Bumped passengers due more cash from airlines

Airlines were ordered Wednesday to pay passengers as much as $800 when they are involuntarily bumped from flights starting next month, the latest sign of a get-tough attitude in Washington toward the nation’s air carriers.

A new rule doubling the maximum compensation for bumped passengers was part of a package of measures announced by the Transportation Department to strengthen consumer protections and ease flight delays.

Although in the works for months, the rule is going into effect as U.S. airlines are caught in a storm of bad news concerning aircraft safety, airplane maintenance, flight cancellations and poor treatment of passengers.

Congressional hearings have probed shortcomings in the Federal Aviation Administration’s safety oversight procedures. The hearings followed revelations of problems with inspections of Southwest Airlines jets.

A subsequent FAA audit of all major U.S. carriers resulted in American Airlines’ canceling thousands of flights last week, which in turn led to renewed calls for increased legal protections for passengers.

Today, hearings scheduled on Capitol Hill will look into FAA safety issues and the proposed merger of Delta Air Lines and Northwest Airlines.

The airline industry blames the government for many of the problems facing the nation’s air travel system.

“The administration is looking for any way it can to mask its failures,” said Roger Cohen, president of the Regional Airline Assn., which represents commuter airlines. Doubling the bumped passenger compensation “is simply an arbitrary way to try to indicate that they’re doing something.”

Scott Hamilton, an aviation consultant in Issaquah, Wash., questioned the motives and effectiveness of government actions, saying the results may not always be what they seem or what was intended.

The grounding of American’s MD-80 jets for what many considered a minor maintenance problem was “ludicrous,” he said. Evidence that the government really isn’t getting tough on the industry will come, he predicted, when the Transportation Department “rubber-stamps” the Northwest-Delta deal -- a combination that some say could be bad for consumers.

The amount of money paid to passengers under the new bumping rule will be determined by the price of the ticket and the length of the delay. It will apply only to travelers who are involuntarily bumped -- not those who willingly take offers of cash and vouchers to give up their seats.

The payments will not apply in the case of cancellations, such as the thousands of scrapped flights that hit American last week.

The old rule, in effect since 1978, applied only to planes seating at least 60 people. It now applies to planes with 30 seats or more.

Regional airlines fly a large number of planes with fewer than 60 seats and often have higher bumping rates than the big carriers.

Passengers who are involuntarily bumped will receive up to $400 if they reach their destination within two hours of their original arrival time (four hours for international destinations). If the delay is longer, the maximum increases to $800. Both amounts are twice the previous limits.

The specific amount of compensation will be calculated by doubling a traveler’s one-way fare, up to the maximums.

For example, a passenger with a $300 ticket who is bumped from a domestic flight and delayed for more than two hours would receive $600.

The payment will be in addition to the value of the ticket, which the flier can use for alternate transportation or have refunded if not used.

“It’s hard to compensate for a missed family occasion or business opportunity, but this rule will ensure fliers are more fairly reimbursed for their inconvenience,” Transportation Secretary Mary E. Peters said in a statement.

Denied boardings have been on the rise in recent years as airlines have cut capacity even as demand has increased. That makes it harder for carriers to find enough passengers who will voluntarily step off an overbooked flight, even when they are offered vouchers worth hundreds of dollars.

Last year, almost 64,000 travelers were involuntarily bumped by the 18 largest U.S. carriers. That equaled a rate of 1.12 per 10,000 boardings -- the third straight annual increase and the highest rate in the last 10 years.

Among the mainline carriers, Delta had the highest rate of 2.47 per 10,000.

Airlines routinely overbook flights to ensure that as many seats as possible are filled, even if some travelers cancel at the last minute. The carriers use computers to project which flights will have a high number of no-shows, and book seats accordingly.

Routes with a high percentage of business travelers and high flight frequency are more likely to be overbooked.

While waiting at Los Angeles International Airport on Wednesday for a Southwest flight home to Kansas City, Mo., Ted Lischer, 41, the president of a software company, said the higher compensation was overdue.

“It’s about time -- if it’s weather or a mechanical issue, it makes sense to inconvenience people, but if the airlines are just overbooked, not so much,” he said.

Lischer, who flies weekly for business, said he was bumped at least twice last year.

Analysts said the new rule could force airlines to be more judicious in booking flights.

“This is a good thing for passengers,” said Rick Seaney, chief executive of Farecompare.com, an airfare website. “The airline mergers and the inevitable cuts in capacity that are going to be occurring certainly give the airlines an incentive to overbook, and this will slow them down.”

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martin.zimmerman@latimes.com

Staff writer Tiffany Hsu contributed to this report.

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Doing the bump

Most air travelers know that airlines sometimes overbook flights and offer passengers money and tickets to voluntarily catch a later flight. But when carriers must deny passenger boardings involuntarily, federal rules and penalties apply.

How often are passengers bumped from overbooked flights?

Last year, an estimated 622,000 passengers voluntarily gave up their seats on overbooked flights, while nearly 64,000 were involuntarily bumped.

How much do airlines have to pay bumped passengers?

Under new rules, passengers who are involuntarily bumped will receive up to $400 if they reach their destination within two hours of their original arrival time (four hours for international destinations). If the delay is longer the maximum compensation increases to $800.

How is it calculated?

By doubling a traveler’s one-way fare, up to the maximum amounts. For example, a passenger with a $300 ticket who is bumped from a domestic flight and delayed for more than two hours would receive $600.

The payment is in addition to the value of the passenger’s ticket, which the flier can use for alternate transportation or have refunded if not used.

Is compensation required for canceled flights?

No.