UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY
WASHINGTON, D.C.
Issued by the Department of Transportation
on the 26th day of August, 2016
United Airlines, Inc.
Docket DOT-OST-2016-0002
Violations of 49 U.S.C. § 41712 and
14 CFR Parts 250 and 259 Served August 26, 2016
CONSENT ORDER
This order concerns violations of the Department’s oversales rule, 14 CFR Part 250 by United
Airlines, Inc., (United). Violations of Part 250 also constitute failures to adhere to the carrier’s
Customer Service Plan in violation of 14 CFR 259.5 and are unfair and deceptive practices in
violation of 49 U.S.C. § 41712. The order directs United to cease and desist from further similar
violations of 49 U.S.C. § 41712 and 14 CFR Parts 250 and 259, and assesses United $35,000 in
civil penalties.
Applicable Law
The Department’s Oversales Rule
The Department’s oversales rule reflects a carefully crafted balance between the right of
individual passengers to obtain the services they purchase on the one hand, and the ability of
carriers to market their services effectively and efficiently on the other hand. Part 250 permits
airlines to sell more tickets for a flight than there are seats on the aircraft to be used for that
flight. This allows carriers to fill seats that would otherwise have gone empty due to “no shows,”
thereby achieving operational efficiencies including revenue enhancement for carriers, and
resulting in benefits for passengers as a whole by enabling carriers to offer them lower fares.
In exchange for the ability to overbook flights (a practice that would otherwise be an unfair and
deceptive practice within the meaning of 49 U.S.C. § 41712), 14 CFR Part 250 mandates
compensation and other protections for passengers who hold “confirmed reserved space” on a
flight, have complied with the carrier’s contract of carriage, have met the carrier’s requirements
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with respect to check-in time and appearance at the gate, and have been involuntarily denied
boarding because their flight was oversold (“eligible passengers”). Specifically, under most
circumstances, Part 250 mandates that a carrier pay Denied Boarding Compensation (DBC) to
eligible passengers “on the day and [at the] place the denied boarding occurs,” with “cash or an
immediately negotiable check for the appropriate amount of compensation.” 14 CFR 250.8. The
appropriate amount of DBC varies 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 passenger’s fare to the destination or first stopover, and whether the flight
segment on which the bumping occurred was between U.S. points, or from the U.S. to a foreign
point. 14 CFR 250.5. In addition, section 250.5(e) requires the Department to review the
maximum denied boarding compensation amounts every two years and to revise the limit to
reflect changes in the Consumer Price Index for All Urban Consumers (CPI-U).
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Further, under section 250.9(a), airlines must “furnish passengers who are denied boarding
involuntarily from flights on which they hold confirmed reserved space immediately after the
denied boarding occurs, a written statement explaining the terms, conditions, and limitations of
denied boarding compensation, and describing the carriers’ boarding priority rules and criteria”
(denied boarding statement). The regulation also requires that carriers “furnish the statement to
any person upon request at all airport ticket selling positions which are in the charge of a person
employed exclusively by the carrier, or by it jointly with another person or persons, and at all
boarding locations being used by the carrier.” The denied boarding statement must contain the
language identified in section 250.9(b).
The Department’s Customer Service Plan Rule
In April 2011, the Department issued a set of rules designed to enhance protections for air travel
consumers. Among these rules, 14 CFR 259.5 requires that carriers adopt and adhere to a
Customer Service Plan that includes commitments that carriers will handle “bumped” passengers
with fairness and comply with the requirements of 14 CFR Part 250. Failure to adhere to the
requirements of Part 250 also constitutes a violation of Part 259.2
1 The minimum DBC for travel occurring on or after August 25, 2015, increased to 200 percent of the fare to the
passenger’s destination or first stopover, with a maximum of $675 (from $650), if the carrier offers alternate
transportation that is planned to arrive at the passenger’s destination or first stopover more than one hour but less
than two hours after the planned arrival time of the passenger’s original flight; and 400 percent of the fare to the
passenger’s destination or first stopover, with a maximum of $1,350 (from $1,300), if the carrier does not offer
alternate transportation that is planned to arrive at the airport of the passenger’s destination or first stopover less than
two hours after the planned arrival time of the passenger’s original flight for domestic flights. For international
flights departing from a U.S. airport, the amount of denied boarding compensation shall be no less than 200 percent
of the fare to the passenger’s destination or first stopover, with a maximum of $675 (from $650), if the carrier offers
alternate transportation that is planned to arrive at the passenger’s destination or first stopover more than one hour
but less than four hours after the planned arrival time of the passenger’s original flight; and 400 percent of the fare to
the passenger’s destination or first stopover, with a maximum of $1,350 (from $1,300), if the carrier does not offer
alternate transportation that is planned to arrive at the airport of the passenger’s destination or first stopover less than
four hours after the planned arrival time of the passenger’s original flight. (80 Fed. Reg. 30144.)
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See, e.g., American Airlines, Inc., Violations of 14 CFR Parts 250 and 259, and 49 U.S.C. §§ 41708 and 41712,
Order 2015-9-10 (Sept. 15, 2015).
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Facts and Conclusions
During compliance inspections by the Department’s Office of Aviation Enforcement and
Proceedings (Enforcement Office) at several airports across the country, United Airlines agents
at boarding locations and ticket counters being used by the carrier failed to produce proper
copies of United’s written denied boarding statement in response to specific requests by
Enforcement Office staff. In some situations, United agents were not able to produce a copy of
the denied boarding statement at either the ticket counter or the boarding gate, or both. In other
circumstances, United agents produced outdated copies of the denied boarding statement, with
compensation amounts below the minimum value stated in § 250.5.
We conclude that by failing to produce complete and accurate copies of the required denied
boarding statement upon request at both airport ticket selling positions and boarding locations,
United violated 14 CFR 250.9(a). Additionally, by failing to adhere to the requirements of Part
250, United violated 14 CFR 259.5(b)(8) and 49 U.S.C. § 41712.
Response
In response, United states that it takes its obligation to provide accurate involuntary denied
boarding statements seriously and is committed to providing its passengers with a positive travel
experience, including in the rare instances that passengers are involuntarily denied
boarding. United notes that none of the alleged violations occurred during an actual involuntary
denied boarding situation nor is there any evidence that any passenger was
undercompensated. United also notes that, for nearly half of the alleged failures, United
provided the correct involuntary denied boarding statement but with outdated maximum
compensation limits – specifically United provided $650 and $1,300 instead of the updated $675
and $1,350 maximums. The increase to the involuntary denied boarding compensation
maximums occurred on August 25, 2015, just a few weeks prior to the DOT inspections in
September 2015. United notes that updated involuntary denied boarding maximum
compensation was available on United’s website, in resources to employees, in its contract of
carriage, and to United’s gate agents and that it has increased training and review of involuntary
denied boarding documents in recent months.
Moreover, United respectfully disagrees with the Enforcement Office’s use of Part 259, to the
extent applicable, as a basis to increase the civil penalty and believes that such use is contrary to
federal law. However, in the interest of settling this matter, and without conceding or waiving its
legal position on that question, United has agreed to this compromise settlement.
Decision
The Enforcement Office views seriously United’s violations of 49 U.S.C. § 41712 and 14 CFR
Parts 250 and 259. Accordingly, after carefully considering all the facts in this case, including
those set forth above, the Enforcement Office believes that enforcement action is warranted and
is in the public interest. In order to avoid litigation, and without admitting or denying the
violations described above, United consents to the issuance of this order to cease and desist from
future similar violations of 49 U.S.C. § 41712 and 14 CFR Parts 250 and 259, and to the
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assessment of $35,000 in compromise of potential civil penalties otherwise due and payable
pursuant to 49 U.S.C. § 46301. This compromise assessment is appropriate considering the
nature and extent of the violations described herein and serves the public interest. It establishes a
strong deterrent against future similar unlawful practices by United, and other carriers.
This order is issued under the authority contained in 49 CFR Part 1.
ACCORDINGLY,
- Based on the above discussion, we approve this settlement and the provisions of this
order as being in the public interest;
- We find that United Airlines violated 14 CFR 250.9 by failing to produce proper copies
of the required denied boarding statement upon request at both boarding locations and ticket
selling counters being used by the carrier;
- We find that by engaging in the conduct described in ordering paragraph 2 above, United
Airlines failed to adhere to its Customer Commitment in violation of 14 CFR Part 259;
- We find that, by engaging in the conduct described in ordering paragraphs 2 and 3 above,
United Airlines engaged in unfair and deceptive practices in violation of 49 U.S.C. § 41712.
- We order United Airlines and its successors and assigns to cease and desist from further
violations from similar violations of 49 U.S.C. § 41712 and 14 CFR 250.9 and 259.5 as
described in ordering paragraphs 2, 3, and 4, above;
- United Airlines is assessed $35,000 in compromise of civil penalties that might otherwise
be assessed for the violations found in ordering paragraphs 2, 3, and 4, above. Of that amount,
$17,500 shall be due and payable within 30 days after the service date of this order. The
remaining amount, $17,500, shall become due and payable if, within one year of the date of
issuance of this order, United Airlines violates the order’s cease and desist provisions or fails to
comply with the order’s payment provision, in which case United Airlines may be subject to
additional enforcement action for violation of this order; and
- We order United Airline to pay within 30 days of the issuance of this order the penalty
assessed in Ordering Paragraph 7, above, through Pay.gov to the account of the U.S. Treasury.
Payment shall be made in accordance with the instructions contained in the Attachment to this
order. Failure to pay the penalty as ordered shall subject United Airlines to the assessment of
interest, penalty, and collection charges under the Debt Collection Act, and to possible
enforcement action for failure to comply with this order.
This order will become a final order of the Department 10 days after its service date unless a
timely petition for review is filed or the Department takes review on its own motion.
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BY:
BLANE WORKIE
Assistant General Counsel for
Aviation Enforcement and Proceedings
