An incident in 2017 involving an overbooking on a United Airlines flight, in which a passenger was removed violently from the aircraft raised global awareness of airline overbooking and related consumer protection. The Consumer Council conducted a survey with 15 airlines on their overbooking policies and found a dismal lack of transparency. On the websites of the majority of the airlines, these policies and relevant compensation mechanisms were not stated clearly, and there was not much information available on the service hotlines or from frontline staff at airport service counters. Travel agencies selling air tickets may not be able to fully explain the overbooking policy either. As a result, when consumers are denied boarding because of airline overbooking, they would become helpless. The Council stresses that despite the absence of legislation governing airline overbooking in Hong Kong, airlines are responsible for providing timely, clear and detailed information to passengers, and are urged to rigorously review their existing overbooking policies and handling procedures, and to implement immediate improvements.
As recently as April last year, the Council held a meeting with the Board of Airline Representatives Hong Kong (BAR) to exchange views on this issue. The BAR undertook to encourage its member airlines to provide transparent information to passengers including a clear definition of overbooking, compensation details, handling procedures, the timeline for making claims, etc. However, as revealed in the survey, the situation is still far from satisfactory.
The survey covered 15 airlines with relatively bigger weekly passenger load – 2 low-cost carriers and 13 conventional airlines. The survey gleaned through the airline websites for information relating to overbooking policies including handling procedures, alternative arrangements, compensation, etc. The information was collated and forwarded to the airlines concerned for verification. Only 5 airlines were willing to verify the information gathered of which 3 also provided supplementary information; 3 airlines returned with just a general response; 1 airline offered only supplementary information; while the other 6 airlines failed to respond before publication deadline or declined to participate in the survey. The Council stresses that as a responsible business operator, the airline industry has the obligation to clearly explain their overbooking policies to consumers. Even the Council’s request for information was refused, it is unlikely that consumers will ever obtain such information.
The survey showed that while all airlines had the terms and conditions and relevant information concerning overbooking on their website, the majority of them did not state clearly their subsequent arrangement and compensation details. Only 2 airlines specified relatively clear information on the boarding priorities and alternative flight arrangements; and compensation amount for passengers being denied boarding involuntarily. The other airlines merely offered very sketchy information in which 6 airlines vaguely indicated that compensation would be provided in accordance with the relevant legislation without providing further details on the arrangement of alternative flight, the criteria for compensation and the compensation amount.
There was also no uniformity as to where the overbooking policies be posted on the airlines’ websites. Some airlines posted their overbooking policies on the “Conditions of Carriage” webpage, some included related information in their “Customer Commitment” or “Customer Service Plan” section, while some mentioned arrangement in the form of notices or announcements. For denied boarding or overbooking, the airlines present such information very differently, such as “denied boarding”, “oversales” “overbooking” and “involuntary rerouting”, which makes passengers even more confused and more difficult to compare.
With a view to exploring what other channels consumers can use to obtain information on airline overbooking policies, the Council posing as prospective consumers made a total of 48 enquiries with 15 airlines, including 45 hotline enquiries and 3 in-person enquiries at airport service counters. The findings showed that even airline frontline staff might not be clear about overbooking arrangements, with 60% of them responding that they could offer no information on the company’s overbooking policies, or there was no relevant information on the company’s website. Also, 30% replied that they were not clear about the compensation mechanism for overbooking, or that the company had not provided any special guidelines or specific standards regarding overbooking.
In addition, the Council made enquiries (30 times) with 15 licensed travel agents, including 5 online operators, to find out their awareness of airline overbooking policies and how they handled passengers who sought their assistance. About 30% indicated that they were only intermediaries or agents for ticket sales and were unclear about the overbooking arrangements of the airlines; aggrieved customers were suggested to contact the airlines directly for customer service and compensation matters.
The survey findings reflected that regardless of the channel, such as airline websites, service hotlines or airport frontline staff, as well as travel agencies that sell air tickets, passengers were unable to obtain comprehensive information as to the arrangements and compensation details for denied boarding due to overbooking. This situation is extremely unsatisfactory.
The Council noted that some jurisdictions have stipulated compensation details for overbooking, airlines are therefore obligated under the law to provide redress. According to US Department of Transportation regulations, for passengers involuntarily denied boarding because of airline overbooking, the compensation must be based on the price of the ticket and the delay in arrival time of the alternative flight at the destination. For a delay of over 2 hours (for domestic flights) or over 4 hours (for international flights), the maximum compensation is US$1,350 (HK$10,530). In Europe, the EU regulations on all flights taking off from EU member countries stipulate that passengers denied boarding because of overbooking will be compensated according to the distance of the flights. The highest compensation amount for passengers of involuntary denied boarding is €600 ($6,000).
In other regions, such as Asia, Mainland China and Hong Kong, most airlines provide no concrete information on compensation amount or how it is calculated. For popular routes of Hong Kong passengers in Southeast Asia and various cities in the Mainland, if passengers are denied boarding due to overbooking, passengers are left to their own to negotiate compensation with the airline.
In many cases the losses to passengers because of denied boarding cannot be compensated by money. The Council stresses that airline industry must take immediate actions to enhance the transparency of their overbooking policies and procedures to ensure that when passengers are denied boarding due to overbooking, they are fully informed of how the airline will follow up and provide alternative arrangements and compensation.
Advice for the airline industry
- Enhance the transparency of airline overbooking policies, and provide clear information to passengers about the definition of overbooking, compensation details, handling procedure, claims procedure and timeline, etc;
- Devise policy guidelines, to ensure that various information channels, such as the airline website, service hotlines, concerning travel agencies, and frontline airport staff are able to provide clear and accurate information;
- In the event of overbooking, assess the situation carefully to minimize the impact on passengers;
- Strengthen cooperation among airlines so that if an airline is unable to accommodate all passengers because of overbooking, alternative arrangements can be made swiftly to put them on the next available flight or to refund and offer reasonable compensation;
- Work jointly with airline industry stakeholders in different jurisdictions, starting from the local regulatory authorities and international airline association with a view to reaching a global agreement to extend the clear and standard protection on overbooking, from the western countries to Asia.
Advice for consumers
- Check-in and reserve your seats on the airline website as soon as possible: for instance 24 to 48 hours before departure, depending on the check-in policies of the airlines;
- On the day of departure, turn up early at the airport to complete the check-in procedures;
- If you are denied boarding because of airline overbooking, ask the airline for clear compensation details (e.g., cash compensation on the spot) and the arrangements for an alternative flight;
- If the alternative flight is scheduled to leave on the next day, find out whether the compensation will cover the cost of overnight accommodation and transportation;
- If you need to travel to an airport in a nearby city to catch the alternative flight, find out whether the airline will pay for the cost of transportation;
- Retain all relevant documents as evidence in case there is any dispute in the future.
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