Under the EU rules, the compensation for involuntary downgrade is a fixed portion of total ticket price, depending on the distance covered.

Does it mean that it is irrelevant for the airline where the passenger is downgraded into?

If First Class is overbooked then a paying First Class passenger involuntarily downgraded to lie-flat Business seat gets exactly the same compensation as a paying First Class passenger involuntarily downgraded to coach, middle seat next to toilets... correct?

And downgrading the First Class passenger to Business Class may mean that a paying Business Class passenger has to be involuntarily downgraded and get as compensation a portion of Business Class ticket price over and above what has to be paid to the First Class passenger.

So, what does a paid First Class ticket actually give in case of overbooking or disruptions?

About 75% !!

Downgrade compensation under Regulation EC 261/2004 is calculated as a percentage of the original ticket price. In addition to that compensation, the PAX is also entitled to an invol. refund of the fare difference.

Wait, wait...

If the passenger is bumped, and not allowed to fly at all, then the airline owes:
full original ticket price
plus a fixed sum for compensation.

Right?

Now, if the passenger is reaccommodated in a lower class of service, the airline owes:
the difference between the full original ticket price and the fare for the class of reaccommodation
plus a fixed percentage of the original ticket price.

Again right?

Then suppose that you are bumped from an intercontinental F class because your airline does not have enough seats in F, or has to substitute a plane with no F class at all.

If the airline does not reaccommodate you at all, they owe full refund + a fixed and therefore capped number of euros. If they get a reaccommodation in coach, what they owe would be full refund minus the coach fare plus another 75 % of the original first class fare.

75 % of an intercontinental first class fare may well be more that the fixed compensation which is the same for all bumped passengers. It can also be more than the fixed compensation plus the fare for the intercontinental coach reaccommodation. Therefore, the airline would lose money by reaccommodating first class passengers rather than bumping them altogether...

Another complicated case: I used my OK miles to book an award with AF. On that award trip I was downgraded. So what would apply for a downgrade on a ticket with carrier B issued by carrier A with miles?

I am still waiting for an answer on that one. Though the ticket was OK issued I wrote AF and though they'd forward it if they didn't want to handle it. That was two months ago and haven't heard anything yet..

In theory, yes ...

The issuing airline (OK) owes you an invol. refund, as per their Tariffs. The operating carrier (AF) owes you the downgrade compensation under Regulation EC 261/2004.

If you and AF are unable to agree on the interpretation of the EC Regulation, you could then take your case to the European Court of Justice in Luxembourg ...

There is no reason you will be denied boarding, if so, on a basis that you are inelgible for the flight, too drunk, too stoned etc... then I do not think you are entitled any compensation.

The rules state that if you get downgraded you will recieve 75% of ticket plus usually compensation - not always.

If they deny you boarding you are entitled compensation plus the offer of another flight (plus possible downgrade refund if placed in a different class). They will not usually give you full refund, unless you agree to surrender your rights to use your ticket.

Are you talking paid fare classes or mileage upgrades?

I assumed for reasons related to airline (the flight had too many tickets sold, or a flight had to be cancelled due to breakdowns or weather and passengers reaccommodated, or the flight had too few tickets sold and the airline wants to save fuel by not flying at all and compensating the passengers...)
Does it mean that passengers with valid tickets are entitled to flight - the airline cannot just give full refund plus compensation and not fly the passenger at all, even if they want to?

Don't forget, you have to check-in AND be at the gate in excess of the times reccommended by the airline to qualify for the compensation.

These times are often rediculous (Intercontinental 3hrs, some budget carriers 2hrs) And gate times too (30min for some 20min for others) - though how a gate time could be accuratly measured unless there is an early boarding, i don't know.

I was worried once at LBA because the check-in staff were taking an age to process people and I had still not checked the bags 15min before the advertised boarding time.

Apparantly, the compensation regulations do not protect you from queues at check-in or security.

Wait. Does it mean that an airline who expect difficulties with any plane due to depart can just order their check-in desks closed, so that by definition no one is at the gate at the due time and therefore no one is entitled to any compensation or refund?

They cannot offload (void your ticket) without your agreement - they have to abide to the contract of carry and supply you with the flight.

Compensation downgrade is related to class of travel, denied boarding is a set fee depending on the flight's length.

Wait... so if the airline does not want to fly next flight on the route, and actually does not want to fly there ever again, but some passengers hold valid tickets for future flights, the airline is obliged to keep flying until all passengers with tickets already sold have been transported?

No, absolutely not.

Airlines can and do cancel routes. BA Connect just cancelled 900 (nine hundred) flights.

Although they will initially ask for volunteers to be bumped off flights, if there aren't enough seats then they can and do refuse to carry passengers and there is nothing the passenger can do to force them. If there is no seat for the pax then the pax can't travel. End of story.

You will of course be entitled to a refund, rebooking and maybe some compensation.