MIAMI (CBSMiami) — Delta is letting employees offer customers nearly $10,000 in compensation to give up seats on overbooked flights, hoping to avoid an uproar like the one that erupted at United after a passenger was dragged off a jet.
In an internal memo obtained Friday by The Associated Press, Delta Air Lines said gate agents can offer up to $2,000, up from a previous maximum of $800, and supervisors can offer up to $9,950, up from $1,350.
United is reviewing its own policies, including incentives for customers, and will announce any actions by April 30, a spokeswoman said. The airline would not disclose its current compensation limit.
Other airlines said they were examining their policies. American Airlines updated its rules to say that no passenger who has boarded the plane will be removed to give the seat to someone else.
None would describe their limits on passenger compensation.
When there aren’t enough seats, airlines usually ask for volunteers by offering travel vouchers, gift cards or cash.
Last year Delta got more passengers to give up their seats than any other U.S. airline, partly by paying more than most of the others.
As a result, it had the lowest rate among the largest U.S. airlines of bumping people off flights against their will — something that is legal but alienates customers and requires the airline to pay compensation of up to $1,350 per person.
Overselling flights is a fact of life in the airline business. Industry officials say that it is necessary because some passengers don’t show up, and that overbooking keeps fares down by reducing the number of empty seats.
The practice has been questioned, however, since a 69-year-old man was violently dragged off a sold-out United Express flight over the weekend. He and three others were ordered off the plane after four airline employees showed up and demanded seats so they could be in place to operate a flight the next day in Louisville, Kentucky.
United Continental CEO Oscar Munoz’s initial attempts to apologize were roundly criticized. On Friday, company Chairman Robert Milton said the board supported Munoz.
“We need to use this regrettable event as a defining moment and pivot off it to craft friendly policies,” Milton said in a note to employees.
The dragging has turned into a public-relations nightmare for the entire industry, not just United, and led to calls from politicians and consumer advocates to suspend or ban overbooking.
Ben Schlappig, a travel blogger who first wrote about the Delta compensation increase, said it shows Delta is trying to reduce forced bumping. He said he couldn’t imagine many situations in which people wouldn’t jump at nearly $10,000.
Delta no doubt hopes that gate agents and their supervisors won’t need to make maximum offers, and the financial cost to the airline is likely to be limited. If Delta paid $9,950 to every person it bumped involuntarily last year, that would total $12 million. Delta earned nearly $4.4 billion.
Raising the limits “lets them solve some PR problems” and might head off U.S. Transportation Department regulations to curb overbooking, said another travel blogger, Gary Leff. “They can say, ‘Look, we’re already solving the problem.'”
An AP analysis of government data shows that in 2015 and 2016, Delta paid an average of $1,118 in compensation for every passenger that it denied a seat. Southwest Airlines paid $758, United $565, and American Airlines $554.
A spokesman for American said that “in light of recent events,” the airline has changed its contract terms to bar the forced removal of a paying passenger to make room for another passenger, even an airline employee.
A Southwest Airlines spokesman said high-profile events “such as this week’s discussion” have prompted the airline to redouble its review of guidance to employees over compensation. Alaska Airlines was reviewing its policies “to ensure that what happened on another carrier” doesn’t happen there, a spokeswoman said.
After the incident in Chicago, critics questioned why United didn’t offer more when no passengers accepted the airline’s $800 offer for volunteers to give up their seats.
“If you offer enough money, even the guy going to a funeral will sell his seat,” said Ross Aimer, a retired United pilot.
(TM and © Copyright 2017 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2017 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)