A few days ago, four domestic airlines (Alaska Airlines, American Airlines, Southwest Airlines, and United Airlines) were all fined for giving inaccurate compensation information to customers for being involuntarily bumped from overbooked flights.
Overbooking flights is a common practice for the airlines, especially between city pairs with multiple flights per day. Often, flights with high no show rates are overbooked to make sure there are not a ton of empty seats flying. Flights can also be overbooked due to operational plane changes. On a recent flight, United switched versions of their 737-900 resulting in fewer available seats on the flight. Up to 15 customers would have to be bumped! Keep in mind, if are not in the checkin area when you’re name is called to be bumped, you are considered a no-show and are not entitle to compensation. If you are in the gate area and are bumped from your flight, you are entitled to some serious dollars.
If you are bumped from a domestic flight, the airline must rebook you on another flight and the delay determines the amount of compensation you are entitled to.
If your new flight arrives between 1-2 hours after your scheduled arrival, the airline is required to pay you up to 200% of the cost of the original airfare, capped at $675! If the new flight arrives 2 hours or more after your scheduled arrival, the airline owes you up to 400% of the original airfare, capped at $1,350!
Also, the original airline must put you on a reasonable flight with any other carrier. If this happens, make sure to include your frequent flyer number from the new carrier AND request the original routing credit from the original airline. This is a handy way to potentially receive double miles for the same flight!
IMPORTANT: Anyone that volunteers to be bumped is NOT entitled to the above compensation rate. Almost always the carrier will request volunteers to be bumped and offer lower compensation to save some money. If you volunteer, often the airline will give up your seat and end up giving you a seat if someone does not show up. Volunteering can be a great way to earn some extra money while traveling, but carries the risk of loosing your original seat and receiving much less compensation than is owed to someone who is involuntarily bumped.
Personally, because majority of my travel is for business and I can work from almost anywhere, I love volunteering to give up my seat. Sadly, almost 50% of the times I have volunteered, I have ended up with a worse seat and no voucher.
