What Airlines Should Consider to Avoid Legal Issues When Navigating Reduced Flight Capacity During COVID-19
Since the beginning of the COVID-19 pandemic, most industries have felt some sort of economic impact, the airline industry being no different. With somewhere between a fifty to seventy-five percent decrease in consumer demand for commercial air travel in 2020, most experts agree that it may take several more years for air travel to reach pre-COVID levels. Despite a decrease in the total number of commercial flights, certain issues have remained, even becoming exacerbated by the rapid fluctuation in flight frequency. One such issue is the mechanism by which airlines predict these novel irregularities in demand, oftentimes resulting in flights that may be half-empty, or conversely, flights that remain oversold – is called "bumping."
Overbooking has been part of the framework of airline ticketing for years and is based on statistical averages to ensure full flights as often as possible. As a result, when boarding begins at the gate, the passenger-to-seat ratio is occasionally uneven as there are more passengers present who are scheduled to fly than there are available seats.
If an airline is unsuccessful in persuading passengers to voluntarily concede their seat, typically done via incentivized vouchers, seats may then be involuntarily conceded, and a passenger denied boarding or “bumped” from the flight. Overbooking and bumping are permissible business practices and most airlines do it in some way in order to account for passengers who change their plans before the flight or do not show up to board.
While the United States Department of Transportation (DOT) establishes most rules that govern bumping situations, such as providing a written statement describing a passenger’s rights and setting forth compensation requirements, airlines themselves typically utilize their own criteria to determine which passengers will be involuntarily denied boarding.
For example, according to the DOT, airlines may look to a passenger’s check-in time, the fare paid by the passenger, or the passenger’s frequent flyer status as factors to determine priority. However, an airline’s criteria cannot subject a passenger to any unjust or unreasonable prejudice or disadvantage, such as using a passenger’s race, ethnicity, or any other constitutionally protected attribute as a means to determine who is bumped and who is permitted to maintain their seat.
When airlines do need to make bumping decisions, it is important to consider avoiding several pitfalls that potentially could lead to legal liability. Not only is it critical to ensure that bumping criteria are based on objective non-discriminatory factors, but those passengers who are selected must be compensated appropriately and consistent with federal regulations.
For example, there have been recent cases of airlines incurring significant fines enforced by the DOT for improperly distinguishing and misclassifying voluntary seat concessions from instances of involuntarily bumping, while also improperly notifying those bumped that they were entitled to cash or check before offering travel vouchers, as required by federal law.
Importantly, new laws are emerging that will govern instances of involuntary denial of boarding. Specifically, 14 CFR Parts 250, 254 have recently passed the final rulemaking stage. This new legislation will change several key areas.
First, while traditionally airlines have been able to make bumping decisions at any point in time prior to take-off — such as shortly after booking, at check-in, during boarding, or even after passengers have boarded the aircraft and were in their seat — the boundaries as to the timing of such notification will change. Bumping protocols will now prohibit airlines from bumping after a passenger’s boarding pass has been collected or scanned and the passenger has boarded the plane, subject to safety and security exceptions.
Further, the amount of Denied Boarding Compensation that a carrier may provide to a passenger who was involuntarily denied boarding is unlimited. Additionally, this final rule raises the liability limits for denied boarding compensation that U.S. and foreign air carriers may impose from the current figures of $675 and $1,350 to $775 and $1,550, respectively. The new rules will take effect April 13.
As many industries continue to navigate the remainder of the pandemic, legislation changes that address issues resulting from COVID-19 operational changes will continue to surface. Businesses must remain up-to-date and diligent in tracking these changes to minimize their legal liabilities.
Mony B. P. Yin is managing attorney of the Perez Morris Hyde New York, Connecticut and Massachusetts offices. She also defended employers and insurance carriers in various Workers’ Compensation matters in Connecticut. Her practice focuses on defense of commercial entities, restaurants, retailers and professionals in complex, high-exposure litigation, including construction defects and healthcare professionals. Prior to Perez Morris Hyde, Mony handled complex litigation for private law firms and major insurance companies, where she successfully completed jury and courtside trials, mediations and arbitrations in state and federal courts.
Michael W. Aceto joined Perez Morris Hyde in 2020. An experienced trial lawyer, he focuses his practice on aviation, product liability, toxic tort, environmental, hospitality, and public entity law as well as other areas of general liability. He counsels clients in complex matters regarding commercial and industrial accidents, involving technical equipment, motor vehicles, construction machinery, household consumer products, as well as aviation-related issues.
