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Delta Fined for Bumping Fliers Before Seeking Volunteers

Delta Air Lines Inc. (DAL) bumped passengers from oversold flights without compensating them or seeking volunteers, U.S. regulators said in fining the airline for the second time in four years over the issue.

The penalty was $750,000, the Department of Transportation said in an e-mailed statement today.

“Airline passengers deserve to be treated fairly, especially if they are forced to miss a flight because an airline oversold seats,” U.S. Transportation Secretary Ray LaHood said in the statement.

Anthony Black, a spokesman for Atlanta-based Delta, said the violations cited by the Transportation Department “are an isolated situation, which represent a tiny fraction of the passengers that we handle.”

Delta’s fine today follows one of $375,000 in July 2009 for similar infractions.

If an airline has sold more seats on a flight than are available, U.S. rules require that it seek volunteers willing to wait for another flight before removing, or “bumping,” passengers. Passengers who are bumped are entitled to as much as $1,300 in compensation.

Delta classified some passengers it bumped as having willingly given up their seats, which undercut their right to compensation, according to a consent order.

‘Numerous Instances’

DOT investigators found “numerous instances” of violations in a review of 310 customer complaints at Delta’s headquarters, according to the order.

While the order doesn’t contain specifics, DOT is aware of cases in which bumped passengers weren’t offered the cash compensation required, Bill Mosley, a department spokesman, said in an interview.

“The Enforcement Office views the violations uncovered during its compliance review as indicative of a wide-spread practice of noncompliance by Delta that warrants enforcement action and must be rectified,” the agency said in the order.

Delta told the department the customer complaints that led to the fine were sometimes ambiguous or incorrect. Any violations “reflected an isolated violation of Delta policy and training, not a systemic practice on Delta’s part,” Delta told the agency, according to the order.

Delta had the fifth-lowest incidence of bumping passengers out of 16 airlines that reported data during the first quarter this year, according to the DOT. It ranked better than United Continental Holdings Inc. (UAL), Southwest Airlines Co. (LUV) and AMR Corp.’s American Airlines Inc..

Delta denied boarding to 1,277 people during that span, out of a total of more than 24 million passengers, according to the agency.

Tablet Computers

Delta will be allowed to spend as much as $425,000 of the fine on improving how it complies with the regulations governing bumped passengers.

The airline agreed to purchase tablet computers to allow Delta gate agents to better keep track of passengers who were denied boarding.

“We’ve invested a considerable amount in technology that is designed to improve how we handle oversold flights,” Black said.

The technology will help Delta rebook passengers while not necessarily addressing the root cause of bumping, said George Hamlin, president of Fairfax, Virginia-based Hamlin Transportation Consulting.

“If this persists they would need to address the level to which they overbook,” Hamlin said in an interview. “Since many travelers are using nonrefundable fares, I would think there is less of a no-show problem now than there used to be.”

To contact the reporter on this story: Alan Levin in Washington at alevin24@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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