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Flight Refund and Compensation Compared – Everything You Need To Know

The aviation industry in the United States is administered by the U.S. Department of Transportation (DOT). In this guide, we shall take a detailed look at a few major differences between flight refund and compensation policies of commercial airlines. Flight Refund and Compensation Compared here, read full article.

Flight Refund and Compensation Compared

Airlines, not only in the United States, but in other continents as well, such as European countries, Asia, Middle East, Africa and Oceania have a pre-defined policy that may vary with regard to managing airline ticket refunds and compensations. Their policies may also affect passengers in either way, i.e., there may be benefits and drawbacks, depending on the situation and, of course, passenger’s itinerary.

In the following sections, we are going to list a few comparisons between the refund and compensation policies of airline tickets.

Flight Ticket Refund Eligibility Criteria

In the following situations, passengers are entitled to a refund of the ticket price and/or associated fees.

Cancelled Flight: A passenger is entitled to a refund if the airline cancelled a flight, regardless of the reason, and the passenger chooses not to travel.

Schedule Change/Significant Delay – A passenger is entitled to a refund if the airline made a significant schedule change and/or significantly delays a flight and the passenger chooses not to travel.

DOT has not specifically defined what constitutes a “significant delay.”  Whether you are entitled to a refund depends on many factors – including the length of the delay, the length of the flight, and your particular circumstances.  DOT determines whether you are entitled to a refund following a significant delay on a case-by-case basis.

Class of Service Change: A passenger is entitled to a refund if the passenger was involuntarily moved to a lower class of service.  For example, if the passenger purchased a first-class ticket and was downgraded to economy class due to an aircraft swap, the passenger is owed the difference in fares.

Optional Service Fees: A passenger is entitled to a refund of fees paid for an optional service (for example, baggage fees, seat upgrades, or in-flight Wi-Fi) if the passenger was unable to use the optional service due to a flight cancellation, delay, schedule change, or a situation where the passenger was involuntarily denied boarding.

In situations where you have purchased an optional service and that amenity either does not work or is not available on the flight, you may need to notify the airline of the problem to receive a refund.

Baggage Fees: A passenger is entitled to a refund if the passenger paid a baggage fee and his or her baggage has been declared lost by the airline. Airlines may have different policies to determine when a bag is officially lost.  Most airlines will declare a bag lost between five and fourteen days after the flight, but this can vary from one airline to another. If an airline unreasonably refuses to consider a bag lost after it has been missing for an unreasonable period of time, the airline could be subject to enforcement action by the DOT.

Fully refundable ticket: Passengers who purchase fully refundable tickets are entitled to a refund when they do not use the purchased ticket to complete their travel. In some cases tickets purchased overseas in foreign currency can only be refunded in that same currency and country, due to foreign government monetary restrictions. Keep this in mind if you are considering buying a ticket in a foreign country.

Flight Ticket Compensation Eligibility Criteria

Overbooking: Overbooking is not illegal, and most airlines overbook their scheduled flights to a certain extent in order to compensate for “no-shows.” Passengers are sometimes left behind or “bumped” as a result. When an oversale occurs, the Department of Transportation (DOT) requires airlines to ask people who aren’t in a hurry to give up their seats voluntarily, in exchange for compensation. Those passengers bumped against their will are, with a few exceptions, entitled to compensation.

Voluntary Bumping: Almost any planeload of airline passengers includes some people with urgent travel needs and others who may be more concerned about the cost of their tickets than about getting to their destination on time. DOT rules require airlines to seek out people who are willing to give up their seats for compensation before bumping anyone involuntarily.

Here’s how this works. At the check-in or boarding area, airline employees will look for volunteers when it appears that the flight has been oversold. If you’re not in a rush to arrive at your next destination, you can give your reservation back to the airline in exchange for compensation and a later flight.

The alternate flight may be just as acceptable to you. On the other hand, if the airline offers to put you on standby on another flight that’s full, you could be stranded. If the airline does not provide amenities such as free meals, a hotel room, transfers between the hotel and the airport, and a phone card, then you might have to spend the money it offers you on food or lodging while you wait for the next flight.

DOT has not mandated the form or amount of compensation that airlines offer to volunteers. DOT does, however, require airlines to advise any volunteer whether he or she might be involuntarily bumped and, if that were to occur, the amount of compensation that would be due. Carriers can negotiate with their passengers for mutually acceptable compensation.  Airlines generally offer a free trip or other transportation benefits to prospective volunteers.

The airlines give employees guidelines for bargaining with passengers, and they may select those volunteers willing to sell back their reservations for the lowest price. If the airline offers you a free ticket or a transportation voucher in a certain dollar amount, ask about restrictions. How long is the ticket or voucher good for? Is it “blacked out” during holiday periods when you might want to use it? Can it be used for international flights?

Involuntary Bumping: DOT requires each airline to give all passengers who are bumped involuntarily a written statement describing their rights and explaining how the carrier decides who gets on an oversold flight and who doesn’t. Those travellers who don’t get to fly are frequently entitled to denied boarding compensation in the form of a check or cash. The amount depends on the price of their ticket and the length of the delay:

(a) If you are bumped involuntarily and the airline arranges substitute transportation that is scheduled to get you to your final destination (including later connections) within one hour of your original scheduled arrival time, there is no compensation.

(b) If the airline arranges substitute transportation that is scheduled to arrive at your destination between one and two hours after your original arrival time (between one and four hours on international flights), the airline must pay you an amount equal to 200% of your one-way fare to your final destination that day, with a $675 maximum.

(c) 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).

(d) If your ticket does not show a fare (for example, a frequent-flyer award ticket or a ticket issued by a consolidator), your denied boarding compensation is based on the lowest cash, check or credit card payment charged for a ticket in the same class of service (e.g., coach, first class) on that flight.

(e) You always get to keep your original ticket and use it on another flight. If you choose to make your own arrangements, you can request an “involuntary refund” for the ticket for the flight you were bumped from. The denied boarding compensation is essentially a payment for your inconvenience.

(f) If you paid for optional services on your original flight (e.g., seat selection, checked baggage) and you did not receive those services on your substitute flight or were required to pay a second time, the airline that bumped you must refund those payments to you.

Like all rules, however, there are a few conditions and exceptions:

(a) To be eligible for compensation, you must have a confirmed reservation. A written confirmation issued by the airline or an authorized agent or reservation service qualifies you in this regard even if the airline can’t find your reservation in the computer, as long as you didn’t cancel your reservation or miss a reconfirmation deadline.

(b) Each airline has a check-in deadline, which is the amount of time before scheduled departure that you must present yourself to the airline at the airport. For domestic flights most carriers require you to be at the departure gate between 10 minutes and 30 minutes before scheduled departure, but some deadlines can be an hour or longer.

Check-in deadlines on international flights can be as much as three hours before scheduled departure time. Some airlines may simply require you to be at the ticket/baggage counter by this time; most, however, require that you get all the way to the boarding area. Some may have deadlines at both locations. If you miss the check-in deadline, you may have lost your reservation and your right to compensation if the flight is oversold.

(c) As noted above, no compensation is due if the airline arranges substitute transportation which is scheduled to arrive at your destination within one hour of your originally scheduled arrival time.

(d) If the airline must substitute a smaller plane for the one it originally planned to use, the carrier isn’t required to pay people who are bumped as a result. In addition, on flights using aircraft with 30 through 60 passenger seats, compensation is not required if you were bumped due to safety-related aircraft weight or balance constraints.

(e) The rules do not apply to charter flights, or to scheduled flights operated with planes that hold fewer than 30 passengers. They don’t apply to international flights inbound to the United States, although some airlines on these routes may follow them voluntarily. Also, if you are flying between two foreign cities, from Paris to Rome, for instance, these rules will not apply. The European Commission has a rule on bumpings that occur in an EC country.

An airline must offer 400% of the one-way fare up to $1350 to involuntarily bumped passengers arriving on a substitute flight over two hours after the planned arrival time of their original domestic flight. Airlines are free to offer involuntarily bumped passengers more money than required.

Amount of Denied Boarding Compensation for Domestic Transportation

  • 0 to 1 hour arrival delay – No compensation
  • 1 to 2 hours arrival delay – 200% of one-way fare (but no more than $675)
  • Over 2 hours arrival delay – 400% of one-way fare (but no more than $1,350)

Amount of Denied Boarding Compensation – International Transportation

  • 0 to 1 hour arrival delay – No compensation
  • 1 to 4 hours arrival delay – 200% of one-way fare (but no more than $675)
  • Over 4 hours arrival delay – 400% of one-way fare (but no more than $1,350)


The U.S. Department of Transportation (DOT) had raised the denied boarding compensation amounts and the domestic baggage liability amounts a few years ago. DOT is now reviewing the denied boarding compensation and domestic baggage liability amounts to determine if another adjustment is appropriate.

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