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Airlines

Delta Broke Passenger-Bumping Rules. The Penalty? Buy Some Tablets


Delta Broke Passenger-Bumping Rules. The Penalty? Buy Some Tablets

Photograph by Justin Sullivan/Getty Images

Federal regulators slapped Delta Air Lines (DAL) with a $750,000 fine Wednesday for not compensating passengers bumped from flights, the company’s second such violation in four years. The U.S. Department of Transportation said Delta had not sought volunteers willing to relinquish their seat on oversold flights, a common industry practice aimed at mitigating the large number of people who miss flights they have booked.

The interesting part is the remedy Delta negotiated with federal regulators: $425,000 of the fine will go for the airline to buy tablet devices to record what happens when a flight is oversold and the hunt for volunteers begins. It’s the first time a DOT consent order has included tablet purchases to help an airline comply with the rules, department spokesman Bill Mosley said in an e-mail.

The penalty dates to March 2012, when an agency inspector visited Delta’s Atlanta headquarters and discovered evidence that the airline was not following the passenger-bumping rules. In some cases, the DOT said, Delta bumped passengers but did not inform them they had a right to cash compensation and classified some passengers bumped involuntarily as people who had agreed to give up their seats. So the data Delta was required to report on bumping weren’t accurate. The department fined Delta $375,000 in July 2009 over similar bumping violations.

The latest penalty could be considered a bit of a technology-infrastructure win for Delta, which has been spending heavily in recent years to upgrade its mobile and online tools to help passengers check in and manage travel itineraries. The airline has 15 months to equip and train its gate agents with new tablets. A Delta spokesman said the airline hasn’t chosen between Apple (AAPL) iPads or Androids—the settlement doesn’t specify a tablet brand.

Bachman is an associate editor for Businessweek.com.

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