When airlines overbook, know your rights

There are few things worse than getting bumped from a flight that you absolutely must be on because the airlines sold more seats than the plane holds. So how do airlines decide who stays and who goes when they can't get enough volunteers? 

A recent story about a man forcibly removed from a flight for refusing to exit after being "bumped" on an oversold flight caused quite a stir in the media. Overbooking happens but most passengers don't see it first-hand. If you check in and follow all the rules, like showing up at the gate well before the airline says you have to be there, being seated then suddenly told you have to leave is shocking and embarrassing. 

Airline employees traveling on pass benefits are used to being removed to make room for revenue-generating passengers, but when an airline has to choose among the paying passengers, things can get dicey. That's why each airline establishes a process to avoid having to remove passengers once accommodated. The only hard rules for overbooking are the compensation mandates that airlines are under for involuntarily bumping someone from a flight. For example, in the U.S., the rules state that each passenger involuntarily bumped can get 200 percent of their original one-way ticket price if they arrive at their intended destination more than two hours later than originally scheduled. If the delay is more than four hours, the compensation goes up to 400 percent of their one-way ticket price. So why do we rarely see these payouts? Aside from the fact that involuntary bumping is rare compared to the overall number of flights, passengers who volunteer their seats in exchange for a voucher mitigate the risks of involuntary bumping. 

Airlines are good at controlling their anticipated payload of passengers through a system called yield management. Their computers work much like today's stock market, adjusting seat inventory, prices and availability based on current and historical demand. Airlines know that during busy holiday periods, like the U.S. Thanksgiving in November, demand will be high and their overbooking ratio is adjusted accordingly. The airlines hedge their bets that there will be a certain number of people who fail to show up for their flights. 

There are several things to be aware of in overbooking situations that could lower your risk for getting bumped or increase your payout if you are. First, make sure you are more than on time for your flight. Airlines stipulate the latest you must be at the departure gate before you forfeit your seat and your right to compensation if the flight is overbooked. If you didn't get your seat in advance, be aware that when you are told "you will need to check with the gate agent for your seat" it means that you have likely been placed on the standby list for the next available seat. If you complied with all the check-in requirements, you should be eligible for compensation if you are bumped. If you volunteer to give up your space, however, you can remain on the standby list but you will be skipped over should your seat be needed. The compensation could be less rewarding too. 

When you hear a call for volunteers willing to give up their seats in exchange for a voucher, keep this in mind: The airlines will offer the lowest possible amount to volunteers unless the lack of offers raises the stakes. Some passengers like to wait out the airlines until the amount goes higher but there will likely be someone to take the bait for the lower amount. Temper your expectations accordingly. The other thing about vouchers is that airlines can restrict them to one year's validity and only for flights on their airline. Some also include blackout dates. Once a volunteer accepts the voucher, that passenger usually cannot pursue any action against the airline for overbooking because the matter is considered settled. 

When it comes to passengers who are bumped involuntarily, things can get interesting. If you meet all of the check-in requirements and did nothing to disqualify yourself, the airlines must pay you in cash (usually a check) for the appropriate amount of compensation. If you want maximum flexibility, deny any voucher offer because of the limitations stated above. Take the cash if you can. This also applies to any passenger who is asked to deplane because of an oversold situation. Airlines have their own pecking orders so expect the lowest-paying non-elite passenger with the latest check-in time to be the likeliest candidate for removal. Always read the airline's conditions of carriage (or contract) to understand the overbooking policy.