5 ms·

Ironically, it's regulations that brought us this mess. Specifically that an airline is allowed to cap bump compensations at $1300. Without that cap, there woul

by Darthy 9y ago

Ironically, it's regulations that brought us this mess. Specifically that an airline is allowed to cap bump compensations at $1300. Without that cap, there would have been takers and no need for violence. Really free markets would have solved this.

joelrunyon 9y ago
I don't think that's a gov't regulation. That's likely an internal United standard. Delta just raised their minimum to $10k-ish if you read the article...
- cmdrfred 9y ago
  Actually it is, if someone is bumped from a flight the most they can legally ask for (anyone is free to give anyone money if they wish) is $1400 (I believe) or 4X the value of the ticket whatever is less. Delta offered this maximum, and was declined by all passengers. Then Delta called government law enforcement offers to enforce existing regulation and remove the passenger. Without this regulation there would have been no maximum for damages in violation of their contract, thus the passenger could of sued for a potentially unlimited amount. Thus Delta might of been inclined to offer more as their losses would possibly be higher than the maximum in the regulation. Having a maximum, and having government law enforcement enforce said maximum certainly contributed to this issue. Now due to the losses in stock price Delta has reevaluated it's risk/reward on terms of bumping passengers and decided its more cost effective to offer more. This is a perfect example of how the free market can correct these sort of things without the government getting involved at all.
  - joelrunyon 9y ago
    1. This was United, not Delta. The Delta mention in my comment was their response to an industry incident 2. No one ASKED for any money. United was trying to get people to voluntarily bump by offering X - no one accepted (because the next flight didn't leave for a day). United should have realized that if they really wanted to get their employees on the flight & not have an international incident, they could go a bit higher... 3. Here's the rule: > If the substitute transportation is scheduled to get you to your destination more than two hours later (four hours internationally), or if the airline does not make any substitute travel arrangements for you, the compensation doubles (400% of your one-way fare, $1350 maximum). All of this is out the window anyways with the Dao case since it wasn't even an overbooked flight - one with too many ticketed passengers - but one where they were trying to get employees to another airport (which they could have easily booked on another airline due to internal agreements).
    - cmdrfred 9y ago
      >1. This was United, not Delta. The Delta mention in my comment was their response to an industry incident My mistake. 2. No one ASKED for any money. United was trying to get people to voluntarily bump by offering X - no one accepted (because the next flight didn't leave for a day). United should have realized that if they really wanted to get their employees on the flight & not have an international incident, they could go a bit higher... Yes, but they don't have to offer any more. The truth is you don't get to choose if you are bumped from a flight they can simply bump you and the most you can sue for is the rate specified. Without a specified rate you can argue in court that "missing the flight cost me a multi-million dollar deal" or "I missed my grandfathers final moments" and potentially get awarded many thousands or millions of dollars. That risk likely would have resulted in a very different outcome. (probably the end of overbooked flights and increases in airline fares/stricter restrictions on missing flights to compensate) >All of this is out the window anyways with the Dao case since it wasn't even an overbooked flight - one with too many ticketed passengers - but one where they were trying to get employees to another airport That's something for his lawyers to look into of course, I have a feeling the 300K a year guys they keep on retainer who likely approved this policy have a good idea of how they can argue this was legal under current regulation. That or the legal department at United will have some openings soon.
      - tiatia 9y ago
        "That's something for his lawyers to look into of course, I have a feeling the 300K a year guys they keep on retainer who likely approved this policy have a good idea of how they can argue this was legal under current regulation." They can argue. But will the judge or jury agree? Regarding the boarding, this was posted by a lawyer and makes it look a little bit like a clusterfuck. Could get quite pricey for United. 1. First of all, it’s airline spin to call this an overbooking. The statutory provision granting them the ability to deny boarding is about “OVERSELLING”, which is specifically defined as booking more reserved confirmed seats than there are available. This is not what happened. They did not overbook the flight; they had a fully booked flight, and not only did everyone already have a reserved confirmed seat, they were all sitting in them. The law allowing them to deny boarding in the event of an oversale does not apply. 2. Even if it did apply, the law is unambiguously clear that airlines have to give preference to everyone with reserved confirmed seats when choosing to involuntarily deny boarding. They have to always choose the solution that will affect the least amount of reserved confirmed seats. This rule is straightforward, and United makes very clear in their own contract of carriage that employees of their own or of other carriers may be denied boarding without compensation because they do not have reserved confirmed seats. On its face, it’s clear that what they did was illegal– they gave preference to their employees over people who had reserved confirmed seats, in violation of 14 CFR 250.2a. 3. Furthermore, even if you try and twist this into a legal application of 250.2a and say that United had the right to deny him boarding in the event of an overbooking; they did NOT have the right to kick him off the plane. Their contract of carriage highlights there is a complete difference in rights after you’ve boarded and sat on the plane, and Rule 21 goes over the specific scenarios where you could get kicked off. NONE of them apply here. He did absolutely nothing wrong and shouldn’t have been targeted. He’s going to leave with a hefty settlement after this fiasco.
  - gareim 9y ago
    1. Did you mean United and not Delta? 2. If what you said is true, then how is it that Delta is able to make their new maximum compensation $9,950, as stated in the second sentence of this article?
    - mikeash 9y ago
      The regulation says that airlines must offer at least this amount before they start involuntarily removing people. Airlines are free to offer more, they just can't stop at a lower amount.
      - gareim 9y ago
        Right.. but far back up, the poster (not the one I replied to, which is just agreeing) stated that regulations got us into the mess by allowing a cap of ~$1300. But regulations don't stop the airlines from offering higher, and neither does the non-existence of regulations stop airlines from independently capping at ~$1300. So back to the point, how is it correct that regulations got us into this mess of ~$1300 capping?
        mikeash 9y ago
        I guess it depends on what you consider to be the "natural" regulation-free state of things. Without this regulation, would airlines be able to bump people involuntarily with no compensation at all? If so, then the regulation is a clear improvement. Or would airlines be unable to bump people involuntarily without this regulation, being required to offer potentially unlimited compensation? If this was the case, then the regulation gets a huge share of the blame for this. I'd think it would me more like the second one here, but I could be wrong.
        gareim 9y ago
        If offering potentially unlimited compensation would increase profits for airlines, then they would do it regardless of regulation of minimums wouldn't they? I make that assumption because Delta seems to be testing that theory right now. So I still don't see how regulations are impeding anything; doesn't seem to be stopping Delta whatsoever.
  - Chaebixi 9y ago
    > Delta offered this maximum, and was declined by all passengers. > Then Delta called government law enforcement offers > Now due to the losses in stock price Delta has reevaluated it's risk/reward on terms of bumping passengers You're confused. The recent controversy was caused by United calling law enforcement after the auction hit the cap, not Delta. Delta is increasing the price they'll pay to bump to reap the PR benefits of appearing to be a better run airline.
  - markkanof 9y ago
    Don't you mean United instead of Delta throughout this post?
thomasahle 9y ago
Without the regulation, wouldn't they have been allowed to cap compensations anywhere they liked?
- Darthy 9y ago
  I refer to the fact that there is a regulation that allows a compensation cap and if there are no takers, call the cops. Remove that regulation and United would have to figure out a different way - like offer more money or face the threat of a suit. (Remember, the way things currently stand, United look like massive dicks, but they did not break the law.)
  - tyingq 9y ago
    The cap applies to involuntary denied boarding. The airline can offer whatever they want for volunteers. That does, of course, encourage a certain pattern.
  - kevin_b_er 9y ago
    Remove that regulation and united offers you $0.01 and a pat on the head for not letting you board because they overbooked.
0417_airlines 9y ago
This is incorrect. I imagine this seems like it makes sense because it happens to fit into the Republican view of regulation = bad, deregulation = good. The regulation applies to passengers denied boarding involuntarily (https://www.law.cornell.edu/cfr/text/14/250.5 https://www.law.cornell.edu/cfr/text/14/250.5). There is no mention of a maximum amount of money that can be offered to individuals volunteering not to board an overbooked flight (see https://www.law.cornell.edu/cfr/text/14/250.2b https://www.law.cornell.edu/cfr/text/14/250.2b). Indeed, it was reported that United never even approached the $1,350 mark, though I can't find these references at the moment.
thoth 9y ago
>Really free markets would have solved this. How do you figure that? Wouldn't a free market solution require United to honor its contracts and the legal system in the first place? Which they provably already ignored when they removed ALREADY BOARDED AND SEATED passengers? This didn't fall into "involuntary denied boarding" situation so United was free to offer whatever they wanted to. Which they chose not to do. Essentially, they had the situation you think would have solved the problem, but did not solve the problem.
Johnny555 9y ago
The cap is the legally required compensation limit, airlines are free to exceed it. But in the David Dao case, United didn't even reach that cap, offering $800 (as reported by witnesses, or $1,000 as reported by United). So it's not clear how this particular regulation brought us this mess when the airlines didn't even follow the regulation that required them to tell the passenger in writing what his rights (and compensation amount) were.

by Darthy 9y ago

joelrunyon 9y ago

I don't think that's a gov't regulation. That's likely an internal United standard. Delta just raised their minimum to $10k-ish if you read the article...

cmdrfred 9y ago
Actually it is, if someone is bumped from a flight the most they can legally ask for (anyone is free to give anyone money if they wish) is $1400 (I believe) or 4X the value of the ticket whatever is less. Delta offered this maximum, and was declined by all passengers. Then Delta called government law enforcement offers to enforce existing regulation and remove the passenger. Without this regulation there would have been no maximum for damages in violation of their contract, thus the passenger could of sued for a potentially unlimited amount. Thus Delta might of been inclined to offer more as their losses would possibly be higher than the maximum in the regulation. Having a maximum, and having government law enforcement enforce said maximum certainly contributed to this issue. Now due to the losses in stock price Delta has reevaluated it's risk/reward on terms of bumping passengers and decided its more cost effective to offer more. This is a perfect example of how the free market can correct these sort of things without the government getting involved at all.
- joelrunyon 9y ago
  1. This was United, not Delta. The Delta mention in my comment was their response to an industry incident 2. No one ASKED for any money. United was trying to get people to voluntarily bump by offering X - no one accepted (because the next flight didn't leave for a day). United should have realized that if they really wanted to get their employees on the flight & not have an international incident, they could go a bit higher... 3. Here's the rule: > If the substitute transportation is scheduled to get you to your destination more than two hours later (four hours internationally), or if the airline does not make any substitute travel arrangements for you, the compensation doubles (400% of your one-way fare, $1350 maximum). All of this is out the window anyways with the Dao case since it wasn't even an overbooked flight - one with too many ticketed passengers - but one where they were trying to get employees to another airport (which they could have easily booked on another airline due to internal agreements).
  - cmdrfred 9y ago
    >1. This was United, not Delta. The Delta mention in my comment was their response to an industry incident My mistake. 2. No one ASKED for any money. United was trying to get people to voluntarily bump by offering X - no one accepted (because the next flight didn't leave for a day). United should have realized that if they really wanted to get their employees on the flight & not have an international incident, they could go a bit higher... Yes, but they don't have to offer any more. The truth is you don't get to choose if you are bumped from a flight they can simply bump you and the most you can sue for is the rate specified. Without a specified rate you can argue in court that "missing the flight cost me a multi-million dollar deal" or "I missed my grandfathers final moments" and potentially get awarded many thousands or millions of dollars. That risk likely would have resulted in a very different outcome. (probably the end of overbooked flights and increases in airline fares/stricter restrictions on missing flights to compensate) >All of this is out the window anyways with the Dao case since it wasn't even an overbooked flight - one with too many ticketed passengers - but one where they were trying to get employees to another airport That's something for his lawyers to look into of course, I have a feeling the 300K a year guys they keep on retainer who likely approved this policy have a good idea of how they can argue this was legal under current regulation. That or the legal department at United will have some openings soon.
    - tiatia 9y ago
      "That's something for his lawyers to look into of course, I have a feeling the 300K a year guys they keep on retainer who likely approved this policy have a good idea of how they can argue this was legal under current regulation." They can argue. But will the judge or jury agree? Regarding the boarding, this was posted by a lawyer and makes it look a little bit like a clusterfuck. Could get quite pricey for United. 1. First of all, it’s airline spin to call this an overbooking. The statutory provision granting them the ability to deny boarding is about “OVERSELLING”, which is specifically defined as booking more reserved confirmed seats than there are available. This is not what happened. They did not overbook the flight; they had a fully booked flight, and not only did everyone already have a reserved confirmed seat, they were all sitting in them. The law allowing them to deny boarding in the event of an oversale does not apply. 2. Even if it did apply, the law is unambiguously clear that airlines have to give preference to everyone with reserved confirmed seats when choosing to involuntarily deny boarding. They have to always choose the solution that will affect the least amount of reserved confirmed seats. This rule is straightforward, and United makes very clear in their own contract of carriage that employees of their own or of other carriers may be denied boarding without compensation because they do not have reserved confirmed seats. On its face, it’s clear that what they did was illegal– they gave preference to their employees over people who had reserved confirmed seats, in violation of 14 CFR 250.2a. 3. Furthermore, even if you try and twist this into a legal application of 250.2a and say that United had the right to deny him boarding in the event of an overbooking; they did NOT have the right to kick him off the plane. Their contract of carriage highlights there is a complete difference in rights after you’ve boarded and sat on the plane, and Rule 21 goes over the specific scenarios where you could get kicked off. NONE of them apply here. He did absolutely nothing wrong and shouldn’t have been targeted. He’s going to leave with a hefty settlement after this fiasco.
- gareim 9y ago
  1. Did you mean United and not Delta? 2. If what you said is true, then how is it that Delta is able to make their new maximum compensation $9,950, as stated in the second sentence of this article?
  - mikeash 9y ago
    The regulation says that airlines must offer at least this amount before they start involuntarily removing people. Airlines are free to offer more, they just can't stop at a lower amount.
    - gareim 9y ago
      Right.. but far back up, the poster (not the one I replied to, which is just agreeing) stated that regulations got us into the mess by allowing a cap of ~$1300. But regulations don't stop the airlines from offering higher, and neither does the non-existence of regulations stop airlines from independently capping at ~$1300. So back to the point, how is it correct that regulations got us into this mess of ~$1300 capping?
      - mikeash 9y ago
        I guess it depends on what you consider to be the "natural" regulation-free state of things. Without this regulation, would airlines be able to bump people involuntarily with no compensation at all? If so, then the regulation is a clear improvement. Or would airlines be unable to bump people involuntarily without this regulation, being required to offer potentially unlimited compensation? If this was the case, then the regulation gets a huge share of the blame for this. I'd think it would me more like the second one here, but I could be wrong.
        gareim 9y ago
        If offering potentially unlimited compensation would increase profits for airlines, then they would do it regardless of regulation of minimums wouldn't they? I make that assumption because Delta seems to be testing that theory right now. So I still don't see how regulations are impeding anything; doesn't seem to be stopping Delta whatsoever.
- Chaebixi 9y ago
  > Delta offered this maximum, and was declined by all passengers. > Then Delta called government law enforcement offers > Now due to the losses in stock price Delta has reevaluated it's risk/reward on terms of bumping passengers You're confused. The recent controversy was caused by United calling law enforcement after the auction hit the cap, not Delta. Delta is increasing the price they'll pay to bump to reap the PR benefits of appearing to be a better run airline.
- markkanof 9y ago
  Don't you mean United instead of Delta throughout this post?

thomasahle 9y ago

Without the regulation, wouldn't they have been allowed to cap compensations anywhere they liked?

Darthy 9y ago
I refer to the fact that there is a regulation that allows a compensation cap and if there are no takers, call the cops. Remove that regulation and United would have to figure out a different way - like offer more money or face the threat of a suit. (Remember, the way things currently stand, United look like massive dicks, but they did not break the law.)
- tyingq 9y ago
  The cap applies to involuntary denied boarding. The airline can offer whatever they want for volunteers. That does, of course, encourage a certain pattern.
- kevin_b_er 9y ago
  Remove that regulation and united offers you $0.01 and a pat on the head for not letting you board because they overbooked.

0417_airlines 9y ago

This is incorrect. I imagine this seems like it makes sense because it happens to fit into the Republican view of regulation = bad, deregulation = good. The regulation applies to passengers denied boarding involuntarily (https://www.law.cornell.edu/cfr/text/14/250.5 https://www.law.cornell.edu/cfr/text/14/250.5). There is no mention of a maximum amount of money that can be offered to individuals volunteering not to board an overbooked flight (see https://www.law.cornell.edu/cfr/text/14/250.2b https://www.law.cornell.edu/cfr/text/14/250.2b). Indeed, it was reported that United never even approached the $1,350 mark, though I can't find these references at the moment.

thoth 9y ago

>Really free markets would have solved this. How do you figure that? Wouldn't a free market solution require United to honor its contracts and the legal system in the first place? Which they provably already ignored when they removed ALREADY BOARDED AND SEATED passengers? This didn't fall into "involuntary denied boarding" situation so United was free to offer whatever they wanted to. Which they chose not to do. Essentially, they had the situation you think would have solved the problem, but did not solve the problem.

Johnny555 9y ago

The cap is the legally required compensation limit, airlines are free to exceed it. But in the David Dao case, United didn't even reach that cap, offering $800 (as reported by witnesses, or $1,000 as reported by United). So it's not clear how this particular regulation brought us this mess when the airlines didn't even follow the regulation that required them to tell the passenger in writing what his rights (and compensation amount) were.