ATLANTA - Delta Air Lines (DAL) is giving airport employees permission to offer passengers up to almost $10,000 per person in compensation to give up their seats on overbooked flights.
Delta’s move comes as United Airlines (UAL) struggles to recover from images of a passenger’s forced removal from a sold-out flight. Of course, Delta suffered its own public relations disaster last week when storms forced it to cancel 4,000 flights, prompting anger about its preparations for disruptions.
In an internal memo obtained by the Associated Press, Delta says gate agents can offer up to $2,000 in compensation, up from a previous maximum of $800, and supervisors can offer up to $9,950, up from $1,350.
Other airlines did not immediately comment on whether they would raise their ceiling.
When there aren’t enough seats, airlines usually ask for volunteers by offering travel vouchers, gift cards or cash.
Last year Delta got more passengers to give up their seats than any other U.S. airline, partly by paying more than most of the others.
As a result, it had the lowest rate among the largest U.S. airlines of bumping people off flights against their will -- something that is legal but alienates customers and requires the airline to pay compensation of up to $1,350 per person.
Overselling flights is a fact of life in the airline business. Industry officials say that it is necessary because some passengers don’t show up, and that overbooking keeps fares down by reducing the number of empty seats.
The practice has been questioned, however, since a 69-year-old man was violently dragged off a sold-out United Express flight last Sunday. He and three others were ordered off the plane after four airline employees showed up and demanded seats so they could be in place to operate a flight the next day in Louisville, Kentucky.
It has turned into a public-relations nightmare for the entire industry, not just United, and led to calls from politicians and consumer advocates to suspend or ban overbooking. On Thursday, attorneys for the ejected United passenger, David Dao, said he had sustained injuries, including a concussion, and likely would sue the airline.
Ben Schlappig, a travel blogger who first wrote about the Delta compensation increase, said it shows Delta is trying to reduce forced bumping. He said he couldn’t imagine many situations in which people wouldn’t jump at nearly $10,000.
Delta no doubt hopes that gate agents and their supervisors won’t need to make maximum offers, and the financial cost to the airline is likely to be limited. If Delta paid $9,950 to every person it bumped involuntarily last year, that would total $12 million. Delta earned nearly $4.4 billion.
Raising the limits “lets them solve some PR problems” and might head off U.S. Transportation Department regulations to curb overbooking, said another travel blogger, Gary Leff. “They can say, ‘Look, we’re already solving the problem.’”
An Associated Press analysis of government data shows that in 2015 and 2016, Delta paid an average of $1,118 in compensation for every passenger that it denied a seat. Southwest Airlines paid $758, United $565, and American Airlines $554.
After the incident in Chicago, critics questioned why United didn’t offer more when no passengers accepted the airline’s $800 offer for volunteers to give up their seats.
“If you offer enough money, even the guy going to a funeral will sell his seat,” said Ross Aimer, a retired United pilot.
CBS News/Associated Press