Pay-out plan may thwart bid to reduce overbooked flights

Date: 17/05/01

By Laurence Frost

Passengers on overcrowded flights could be offered inducements to give up their seats voluntarily, under a scheme backed by airlines and the European Commission.

But the industry is warning that moves to increase compensation by up to 400% for those who are turned away could scupper the voluntary initiative, designed to make seat allocation fairer.

Under the volunteer system, modelled on US practice, airline staff would ask passengers on overbooked flights to consider taking a later plane in exchange for cash or extra tickets.

The airlines believe this is a fairer system than the current one in Europe, which allows airlines to arbitrarily prevent passengers from boarding.

"You could have one passenger who really needs to be on a particular flight and another who has more time to spare," said Kees Veenstra of the Association of European Airlines. "For $150, the second passenger might be quite happy to wait three hours for the next flight. It's an outcome that suits everybody - but you forego that if you don't have a voluntary system."

Transport Commissioner Loyola de Palacio will give her backing to the voluntary scheme when she publishes proposals on overbooking in coming weeks. But the plans are also likely to increase compensation substantially for passengers who have to be turned away.

"We will also say that you can't deny boarding to anybody," said a Commission official. When there is no choice, minimum compensation payments by airlines would be "three to four times higher" than under the old legislation, he said.

But airlines say such a large hike would remove the rationale for a voluntary scheme.

"If you quadruple the statutory penalty and everyone knows they can get that amount, what is the sense for an airline to run the system?" said Veenstra. "You undermine what you set out to achieve - that the passengers who really need to fly get the tickets."

Airlines maintain that a total ban on overbooking would leave more seats empty, with negative consequences for ticket prices and the environment.

THE European Commission has welcomed new voluntary codes on passengers' rights drawn up by airlines and airports, but said they do not go far enough.

The 'bill of rights' presented by industry groups last week in Lisbon includes minimum guarantees on liability for lost baggage and the provision of meals and accommodation for delayed passengers.

The Commission also pledged to introduce binding legislation on airline contracts, cancellations and the compulsory provision of data for consumer reports comparing firms' performance.

Passengers on overcrowded flights could be offered inducements to give up their seats voluntarily, under a scheme backed by airlines and the European Commission.