Saturday, August 23, 2008

Likelihood of Getting Bumped Rises, So Does Compensation

THE NEW YORK TIMES
The bad news: The likelihood that travelers will be bumped from an overbooked flight may grow worse this fall when airlines shrink their fleets to cut unprofitable flights and inefficient planes, meaning even fewer empty seats than there are now.

The good news: Airlines are required to offer richer rewards -- twice the amount of money they used to pay out -- for passengers bumped from a flight. The payoff can be even greater for people who know how to bargain.

In the first six months of the year, about 343,000 passengers were denied seats on planes, according to the U.S. Transportation Department, out of 282 million passengers. Most of those people volunteered to give up their seats in return for some form of compensation, like a voucher for a free flight.

But Transportation Department statistics also show about 1.16 of every 10,000 passengers had their seats taken away outright because of overbooking -- which may sound like a low rate, until your name is called.

Back when most tickets were refundable or easy to change, and the airlines offered multiple daily flights to many cities, carriers used to routinely overbook about 15 percent of their seats. Passengers who missed their plane could simply catch a later flight.

Rules are tighter now, and passengers with nonrefundable tickets can only expect a credit for an unused ticket, often minus a hefty fee, if they change their flight. That means they have more incentive to show up.

But airlines still overbook, regarding bumping as a necessary part of doing business, especially in the face of soaring fuel prices. Overbooking, after all, helps ensure that flights are as full as possible, a priority for the financially troubled carriers.

That strategy can also backfire on the airlines, said Tim Winship, an editor with SmarterTravel.com, a Web site that offers travel advice. The practice is "bad for them, it's bad for morale, and you end up with a potential riot on your hands among people who have to be compensated," he added.

For Delta Air Lines, bumping became a big concern last summer, when 3.3 passengers out of every 10,000 travelers were bumped, more than double the industry average. So Delta started using new technology to better track differences in no-show patterns based on time, day and season.

"We now have a much better view of how many passengers we expect to show up" for the same flight on a Tuesday versus a Friday, said Betsy E. Talton, a Delta spokeswoman. The methods have helped Delta cut its involuntary bumpings in half, putting it more in line with the industry average.

Meanwhile, Continental Airlines said it was introducing a new feature on its Web site and at airport kiosks that lets travelers automatically check in within 24 hours of their return flight. The step is meant to save travelers the trouble of going online to check in the day before their return flight. It can also help protect them against getting bumped, since Continental will know that they plan to make the flight.

The higher cost of payouts, which the Transportation Department doubled this spring after last summer's travel chaos, gives the airlines extra incentive to refine their overbooking models.

Travelers can now receive up to $400 if they are involuntarily bumped and rebooked on another flight within two hours after their original domestic flight time and within four hours for international. They are eligible for up to $800 in cash if they are not rerouted by then. The final amount depends on the length of the flight and the price paid for the ticket.

Compensation must be paid immediately in cash, or with a voucher if the passenger accepts it, and the airline must offer a choice of a refund, a return flight to their departure city or an alternative flight. Volunteers also receive compensation, which they negotiate with the airline.

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