Good News. My parents just got the boarding passes for the flight out of DEL to VIE and hopefully to JFK.

Thanks to everyone who responded. There was absolutely nothing available out of DEL except via Japan. However a bit of posturing, pleading and persistence at the city office worked. My parents were put on the top of the waiting list and got their seats tonite.

According the airline, the seats were confirmed on the 23rd but somehow the agent 'unbooked' them on the 27th. They had no answer how their phone agent told my parents that flight was confirmed on the 28th. I guess it was a simple case of overbooking. But with no flights available on any airline, they tried to wiggle out by putting up the charade of no-confirmed booking.

I am still curious to know what my legal options would have been. I guess it was not obvious in my original post, but my parents live in New Delhi and tickets were purchased in India. This was the outbound flight. In this case, when the ticket was bought outside the US, but the final desination is the US, do the rules related to bumping ($300 min comp plus hotel plus next available flights) apply? Or are travellers flying into the US at the mercy of local laws? Does the situation change if the ticket was purchased in the US even if the journey starts outside the US?