Ask Away: Airlines and overbooking

Dr David Dao was thrown off a United Airlines plane that was overbooked. Photo / Kaylyn Davis

Eli Orzessek looks at the topical subject of overbooking.

We were discussing (the United Airlines overbooking) situation with friends recently and they also spoke about a case with Air NZ when a lady was asked to give up her seat as she had bought the cheapest seat. Even though she had booked 10 months earlier and was going to a wedding, she had no choice. We wondered what the situation is with your travel insurance if this happens in NZ. Would you be covered for any extra expenses should they occur as a result of the airline evicting you from your flight here in NZ? We often purchase the insurance offered when booking on Air NZ. Also, does Air NZ offer any compensation to passengers if they ask them to give up their seat? At least this is offered in the US.
Sue

As we've seen with the United Airlines incident, overbooking can have dire consequences for busy travellers - and airlines too, it turns out. A necessary evil of modern day travel, overbooking allows airlines to maintain a healthy profit margin and fill the seats that no-show passengers leave behind.

The Herald recently published an article about what airlines in New Zealand do for passengers bumped from flights.

Air New Zealand said overbooking was rare, but it these situations, passengers would be asked to volunteer to be bumped. "Where your offer of volunteering to travel on an alternative flight is accepted by Air New Zealand, you will be compensated," its website said.

A man recently bumped from an Air New Zealand flight to Queenstown received a $200 flight voucher as compensation.

A Jetstar spokesman said airlines here were conservative around overbooking.

"In the rare event a passenger is unable to be checked in for a Jetstar flight due to overbooking this would be managed prior to boarding. We will offer a seat on the next available flight and consider a range of other options, including compensation, in recognition of the inconvenience," he said.

According to Consumer New Zealand, clear rules around domestic flights mean airlines are required to compensate passengers who are delayed or have their flight cancelled as a result of internal issues such as airline staffing issues or mechanical problems.

These rules also apply if a passenger is bumped from a flight due to overbooking - this applies to any reasonably foreseeable extra costs incurred as a result of the delay, such as meals, taxi fares, missed events and missed flight connections.

Regarding travel insurance, Natalie Ball, director of Comparetravelinsurance.co.nz had some helpful information to share.

"Getting kicked off an overbooked flight can be understandably frustrating for travellers on tight schedules. Luckily, affected passengers can potentially claim on their travel insurance should they find themselves out of pocket for any additional travel expenses. In the event your airline will not compensate you and you have something in writing to confirm you were denied boarding due to overbooking, you would be eligible to claim," she says.

However, she notes that travellers would require a delay of six or more hours before travel insurance benefits were to kick in. Benefits would not apply to travellers who volunteered to be bumped from a flight. Neither would they apply to passengers arriving late for their flight.

"Many people believe that travel insurance will cover them regardless of the reason. Unfortunately, this is not the case. Circumstances apply."

Those unsure if they could claim for overbooking should check their travel insurance policies. "Some travel insurers would classify this type of benefit as 'disruption of journey' or 'trip disruption'. The definitions and exclusions across varying policies may differ so it's well worth taking the time to research your policy."

It's also important to remember that though you may be covered for additional food and accommodation expenses due to overbooking, the flight itself would not be covered.

"As a general rule, airlines need to take responsibility for their service. It is primarily the airline's obligation to compensate you for mechanical faults, delays or overbooking. For everything else, there is travel insurance."

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