United Cuts Denied Boarding Compensation By 75%

United Airlines set the world on first when David Dao was dragged off of a United Express plane and bloodied three years ago. United’s CEO Oscar Munoz apologized… for having to re-accommodate him.

The worldwide outcry was so great that airlines had to revisit their policies for involuntary denied boardings. Instead of just shrugging their shoulders when they don’t have enough seats for passengers and paying out the legal minimum (generally capped at $1350 cash), airlines worked hard to offer bigger amounts in travel vouchers to avoid involuntarily denying boarding to passengers at all.

United, for its part, started giving out up to $10,000 if necessary and gave out $100,000 in vouchers on a single flight as recently as two months ago.

However with the airline cutting costs wherever they can, indeed doing so without respect to customers, it appears they’ve nearly returned to the David Dao era of involuntary denied boarding compensation.

Live and Let’s Fly reports that involuntary denied boarding compensation will now be capped at $2500 in vouchers (75% reduction) and involuntary downgrade compensation will be capped at $1500 (85% reduction). According to this source, here’s what United is telling employees about the change:

As we look across our business, we’ve discovered that some policies that made sense in a pre-COVID-19 world no longer do so within the current operating environment, whether that’s due to low travel demand or because existing policies impact far fewer customers.

That’s why, beginning May 1, we are reducing the maximum Electronic Travel Certificate (ETC)/Miles equivalent amount of compensation we offer customers in the event of a voluntary denied boarding from $10,000 to $2,500; and from $10,000 to $1,500 in the event of a downgrade. The escalation and solicitation processes, and fare difference policy for involuntary downgrades, will stay the same.

In addition, the DOT-mandated compensation for involuntary denied boardings will not change and the new ETC/Miles equivalent will be capped at $2,500 ETC. These compensation amounts continue to be higher than what the DOT currently requires for involuntary denied boardings. DOT policy for involuntary denied boarding compensation is 4x the one-way fare but no more than $1,350. With our cap of a $2,500 ETC, we’re still 85% higher than the DOT requirement.

Overall, we’ve seen the number of denied boardings dramatically decrease over the last several years, with a very small number of customers eligible for voluntary denied boarding compensation.

Airport Operations Customer Service Representatives and Contact Center agents should refer to their department communications for additional information about the policy and procedure changes.

While very few customers receive the maximum amount of compensation, every dollar counts in this environment.

We will continue to monitor this ever-changing situation and share additional adjustments to policies and procedures as needed to manage our costs during this crisis.

There aren’t that many flights with too many passengers right now, and we’re only talking about United Airlines scrip, so the cost isn’t huge and neither are the savings.

United points out that they are still doing more than what’s legally required. But looking to DOT minimum requirements as their True North, rather than ‘what’s right’, is what got them into trouble in the first place.

Of course airlines had already started trying to rein in these costs before the pandemic hit.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Doesn’t sound completely unreasonable given how light the loads are right now. United’s new policy won’t bite it the butt for a while. How much can this really save them though?

  2. As a cost-saving tactic, does this mean that United Airlines passenger beatings will now be 75% less severe and 75% less painful?

  3. @Daniel – Doesn’t sound completely unreasonable?

    They’re making this change, now, not just to preserve cash (I’d imagine there are darn close to 0 flights right now where they’re forced to offer anything at all), but to get the change in when customers aren’t paying attention.

    This benefits no one but Untied. The timing is meant to deflect blame (it’s because of the virus!). They’re screwing you, and you’re saying it sounds “not completely unreasonable.” I disagree wholeheartedly.

  4. I agree all sorts of orgs are going to try to get away with anticonsumer policies under the name of Covid19, just like some similar practices took place after 9/11 in the name of security. I’m not naive enough to believe the rhetoric. They are also often trying to address problems they rarely have, how many times did they pay out $10,000 in VDB?

  5. Race to the bottom. . .UA is winning! They will be Alaska Airlines with flights to Asia and Germany once this is all over. Our nations new number 7 air carrier. Nice job Kirby

  6. This can’t mean that if I book a full fare business class ticket from San Francisco to Tel Aviv and I get downgraded to coach that all they will give me is a $1500 voucher, right? The cost difference between those two tickets will be multiples of that.

  7. Since when did UA decide to turn its back on the FAA and DOT?

    Makes one long for the CAB were policies were quite explicit; not left up to an airline’s CEO to decide what could be interpreted strictly against the interests of the passenger.

    Apparently UA seeks to lead the pack of who can best emulate Aeroflot…

  8. UA is on a dead sprint to the title of America’s Worst Company over the past month it seems

  9. United didn’t drag David Dso off the plane and bloody him, airport security did when he selfishly threw a tantrum and refused to leave private property, causing inconvenience to all the other passengers. . I’m really tired of your blurring of this issue. If you ask someone to leave your home and they refuse, and you call the police for assistance, are you responsible If they need to use force?

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