers will be eligible to receive as much as $800 for being bumped from flights under a new federal rule that goes into effect next month.
The rule doubles the maximum compensation for bumped passengers. It was part of a package of measures announced by the Transportation Department today to strengthen consumer protections and ease flight delays going into the summer traveling season.
Airlines routinely overbook flights to ensure that as many seats as possible are sold, even if some travelers cancel at the last minute. Denied boardings have been on the rise in recent years as airlines have cut capacity even as demand for air travel has increased, making it harder to find enough passengers who will voluntarily agree to be bumped from an overbooked flight.
The amount of money paid to passengers is determined by the price of the ticket and the length of the delay. Passengers who are involuntarily bumped will receive up to $400 if they reach their destination within two hours of their original arrival time (four hours for international destinations). If the delay is longer, the maximum compensation increases to $800.
The existing limits of $200 and $400 have been in effect since 1978.
The actual amount of compensation is double a traveler’s one-way fare, up to the maximum amounts. For example, a passenger bumped from a domestic flight with a $300 ticket and delayed for more than two hours would receive $600.
The payment is in addition to the value of the passenger’s ticket, which the flier can use for alternate transportation or have refunded if not used. The compensation must be paid in cash, although the passenger can accept a travel voucher.
“It’s hard to compensate for a missed family occasion or business opportunity, but this rule will ensure fliers are more fairly reimbursed for their inconvenience,” U.S. Transportation Secretary Mary E. Peters said in a statement.
The payments do not apply in the case of cancellations, such as thousands of scrapped flights that hit American Airlines last week.
The new rule also expands bumping compensation to passengers on planes with 30 or more seats. The old rule applied only to planes seating at least 60 people.
Analysts said the new rule may force airlines to be more careful in their booking practices this summer. With most passengers now paying in advance and many traveling on nonrefundable tickets, the airlines should be able to cut down on overbooking without significantly hurting their revenue, they said.
“This is a good thing for passengers,” said Rick Seaney, chief executive of Farecompare.com, an airfare website. “The airline mergers and the inevitable cuts in capacity that are going to be occurring certainly give the airlines an incentive to overbook, and this will slow them down.”
The higher bumping compensation comes amid increasing demands for a federal air travelers’ bill of rights. Previous efforts to pass such a bill in Congress failed, but the chaotic conditions that followed American’s flight cancellations last week are fueling new debate on the issue.
The Air Transport Assn., which represents the nation’s largest carriers, submitted comments opposing the amount of the increases.
The Department of Transportation today also released new regulations that it hopes will ease congestion at airports in the New York City area this summer.