Delta, United fined by DOT for denied boarding, code share disclosure violations

A Delta Air Lines 777-200 departs on the carrier's inaugural service from Australia to the United States. Delta faces a fine by the DOT for failing to comply with regulations regarding passengers involuntarily denied boarding on oversold flights. (AP Photo/Delta Air Lines, James Morgan)

The United States Department of Transportation has issued fines to both United Airlines and Delta Air Lines, for Code of Federal Regulations (CFR) violations concerning code share disclosure and denied boarding compensation, respectively. Both orders issued by the DOT require a cash fine that is partially waived or reduced if the carrier makes corrective action to the complaint within a set timeframe.

In the case of Delta Air Lines, the DOT was alerted by the Aviation Consumer Protection Division, which compiles and publishes the DOT Air Travel Consumer Report, of an increase in the number of consumer complaints filed against Delta regarding denied boarding compensation. The DOT allows airlines to oversell flights to maximize productivity and profitability, under the guise of benefitting the consumer by allowing the airline to offer lower fares as a result of efficiency increase. In exchange for allowing airlines to sell more seats than they are able to accommodate passengers on a given flight, the DOT prescribes very specific protections for passengers in the event of an oversale.

Airlines are required to solicit volunteers, and if not enough passengers volunteer their seats on a flight, the airline must involuntarily deny boarding. Passengers involuntarily denied boarding who are otherwise in compliance with the airlines contract of carriage regarding minimum ticket purchase, check-in, and presentation at gate cutoff times are eligible for denied boarding compensation which includes rebooking on the same or another carrier. If the alternate transportation is scheduled to arrive within within one hour of the original booked flight, no additional compensation is required. If the carrier offers alternate transportation (at no additional cost) that arrives within two hours of the original booked flight, the passenger is entitled to be paid cash or check, at the point of embarkation on the same day, the full value of their fare including tax up to $400, in addition to the alternate transportation. If the carrier cannot provide alternate transportation, or the transportation arrives more than two hours later than originally scheduled, the carrier must pay the passenger twice the value of the fare paid, up to $800. The carrier is allowed to offer free or reduced rate transportation in lieu of cash, but must still offer cash payment.
The DOT found that Delta failed to solicit volunteers, provide a written explanation of the rights and limitations of Involuntary Denied Boarding Compensation, or to make passengers aware of their right to receive a cash payment when offering compensation in the form of travel vouchers. Delta is fined $175,000 in cash, and must exhibit expenditure of $200,000 on corrective action in response to the findings.

In United’s case, the DOT found violations of the section of the CFR that requires airlines to disclose which flights are operated by another airline in a code share agreement. United has numerous code share agreements with both United Express partner carriers, Star Alliance partners, and other various airlines providing service with a United flight number. The DOT requires this disclosure in the interest of product transparency, allowing passengers to make informed purchases. Passengers may wish to avoid certain carriers for various reasons, and it must be disclosed if the purchase of their United flight involves a flight on one of these carriers owing to concerns over in flight service or reputation for safety. Failure to disclose the operating carrier is considered to be unfair and deceptive trade practices and unfair method of competition.

The DOT reached a decision following a series of test calls to United Reservations. The DOT asserts United agents failed to disclose code share carriers in a “substantial” number of those calls. The DOT has levied a fine of $80,000 against United - $40,000 payable immediately, and another $40,000 payable if United is found to have committed the same violation within a year from the issuance of the order.