Gift cards and more: How Delta beats United in handling overbooked flights

Delta frequently offers fliers gift vouchers to avoid involuntarily bumping them

United and Delta airlines both bumped scores of passengers because of operational problems this past weekend, but one airline ended up facing world-wide outrage and the other managed more deftly.

That is because Delta and United take different approaches to bumping passengers. When it comes to bumping, Delta is more generous than United and other airlines, government data shows.

When it decided it had to put four crew members on a flight from Chicago to Louisville, Ky., Sunday evening, United asked for volunteers, offering a hotel for the night, a reservation for a flight the next afternoon, and a voucher for $800. The airline says it raised the offer to $1,000. There were no takers, and United didn’t raise the offer further.

Instead, it selected four passengers to bump involuntarily. Usually this happens before boarding, but in this case, passengers were already in their seats. Three agreed to get off the plane; one man refused and was dragged off by airport police. Video of the incident horrified people world-wide, and at the same time confirmed what many see as typical airline treatment of passengers as cargo not customers.

Delta, meanwhile, had a week of cancellations after severe storms ripped through its Atlanta hub. The airline ended up with planes and crews out of position and faced crew shortages. Standby lists grew. Delta, with flights severely overbooked, also faced the challenge of getting pilots and flight attendants on flights so they’d be in place for future flights.

The airline ended up delighting some customers by handing out gift cards to entice people to voluntarily give up seats. Customers reported offers of $800, $1,000 and even $1,350 per passenger in gift cards from American Express , Bloomingdales and Best Buy. Many took to social media to gloat.

Delta’s willingness to go above $1,000 may have lured some volunteers, and the offer of gift cards was extremely appealing to many fliers. Some veteran travelers discount airline vouchers because they can be hard to use, and since they can only be cashed in for trips, infrequent fliers may not see much value either. But gift cards are just like cash in consumers’ pockets.

Last year, Delta had the highest rate of people without seats for flights by far and United was No. 2. But they handled those customers differently, according to DOT data. Delta was the most generous airline in voluntary compensation. On Delta, 100 times as many customers voluntarily took vouchers as those who were involuntarily denied boarding. United had 17 times as many volunteers as customers involuntarily denied boarding: 62,895 volunteers and 3,765 forcibly bumped.

When airlines involuntarily bump passengers, they are required to compensate customers with cash of four times the one-way fare, up to $1,350.

Bottom line: Even though Delta did more overbooking, United had three times as many customers involuntarily denied boarding as Delta.

Source: The Wall Street Journal