Saturday 23 June 2018

United's new compensation scheme: How much would you pay to give up your seat?

Airline compensation claims

A United Airlines plane
A United Airlines plane

Gavin Haines

United Airlines will allow passengers on overbooked flights to make bids on how much compensation they will accept to give up their seats.

The move comes after one of its passengers, David Dao, was violently removed from an overbooked flight in April.

Dao suffered a broken nose and lost two teeth in the notorious incident, which is now considered one of the worst PR disasters in aviation history.

Dao and the airline have since settled the matter out of court.

To avoid similar scenarios in future, United has announced it is going to trial a new system that will allow passengers to bid on how much compensation they will accept to disembark and wait for another flight.

The airline would then choose the lowest bidder until all passengers are either accommodated or compensated.

“As part of our commitment to further improve our customers' travel experience with us, we plan to test an automated system that will offer customers an opportunity to voluntarily bid for a desired compensation amount in exchange for potentially changing travel plans if faced with an overbooked flight,” United said in a statement.

The scheme, which will be trialled next month on selected flights, is not new to the industry; Delta currently operates a similar compensation programme.

United claims to have made significant improvements to its customer service since the Dao debacle, including “limiting the use of law enforcement to safety and security issues only”.

It also pledged to reduce overbooking, a tactic used by airlines to ensure planes are full even if passengers cancel, which they frequently do.

HORROR in the cabin: Lawyers for Dr David Dao say the 69-year-old grandfather has become ‘a poster child’ for the mistreatment passengers suffer at the hands of the airline industry
HORROR in the cabin: Lawyers for Dr David Dao say the 69-year-old grandfather has become ‘a poster child’ for the mistreatment passengers suffer at the hands of the airline industry

According to the airline, 260 passengers were involuntarily denied seats in May and June of this year, compared to 1,700 in the same two months of 2016.

What are the chances you'll be denied boarding?

Airlines bank on a percentage of passengers not showing up for their flight and double book seats accordingly. Their sums are based on statistics that are analysed by computer models; often they get it right, sometimes they don’t.

It’s legal for airlines to overbook flights and the practice is more common than you might think. In fact, in the US, which provides the best statistics on the subject, the chance of a passenger being denied boarding because of overbooking is 1 in 1,000.

When you consider that a Boeing 777 can carry more than 500 passengers, those odds seem quite low.

According to the US government, 434,000 passengers voluntarily gave up seats on the country's largest 12 airlines last year, including nearly 63,000 on United.

The champion of overbooking was Delta Air Lines – about 130,000 passengers flying with the carrier gave up their seats last year to accommodate for overbooking.

The vast majority of passengers who are “bumped” are willing volunteers, encouraged onto another flight by the prospect of compensation or an upgrade.

"Compensation varies from €250 to €600 depending on the length of the delay and the distance of the flight, although an airline is allowed to negotiate a lower rate with those who volunteer to be bumped,” explained Nick Trend, Telegraph Travel’s consumer expert.

According to the compensation company, AirHelp, there are ways to reduce the likelihood of being “bumped” from a flight.

“Flyers are less likely to get bumped if they are frequent travellers with the airline they are travelling with,” said Marius Fermi, UK country manager. “So signing up for frequent flyer programs is one way to decrease their chances of being bumped from an overbooked flight.”

Flying off-peak will also reduce your chances of being “bumped”.

“Those choosing to fly early in the morning versus later in the evening are less likely to board an overbooked flight,” he said.

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