International Finance

Give up your flight seat for money

IFM_ Air Travel Consumer Report

A traveller feels agitated and angry when he/she is told to give up their seat on a plane. But what if the person is offered compensation of USD 1,500 or maybe even USD 10,000? The choice may seem quite obvious to some people. A few months back, eight passengers on a Grand Rapids, Michigan to Minneapolis, Minnesota overbooked Delta flight made USD 10,000 after being asked to give up their seats. Despite what some individuals may think, compensating passengers who overbook is a recurring practice. In 2022, travellers were given up to USD 3,000 at New York’s LaGuardia Airport to disembark an aircraft to West Palm Beach, Florida. Although air travel disruptions are nothing new, this year has witnessed a sharp increase in the compensation airlines have paid the affected travellers.

According to the law, the compensation amount usually ranges from USD 775 to USD 1,550 depending on the cost of the traveller’s ticket and the length of the delay. However, some airlines are wise enough to spend well above these usual amounts to avoid PR disasters. Despite the significant advantages, overbooking flights has outraged many travellers. In the first week of June, Google searches for “expected flight delays tomorrow” jumped by more than 400%. As a result, many took to social media to complain about missing connecting flights or scheduled engagements. They blamed the overbooking of flights as the main reason behind this. Here is all you need to know about the controversial airline practice and how to deal with it.

The bottom line for these airlines is to make maximum profits. Airlines aim to ensure that every flight is full, just in case a few passengers decide to cancel their reservations or fail to show up, which happens quite often because of frequent weather delays causing people to miss connecting flights. To pay the price of those vacant flight seats, airlines resort to overselling flights. But this is something that doesn’t always work out. Overselling caused 7,143 confirmed bookings to be involuntarily denied boarding from an aircraft between January and March 2022, up from 742 over the same time frame in 2021 and 1,576 in 2020.

According to the latest Air Travel Consumer Report, around 34% of those travellers were flying on Frontier Airlines, 32% on Southwest Airlines, and 14% on American Airlines. Among major airlines, Delta Air Lines, United Airlines, Alaska Airlines, and JetBlue Airways had the least reports. During an interaction with TIME, Scott Keyes, the founder of Scott’s Cheap Flights, said, “Airlines make their best-educated guess at how many people they think are going to show up for that flight based on historical standards. It can end up backfiring if they’re wrong and aren’t able to convince volunteers to take the compensation they’re offering to take a later flight.”

Airlines often overbook both domestic and international flights as a result of their long-running bets on seat availability. The problem was brought to light in April 2017 when a Kentucky doctor was selected at random to give up his seat. But the Kentucky doctor refused to do so as he had patients to attend to the following day. He was not only violently pulled out of the overbooked United Airlines flight but also ended up bleeding and was knocked unconscious. After a video of the incident went viral, United Airlines was forced to make a big settlement amount of somewhere around USD 140 million.

The repercussions compelled the airline industry to alter its overselling strategy. Currently, the airline industry is providing travellers with far more money to prevent unnecessary PR attention. But things always don’t happen as you wish. A few months back, a traveller took to Twitter and blasted Southwest Airlines regarding an overbooked aircraft that caused their family to miss a cruise vacation, and that they were only given a USD 150 coupon as compensation because they were put on a standby flight.

Another passenger who gave up her seat on an overbooked aircraft from Fort Worth, Texas, to New York City said that American Airlines only gave a USD 150 coupon despite telling her that she would get USD 825 in credit. Kanya Grace, who was put on an alternative flight that arrived five hours late to her destination, said, “I understand being 21 is grown but I was also by myself and that can be scary at times. I felt like I was being played with and lied to by American Airlines.”

According to Tomasz Pawliszyn, the CEO of AirHelp, a for-profit air travel rights advocacy organization that assists passengers, airlines typically first ask passengers who aren’t in a rush to give up their seats voluntarily in exchange for compensation, but if they are still overbooked, airlines can deny a passenger a seat on an aircraft based on criteria that it establishes, such as the passenger’s check-in time, the fare paid by the passenger, or the passenger’s frequent flyer status. Checking in early may be helpful for travellers looking to avoid being bumped off a flight.

By law, airlines must provide checks or cash to passengers who are denied boarding, but the amount of compensation to be paid is up to them. Experts advise negotiating with airline employees to increase your compensation package before agreeing if you’re willing to give up your seat due to an overbooked aircraft.

Scott Keyes said, “Many times you can negotiate for things like a better flight, hotel vouchers, meal vouchers, and lounge passes. A lot of people miss this when it comes to getting bumped from an airline, but it’s not a one-way street. There’s a secret menu of options that airlines have at their disposal that they can offer you beyond money or credits.”

For instance, Scott Keyes advises asking airline employees to make their replacement flight non-stop or business class instead of the economy, in addition to negotiating the amount of money they provide, if you are refused to board. But only some airlines might be able to make accommodations.

“Like so many companies, airlines are profit-seeking corporations. They’re not going to start out by offering USD 10,000. But when they’re desperate enough, they will,” Scott Keyes added.

US airlines offer compensation for overbooked flights that cause you to reach your destination more than two hours from the actual arrival time. The minimum compensation rate must be USD 1,550 or 400% of your one-way cost, whichever is less, according to Department of Transportation regulations. The airline must compensate you at least USD 775 or 200% of your one-way cost, whichever is less, if your substitute transportation is due to arrive between one and two hours after your initial arrival time.

Involuntarily bumped passengers who are given alternate transportation within one hour of their scheduled arrival time are exempt from being paid compensation. According to a recent survey from AirHelp, over 95% of US citizens are not aware of these laws.

According to AirHelp CEO Tomasz Pawliszyn, the number of travellers visiting the website is up more than 50% from the previous month and the number of travellers requesting assistance with making compensation claims has doubled. “We see a significant increase in customers using our service,” Tomasz Pawliszyn said.

Visitors travelling to Europe this summer are slightly subject to different legalities. For preventable flight disruptions such as delays longer than three hours, cancellations, or denied boarding owing to overbooking, passengers on flights that are from the European Union member states are eligible for up to USD 700 in compensation per person.

“It’s a bit surprising when you think of it from a purely financial standpoint—why would airlines be offering USD 5,000 in compensation when under federal law, they’re only required to offer USD 1,550? But when you look at it from a PR perspective, the answer is very clear, because bumping people against their will makes them very upset as it should and can result in some pretty disastrous social media fodder,” Scott Keyes concluded.

It’s not just the general public who is dealing with these situations. A few months back, Hollywood actor Matthew Lewis vented out his frustration regarding overbooked flights. He said that Air Canada tore up his first-class ticket in his face.

Matthew Lewis, who is best known for playing Neville Longbottom in the “Harry Potter” movies, complained on Twitter, blaming Air Canada for forcing him to fly from Orlando to Toronto in economy class.

Matthew Lewis said that his first-class flight had to be cancelled due to overbooking and that when he was rebooked, the airline sent him back to coach.

On Twitter, Matthew Lewis wrote, “Confirmed. Air Canada is the worst airline in North America. And that’s saying something. I’ve been bumped before. I think it’s a ludicrous policy that we’ve inexplicably normalized but it is what it is. That said, that’s not my issue. I wasn’t told till boarding, no apology, no ask if I would like to rebook, and if I want a refund I have to call them.”

Not only in the US but overbooking flights has also been a common occurrence at airports all over the globe. AirAsia flyer Susan Yong and her family faced a harrowing tale, as reported by She booked a flight back in April 2022 for herself, her mother, her husband, and her in-laws to fly out to Chiang Mai, Thailand on 16 November 2022. After arriving at the airport on her travel day, Susan Yong was informed by the Air Asia check-in counter that her flight was overbooked and the families will be given another flight on the following day.

Susan Yong denied the offer as she reportedly had hotel and car bookings on the same day as their original flight. While the AirAsia staff offered a different flight at a later time and promised that Yong and her family members would be in Thailand on the same day, they changed the destination from Chiang Mai to Bangkok. Realizing that the places are almost 700km apart, Susan Yong declined this offer as well, resulting in the airlines issuing ‘handwritten tickets’ to board the original flight.

While the families proceeded to the boarding gate with those tickets, they were told by the staffers there that the individuals were on the ‘No Show’ list. However, AirAsia employees started assisting in sorting out the seats.

As the families were about to settle down inside the flight, they were ordered by an AirAsia staffer to disembark from the aircraft, as their ‘handwritten tickets don’t count’. Despite Susan Yong’s husband trying to initiate a discussion, the couple and the families were escorted out of the flight.

While the airlines offered a flight to Chiang Mai for the following day, along with night accommodations and an RM440 AA account credit, Yong declined everything and filed a police complaint. AirAsia hasn’t issued a response on this matter.

The Canadian way of securing flyers’ rights

Earlier 2022, Air Canada and 17 other aviation players, including the International Air Transport Association (IATA), asked a Federal Court of Appeal to quash compensation rules for flyers who encounter delays or lost/damaged luggage. The group’s argument cited Canada’s passenger rights charter, which took effect in July 2019, and said that it violates global standards and should be rendered invalid for international flights. However, the Canadian federal court dismissed the appeal challenging the passenger bill of rights – with the exception of one rule related to temporary luggage loss.

The bill of rights became more prominent during the COVID period as flight cancellations, lockdowns and border closures affected the airlines and flyers alike. In September, domestic Canadian laws were amended and a new regulation got added under which airlines will have to refund passengers if they cannot provide a new reservation within 48 hours of a flight cancellation or “lengthy delay.”

The updated regulations state that when cancellations and delays occur, passengers will still be protected if the airline cannot complete the itinerary within a reasonable period of time, as France Pégeot, CEO of the Canadian Transportation Agency (CTA), explained in June. WestJet’s vice-president of government relations, Andrew Gibbons, told the Globe and Mail that his company was “disappointed” with the new rule, as he felt that the regulation unfairly makes the airline the “sole provider of reimbursement” for delays it cannot control.

WestJet also pitched for federal agencies like the Canadian Air Transport Security Authority and the Canada Border Services Agency, along with the airports, to get involved in air passenger protections. A request from WestJet to suspend the Air Passenger Protection Regulations (APPR), launched by the airlines in 2019, was denied by the Federal Court of appeal in 2020. The airlines back then argued that the regulations exceed the CTA’s authority and went against the Montreal Convention, a multilateral treaty, by imposing higher compensation requirements for cancellations or lost luggage.

The Canadian state of Ottawa argued that there is no conflict between the passenger protections and the Montreal Convention. The passenger rights were finally upheld in December 2022 by the court and now the airlines will be required to pay passengers for flight delays, compensations, and boarding denial due to overbooking. Also, flyers affected by cancellations and long delays must be provided with food/drink, hotel accommodations, and access to communication. Airlines will have to pay the accommodation charges, along with the transportation costs.

Also, the airlines must assign seats to children aged 14, that too within close proximity to a parent/guardian with no extra charge. These regulatory reforms came after a 2017 incident in which two Montreal-bound Air Transat jets were diverted to Ottawa because of bad weather and held on the tarmac for close to six hours. While Air Transat apologized for the incident, it was fined USD 295,000 after a decision by the CTA, which put the carrier at fault. Passengers on board these two flights were also compensated.

On November 28, Minister of Transport Omar Alghabra noted the “unacceptable” issues faced by flyers at airports in 2022 alone, be it delayed/cancelled flights or misplaced luggage, indicating that the regulations securing passenger rights will be tightened further. Overbooking flights, especially during the festive seasons, has become a quick fix for airlines to make more money, at the expense of passengers’ conveniences. Booking the tickets early, planning for months, and then reaching the airport, only to be told by the airline staffers to give away the seats, doesn’t make sense for the passengers. While customer awareness on this issue matters, so does the state intervention, in terms of introducing stronger legislation against the overbooking practice.

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