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Transportation Department Raises Payouts for Denied Boarding Compensation and Lost Luggage

Transportation Department Raises Payouts for Denied Boarding Compensation and Lost Luggage
Joe Cortez

Flyers who are denied boarding from their flight will now receive even more compensation for their inconvenience, after the U.S. Department of Transportation revised rules on denied boarding requirements. Not only can passengers no longer be involuntarily denied boarding if they are checked in and aboard an aircraft, but those who are denied must be given a cash payout.

New rules adopted by the U.S. Department of Transportation this month prevents boarded flyers from being involuntarily removed by airlines, while adjusting the amount of compensation due to those who are denied boarding. The new rules were published in the Federal Register, and will go into effect on April 21, 2021.

Rules Prevent Airlines from Removing Flyers, Increases Payouts for Lost and Damaged Luggage

Under the new rules, airlines are no longer allowed to involuntarily remove flyers from an outbound aircraft “…after the passenger’s boarding pass has been collected or scanned and the passenger has boarded.” Instead, airlines must solicit volunteers for any flight that is projected to be overbooked, offering a cash payout as part of an incentive. Once it goes into effect, the rule will state: “Carriers must proactively offer to pay compensation to a passenger who is voluntarily or involuntarily denied boarding on an oversold flight, rather than waiting until the passenger requests the compensation.”

For those who hold a confirmed ticket but are involuntarily bumped from their flight, compensation rules similar to Europe’s EC261/2004 will apply. If the denied boarding causes a delay of up to two hours, airlines must pay the flyer the greater of $775 or 200 percent of the ticket price. For delays beyond two hours, airlines must cut a check for the greater of $1,350 or 400 percent of the ticket price. The rules will apply to all flights with a capacity of more than 30 passengers originating in the U.S., including foreign carriers.

In addition to the new rules on oversold flights, the DOT is also increasing airline liability for any luggage that is delayed damaged, destroyed or otherwise lost while in airline custody. The maximum payout will increase by $300, to $3,800.

Rule Changes Among the Final Acts of Former Transportation Secretary

The rule change was one of the final acts of former Transportation Secretary Elaine Chao, and is a direct response to the incident involving Dr. David Dao, who was removed from United Airlines Flight 3411 by force when it was overbooked in 2017. The new regulations are designed to prevent another violent encounter and protect consumers rights after boarding.

View Comments (7)

7 Comments

  1. polinka

    January 29, 2021 at 7:51 am

    “RULES PREVENT AIRLINES FROM REMOVING FLYERS” That’s a bit misleading. They still can, of course. There’s just a penalty for it. On the increased luggage comp. I think it’s generally a good thing but $3,800 is too much. That creates an incentive to lie (and no doubt pax will) so puts an undue burden on the airlines to police the luggage. It will also make it impossible to pick up your luggage from the carousel and walk away without being checked as you can do now at many domestic airports, thus adding hassle and time to pax and cost to tickets.

  2. GoProf

    January 29, 2021 at 7:58 am

    I am glad to see that we have caught up with European laws.

  3. Counsellor

    January 29, 2021 at 9:53 am

    “The rule change was one of the final acts of former Transportation Secretary Elaine Chao, and is a direct response to the incident involving Dr. David Dao, who was removed from United Airlines Flight 3411 by force when it was overbooked in 2017. ”

    It took FOUR YEARS for DoT to react? Good Lord! Can’t they find *any* competent bureaucrats in Washington? Oh well, better late than never.

    Now, if they’ll do something about compensating delays not involving actual denied boarding, things may start to improve.

  4. Gizzabreak

    January 29, 2021 at 11:36 am

    I ‘see’ the bit about increased and proactive compensation … then what?

    Does payment absolve the relevant airline of any further liability to move the passenger to the ticketed destination within a specified timeframe … as in ‘go take the bus’?

    Or does the original (but now delayed) contract remain in place? As, perhaps, implied by use of the word ‘delay/delayed’?

  5. closecover

    January 31, 2021 at 6:48 pm

    See what happens when we have an adult in the Whole House?

  6. ChuckieB

    February 3, 2021 at 6:56 am

    @Polinka, I’m not so sure that an extra $300 (~9%) is going to move the needle much on false claims, nor do I think it’s a big deal in the grand scheme of things. Most folks are honest, thieves are gonna thieve regardless.

    Beyond the rule preventing removal of already boarded passengers, the biggest thing I see here is the benefit to non-frequent flyers that arises from airlines being required to proactively offer cash compensation. Those of us who know, already know to go the desk and offer to take the bump if our schedule allows, and I’ve never seen an oversold flight where the airline didn’t proactively offer compensation as they’re building their bump list.

    But, I can see how at smaller airports, with a regional jet and a bunch of non frequent flyers, where the airlines could get away with bumping folks and giving them a $10 coupon to the restaurant down the concourse, if there even is one.

  7. polinka

    February 3, 2021 at 8:56 am

    ChuckieB, my bad. You’re right. I honestly didn’t know it was $3,200 already. Read that as $300 going to $3800!

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