New Era: American Gives Out $250,000 Denied Boarding Compensation on a Single Flight?

In the aftermath of the David Dao dragging incident in April, several airlines revamped their policies around paying denied boarding compensation. In September Delta paid out $4000 in travel credit to a woman flying to South Bend, Indiana for a Georgia Bulldogs – Notre Dame game. She still made it in the night before the game.

On December 19th American Airlines flight AA150 from Chicago O’Hare to Paris went mechanical just prior to boarding. Instead of cancelling or delaying the flight to the next day, they swapped out the planned Boeing 787-9 with 285 seats for a Boeing 787-8 which has just 226 seats.

With 59 fewer seats on the aircraft they were paying out voluntary denied boarding compensation.

The plane went from 30 business class seats down to 28. It went from 21 premium economy seats to an aircraft without premium economy. It gained 19 Main Cabin Extra seats, and lost 55 in regular economy.


American Airlines Boeing 787-9 Economy

In the old days they might offer travel credit up to $800 looking for volunteers, and anyone they had to bump could be paid out as an involuntary denied boarding. In fact the DOT’s $1350 required involuntary denied boarding compensation (in the form of a check) wouldn’t even apply because the airline substituted a smaller plane on the flight. Government rules don’t require compensation in that circumstance (or when the airline simply cancels the flight).

Shortly after the David Dao incident American adopted a rule that they “will not involuntarily remove a revenue passenger who has already boarded in order to give a seat to another passenger.” They also began allowing customers to list as a volunteer to give up a seat even without already having a seat assignment as long as they were confirmed on the flight.

American’s Day of Departure Desk will also authorize substantially more compensation than before. And that appears to have happened in this instance.


American Airlines Boeing 787-8

I’ve been told that customers received $5000 in travel vouchers plus a hotel night and a seat on another flight. Indeed I’ve also been told that there was a family of six which walked away with $30,000 in vouchers. And that more than 50 passengers received compensation. 50 passengers receiving $5000 each would be $250,000 in travel credit issued for a single flight.

I asked American to confirm the amounts and spokesman Ross Feinstein declined “to get into specific voluntary compensation numbers” however he didn’t waive me off the numbers either.

He shared that no passengers were involuntarily denied boarding and that passengers receiving voluntary denied boardings either took a connecting flight later the same night or the same flight the next day. And he adds,

Our team – both in Chicago and Fort Worth – did a wonderful job of taking care of our customers during a difficult and last minute downgrade situation.

Regardless of the exact amounts, if $5000 for instance was limited to premium economy and business customers, I didn’t see any complaints about how this flight was handled. At all. And the flight was only delayed in arrival an hour and 13 minutes.

I haven’t heard what happened to passengers on the return Paris – Chicago flight, if it became oversold due to the smaller 787-8 aircraft that was sent over or not. However it was certainly better that American sent the smaller plane than no plane at all, cancelling Chicago to Paris would have meant cancelling a Paris departure as well.

(HT: J.)

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. I call BS on AA. First, these are travel vouchers, not cash. So AA did not pay out anywhere near $250K (And I wonder if they can deduct the full amount as an expense, which is shady.)

    Second, in most cases the vouchers can only be used once. If that is the case, how many people are going to find use for a $5k voucher?

  2. Geeze. While at first that sounds appealing, I spend less than $1k a year in actual cash on airfare. If that credit expires in a year, it’s not that compelling. I’d think differently if the “change” restarted the expiration clock… that would be a payday.

  3. @Dan
    each time the voucher is reissued, it gets another 12 months life.
    You can roll your voucher literally into eternity .

  4. I agree they weren’t legally required to provide anything (other than rebooking and hotel, of course).

    And the Dao Policy doesn’t even apply (unless they were stupid enough to let 280 people board a 230 seater).

    And the seat assignment vs confirmed issue is a red herring. Both are confirmed (not standby) and that’s all that matters for comp.

    Vouchers are typically accounted for at 25% cash value.

    All in all, an expensive downgauge but probably cheaper than being “dragged” by the court of public opinion. I would think the potential return oversale was resolved by rebooking via other connections.

  5. This seems like a case of the pendulum swinging too far in one direction. Don’t expect it to last.

  6. I have to admit, I am a little disappointed (though not surprised) that there is little to no praise in the comments section to AA for this. They did the right thing here and even if those travel vouchers literally cost them nothing (which I am sure they didn’t), they went well above and beyond anything that was expected or required here.
    Maybe it won’t last, but that’s no reason not to say “Nice work AA!” when they do something right. I for one am pleased to see them doing the right thing.
    On a side note, the other day I had a 4-5 hour delayed departure ORD-PHX.. It sucked, but that’s life. Got an e-mail from AA giving me 5k in miles… nothing huge, not worth the delay, but I didn’t even ask for anything or expect anything. It was proactive and nice. (also it was an awards ticket so the flight was $5).

  7. This is a step in the right direction. That said. I suspect this was a case of real time fare step up so that $400 coach ticket booked 6 months in advance really became a $3000 full fare ticket that they intended that family of six to rebook immediately (prolly biz and sorry EXP’s hoping for an upgrade on whatever the next scheduled flight was). In any event while the numbers seem way inflated, on the surface it sounds like an airline ACTUALLY tried to make thinks right here so good on them.

  8. Are there any industry estimates on the percentage of travel vouchers actually redeemed prior to expiration?

  9. That’s a great example of an airline thinking on its feet. Maybe the return flight had a load that would have easily been covered by the smaller aircraft? whatever the decision, $250k in vouchers to keep everyone happy seems like a reasonable price. Kinda sad that “AA Does the Right Thing for Passengers” is actually a valid news headline.

  10. @andy – if I think on my feet and cost my employer $250k I’d be fired, even if it was the right decision.

  11. I was on flight 150 from ORD-CDG on 12/19 so I can add some additional information as to what happened. Actually, I was on flight #44 JFK-CDG on 12/18 which was ultimately canceled due to a smoke issue, I was then re-booked LGA-ORD-CDG on 12/19. I am EXP until 1/31/18 and was holding a business class seat on flight 150 from ORD-CDG. I arrived at the gate exactly when boarding was supposed to start and they were making an announcement offering a $2000 voucher. I agreed to give up my seat and was told to get in line at the next gate to have my vouchers processed. One of the first people to be processed was a woman and her daughter who got a total of $5100. Very few people were interested in giving up their seats as they had non refundable hotel reservations and tickets to shows. The offer started to increase slightly, $2300, 2500, 2800. When it was my turn they were at $3K. As soon as I was handed the vouchers (3 x $1000) I said to the kid behind me thank you as he had been going back and forth between K13 and K 14 or 15 getting us all updates on how the amount was going up. The kid looked at me and said “its now $3400”. I was torn, but ultimately said something. The AA agent then informed me the offer was bumped up to $4000. The agent called over the manager who instructed the agents to “give them all $4000”. I was also given hotel and food vouchers. A decision was then made to stop re-booking flights, just processing travel, hotel and food vouchers and then later to re-book everyone as a group. There was a family of four behind me who were going to get $16,000, perhaps after I left they got $20,000. I went to the Flagship lounge and was re-booked with BA that night ORD-LHR-CDG.

    That being said, after I use my vouchers I have no intention of flying AA. I emailed AA twice regarding the cancellation of flight #44 the night before and the responses have been downright pathetic and embarrassing. After 20 years of practically exclusively flying AA its time to start spreading my travel dollars to other carriers.

  12. “re-booked with BA that night ORD-LHR-CDG.” on one hand, you got to your destination the same day. on the other, you got stuck flying BA biz … hmm

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