American Airlines Fined $20K For Failing To Adequately Compensate Bumped Passengers

If you get bumped from a flight because the airline overbooked the plane, you usually get some sort of compensation — money or vouchers for future flights — in exchange for having to change your travel plans. But federal regulators say American Airlines screwed up when it bumped nearly a dozen passengers from a Miami-to-London flight and failed to tell them why or offer them anything for their troubles.

The U.S. Department of Transportation handed down the $20,000 civil penalty after an investigation found the carrier failed to adequately pay the 11 passengers who were denied boarding.

According to the DOT’s consent order [PDF], the group of passengers were set to travel from Orlando to Miami and then on to London. They received their boarding passes for the full trip at the Orlando airport, but when they tried to board their connecting flight in Miami, American staffers pulled them aside to tell them they were being bumped and would have to rebook their travel for the following day.

“American staff at Miami airport did not offer any meaningful explanation as to what happened to these 11 passengers’ reservations, nor did they offer them any type of compensation,” according to the order.

The airline did not initially offer any compensation for the passenger who went on to file a complaint with the DOT.

When American received the DOT complaint, the carrier responded to the passengers, acknowledging that the group’s tickets were indeed valid and confirmed, and therefore entitled to Denied Boarding Compensation (DBC).

“American’s response further stated that based on the price of the tickets and the length of delay, each adult passenger in [the group] was entitled to either a check for $168 or a transportation voucher for $209, and each child passenger was entitled to a check for $125 or a transportation voucher for $156,” the order states.

When questioned by the DOT, the airline claimed the figures were determined by the roundtrip fare minus taxes and fees and reduced by half because the denied boarding occurred on their return flight.

Following additional questions on its equation and conversion methods, American increased the compensation amount to $848 per person.

“We consider this violation to be egregious as it affected 11 passengers, American failed to offer any DBC at all until receiving the complaint from the Enforcement Office, and only offered the correct amount of DBC after repeated inquiries from the Enforcement Office,” the DOT says in its order.

In addition to finding the carrier incorrectly provided compensation for denied passengers, the DOT’s investigation found the company had a “problematic internal policy” regarding how it reported passengers who couldn’t board a flight because it was oversold.

Under the airline’s policy, which took effect in 2008, gate agents were directed to classify a passenger who was denied boarding as a volunteer even if the passenger had not been allowed to board the flight as long as the passenger initiated a conversation to receive compensation after the flight had left.

American identified an insignificant number of instances in which this policy was used. As a result, the DOT agreed the airline would not face additional penalties if it ceased the practice.

“The Enforcement Office believes that this compromise assessment is appropriate in view of the nature and extent of the violations in question, serves the public interest, and provides a strong incentive to American and all other airlines to comply with the Department’s oversales regulation,” the agency says.

[via Dallas Morning News]