American Airlines Fined 20,000$ For Violations Of Oversales Reporting And Customer Service Handling

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The Department of Transportation (DOT) has issued a Cease and Desist Order as well as a 20,000 US$ fine against American Airlines after strong violations of applicable regulations became apparent.

AA DOT Fine

It has been established that American Airlines on at least one occasion mishandled a group of passengers who were involuntarily denied boarding and reported numerous of such incidents falsely to the authorities.

Under U.S. law (49 U.S.C. § 41708) carriers are required to submit quarterly information about it’s oversales to be analyzed and published in the in the DOT’s monthly Air Travel Consumer Report (ATCR), which ranks the reporting carriers based on various performance criteria, including the rate of involuntary denied boardings per 10,000 passengers. This same report also lists complaints of passengers made via the AirTravel Consumer Complaint Section (access the webform here).

You can have a look at the whole consent order yourself:

Download (PDF, 92KB)

On one occasion, a passenger identified as Ms Doe traveled with a group on American Airlines from Florida to London, England (MCO-MIA-LHR) and the vast majority of the group had been involuntarily denied boarding for the London-Heathrow bound flight in Miami (AA56). American provided no compensation whatsoever in Miami even though the carrier is required to do so.

These are very tight rules. As soon as a carrier bumps a passenger off a flight involuntarily immediate compensation in cash or check has to be provided.

for each passenger depending on the planned arrival time of substitute transportation arranged (or offered to be arranged) by the carrier, the value of the unused portion of the passengers fare to his or her destination, and whether the flight segment on which the bumping occurred was between U.S. points, or from the U.S. to a foreign point.

When an eligible passenger is denied boarding on a flight involving foreign air transportation and originating at a U.S. point, the DBC amount due to the passenger is 400 percent of the unused portion of the fare to the passenger’s destination or first stopover, with a maximum of $1,300, 2 if the carrier does not offer alternate transportation that, at the time the arrangement is made, is planned to arrive at the airport of the passenger’s first stopover or final destination less than four hours after the planned arrival time of the original flights.

Note that this is valid for INVOLUNTARY denied boarding. If you avail yourself as a volunteer this does not apply and the airlines is free to issue you a voucher instead whose value can be freely negotiated (you don’t HAVE to accept their offer if it doesn’t suit you).

American Airlines blatantly ignored this provision initially and also after a detailed complaint of the customer.

In an investigation of a complaint filed with the Department’s Aviation Consumer Protection Division (ACPD), the Enforcement Office found violations of Part 250 by American with regard to its handling of Ms. Doe and ten other passengers in her party after they were denied boarding involuntarily at Miami airport.

After receiving the complaint forwarded from the Department, American responded to Ms.Doe and to the Enforcement Office on several occasions. In its initial response, American acknowledged that members of Ms. Doe’s group held valid, confirmed tickets and complied with all check-in requirements and, therefore, were entitled to DBC. American’s responsefurther stated that based on the price of the tickets and the length of delay, each adult passenger in Ms. Doe’s party was entitled to either a check for $168 or a transportation voucher for $209, and each child passenger was entitled to a check for $125 or a transportation voucher for $156.

The DOT officer was not happy with that explanation and questioned American how they came up with such a low amount. American outlined that since the customers booked a consolidator fare they were unable to determine the value of the ticket and decided to apply a ‘zero fare’ calculation. In a back and forth paddling between AA and the DOT, American offered five different compensation values ranging from the above quoted 168$ per adult passenger (a joke really) to finally 848 US$ per passenger.

On another and as outlined above AA was found to have violated the regulations to truthfully report all their oversales such as in this situation properly. It was also determined that American failed to adhere to their published Customer Service Plan. In it’s findings the Department concluded

Based on the above discussion, we approve this settlement and the provisions of this order as being in the public interest.American Airlines, Inc., engaged in an unfair and deceptive practice and unfair method of competition in violation of 49 U.S.C. § 41712.

We assess American Airlines, Inc., a compromise civil penalty of $20,000 in lieu of civil penalties that might otherwise be assessed for the violations described.

To me it’s a slap on the wrist really but better than nothing. Who knows how many passengers are being denied boarding involuntarily every year without receiving any compensation. The airline staff often specifically seeks out passengers who seem uninformed or too weak to put up a fight such as seniors. Sometimes under the cover of blatant lies and excuses, it is absolutely grotesque.

Conclusion

This is an embarrassment for American Airlines but it clearly shows to what lengths these airlines go. Especially the matter of assessing appropriate damages and compensation due is an utter joke. How can a professional make so many errors in calculation when already dealing with a government agency that has them on the hook? To me, their conduct represents a high degree of either cockiness or incompetence (or both).

I found that the Department of Transportation Consumer Protection Office is a very effective tool. I have filed numerous complaints against airlines over the last ten years and often they were only willing to provide appropriate answers and compensation after contacted through the DOT. I can only encourage everybody to make use of this option in serious situations.

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