Know your rights: DOT fines Spirit for under-compensating passengers who were denied boarding

Jun 22, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Airlines have two options for how to accommodate passengers when they oversell flights. The first and more desirable outcome is to find volunteers who are willing to take a later flight in exchange for compensation, usually in the form of travel vouchers, cash or miles. If the airline can’t find a volunteer they’ll be forced to “bump” someone, which in industry parlance is known as an “IDB” or “involuntary denial of boarding.”

The Department of Transportation clearly defines the rights of passengers who are involuntarily denied boarding, but that doesn’t mean they’re always adhered to. This week, the DOT fined Spirit Airlines $350,000 for violating the rights of some passengers who were involuntarily bumped between 2017 and 2018 as well as for not accurately reporting the number of passengers who were involuntarily denied boarding during that same times period.

Specifically, the DOT alleges that Spirit:

Sign up for the free daily TPG newsletter for more airline news

  • Required passengers who were involuntarily bumped to sign waivers suggesting that they had volunteered.
  • Offered travel vouchers to passengers who were involuntarily denied boarding, without first informing them that under federal law they had the right to receive compensation in the form of cash or a check.
  • Under-compensated certain passengers relative to federal requirements.
  • From 2017 to 2018, mis-categorized over 1,000 passengers as “volunteers” when in reality they’d been involuntarily bumped.

The $350,000 fine is broken up into three parts. That includes an immediate payment of $155,000 and a credit of $110,000 for costs incurred rebooking passengers on other airlines related to equipment changes. There’s also an $85,000 snapback penalty if Spirit violates the rules again.

Normally a $155,000 fine would be a relatively minor expense for an airline, but Spirit is sure to feel this much more now given the difficult financial situation that nearly all airlines around the globe find themselves in.

It’s also worth noting Spirit has made a number of improvements since the violations that triggered this fine occurred several years ago. During all of 2019, Spirit involuntarily denied boarding to just 380 passengers, a rate of .12 per 10,000. This is a huge improvement from the year before, when during 2018 Spirit involuntarily denied boarding to .56 out of every 10,000 passengers. This puts Spirit ahead of major carriers like American Airlines and many regional carriers when it comes to involuntary denials of boarding.

What are your rights if you’re denied boarding?

First of all, it’s very important to understand the difference between a voluntary bump and an involuntary denial of boarding. You can volunteer to give up your seat on a flight for any amount of compensation the airline is willing to offer. While airlines will usually start the bidding at just a few hundred dollars, they may go up to several thousand dollars in order to find a volunteer and avoid bumping someone against their will.

I personally had luck getting bumped off the exact same American Airlines flight from Fort Lauderdale (FLL) to Chicago (ORD) on January 2 three years in a row when I was coming back to college after spending winter break with my girlfriend. Each year I happily volunteered my seat in exchange for a $500 AA travel voucher which I used to fly to Australia, India and Paris.

If you’re denied boarding, you shouldn’t sign any waiver saying you volunteered. Airlines want to keep their involuntary bump numbers as low as possible and may be willing to offer you a massive voucher in order to say you volunteered, even if you didn’t initially. That’s how one United Airlines passenger ended up walking away with a $10,000 travel voucher after she was bumped from a flight in 2018.

The DOT has very clear guidelines on how much compensation passengers are owed when they’re involuntarily denied boarding, based on the length of their delay and whether they were flying domestically or internationally. Airlines are required to offer you compensation at the airport, or if you’re rebooked on a flight before the airline can compensate you, within 24 hours of your denial of boarding.

Photo courtesy of the U.S. Department of Transportation
Photo courtesy of the U.S. Department of Transportation

While most cases of involuntary denials of boarding require some form of compensation, the DOT also spells out a few examples where airlines do not owe any compensation:

  • Aircraft change. If an airline downgrades your flight from a 777 to a 787 with fewer seats, they don’t owe you compensation for bumping you off the flight.
  • Weight and balance. Denied boarding due to weight or balance restrictions that apply to planes with 60 or fewer seats for operational or safety reasons doesn’t trigger compensation.
  • Downgrading. If you’re downgraded to a lower class of service, like from business class to economy, you’re entitled to a refund in the difference of the fare price but not additional compensation.
  • Charter flights, or flights that are not part of an airline’s regularly scheduled operations, are not covered.
  • Small aircraft. Flights operated by jets holding fewer than 30 passengers are not covered.
  • Flights departing from a foreign location. The DOT regulations only apply to flights originating in the U.S, though many airlines may voluntarily provide compensation if you’re denied boarding on a flight from a foreign country to the U.S. Many countries also have similar passenger rights, such as EU 261 for flights departing Europe.

Bottom line

The Department of Transportation strongly dis-incentivizes airlines from involuntarily denying boarding to passengers. Not only are the compensation requirements stricter for involuntary bumps, but those numbers get reported to the public and can adversely affect an airline’s reputation. Spirit’s fine is an important enforcement of passenger rights, though it’s clear that the airline has already taken steps to reevaluate its procedures and training surrounding involuntary denials of boarding. Still, the DOT move — coupled with its recent actions regarding refunds during the COVID crisis — may serve as a reminder to airlines that the agency will intervene when needed to enforce passenger protections.

Editor’s note: This post has been updated with additional context about the DOT fine and Spirit’s performance. This post was originally published on June 21, 2020. 

Featured image by Alex Tai/SOPA Images/LightRocket via Getty Images

Chase Sapphire Preferred® Card

WELCOME OFFER: 80,000 Points

TPG'S BONUS VALUATION*: $1,650

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
  • Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
  • Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.
Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.