On January 13, 2021, the Department of Transportation (DOT) issued a new final rule amending its rules regarding oversales and compensation due to passengers who are denied boarding involuntarily — a practice known as “bumping”. The final rule was issued in accordance with the Transparency Improvements and Compensation to Keep Every Ticketholder Safe Act of 2018 (“TICKETS Act”)[1] which required the DOT complete a rulemaking to clarify that:

1. there is no maximum level of compensation an air carrier or foreign air carrier may pay to a passenger who is involuntarily denied boarding as the result of an oversold flight, and
2. the denied boarding compensation levels set forth in DOT regulations are the minimum levels of compensation an air carrier or foreign air carrier must pay to a passenger who is involuntarily denied boarding as the result of an oversold flight.

The final rule prohibits airlines from involuntarily denying boarding to a revenue passenger after the revenue passenger has checked-in for the flight and the passenger’s boarding pass has been collected or scanned and the passenger has been “accepted by the gate agent”, subject to safety and security exceptions that may require removal of the passenger. In addition, the final rule states that the passenger can be removed if the passenger is engaging in behavior that is “obscene, disruptive, or otherwise unlawful.” The final rule also makes clear that it does not limit the authority of the pilot of the aircraft provided for in 14 CFR 121.533.

The final rule provides clarifying language regarding the term: “accepted by the gate agent”. Specifically, the final rule refers to TICKETS Act and states that a carrier agent’s physical collection of a paper boarding pass alone does not indicate an acceptance of the passenger to board the aircraft. Similarly, when a carrier uses electronic devices of any kind to scan a boarding pass (e.g., a paper boarding pass, an electronic boarding pass on a mobile device), the scanning itself alone does not indicate that the carrier has accepted the passenger for boarding.

As stated by the final rule:

After the physical collection or electronic scanning, the gate agent may have reasons to not permit a passenger to board (e.g., the agent may find out that the passenger was trying to board a wrong flight, or may find out that the passenger has been selected to be involuntarily denied boarding). In those situations, the carrier may legally deny the passenger boarding because the passenger has not been accepted by a gate agent. Alternatively, if the gate agent accepts a passenger for boarding after collecting or scanning the passenger’s boarding pass, the carrier is prohibited from removing the passenger from the flight thereafter.

The final rule also lifts liability limits for denied boarding compensation for U.S. and foreign air carriers from $675 and $1,350 to $775 and $1,550. Moreover, the final rule clarifies that the maximum amount of denied boarding compensation that an airline may pay to a passenger who is bumped from a flight is not limited — that is, carriers are permitted to pay more than the amounts set by the final rule in the event of involuntary denied boarding. The chart below provides the new liability limits:

Domestic – Denied Boarding Compensation

International – Denied Boarding Compensation

In addition, the final rule raises the liability limit U.S. carriers may impose for mishandled baggage in domestic air transportation, adjusting the limit of liability from the current amount of $3,500 to $3,800. Like the denied boarding compensation limits, this liability limit is not intended to prohibit the payment of higher amounts by a carrier.

The final rule is codified at 14 C.F.R. Parts 250 and 254 and takes effect on April 13, 2021. The full text of the final rule is located here.

[1] Section 425(e) of the FAA Reauthorization Act of 2018 (Pub. L. 115–254, October 5, 2018) included the TICKETS Act.