I took a $500 credit to fly later after my flight was oversold — my wife's furious I didn’t ask for more. Did I mess up?
In the United States, overbooking or overselling airline seats is standard practice to maximize profits. The Code of Federal Regulations establishes some ground rules surrounding overselling, but it's perfectly legal when done right.
In fact, in some cases, customers actually benefit when an airline overbooks because it gives them a chance to earn free travel by giving up their seat in exchange for compensation.
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But how much compensation is enough? Let's say Neil was waiting at the airport when he heard the airline asking for volunteers willing to give up their seat. Neil didn't need to get home right away, so when the airline offered a $500 credit to wait for another flight, it seemed like a no-brainer to jump at the chance.
Unfortunately, Neil's wife Angie wasn't so excited about Neil's deal. In fact, she was furious because she thought he should have held out for more. But is she right?
Federal law says involuntary bumping is a last resort
In determining if Neil's deal was good or not, it helps to understand why airlines pay volunteers to give up a seat.
According to Federal Code, when a flight is oversold, "every carrier shall request volunteers for denied boarding before using any other boarding priority." This means an airline must ask flyers if they're willing to accept compensation for giving up their reservation.
In fact, the airline must "proactively offer to pay compensation" to any passenger who voluntarily gives up their seat or is involuntarily denied boarding rather than waiting for them to ask for compensation.
The airline is also obligated to tell the volunteer if they were in danger of being involuntarily bumped and, if so, what compensation the airline would have had to pay in that situation. Finally, airlines must disclose any restrictions on the rewards they offer in exchange for someone volunteering to give up their seat.
Air carriers must also have a policy to decide who will be involuntarily denied boarding on oversold flights. Typically, they consider things like time of check-in, the fare paid, whether the passenger has an assigned seat, and their frequent flyer status.
