Overbooking: What to Do, Compensation, and Rights
When we buy a flight we think:
I bought it, paid for it, of course I’m going to fly, right? Well, unfortunately—or fortunately (we’ll explain this part further below)—it’s not always possible to fly with your original reservation because the airline sold more tickets than the plane could accommodate, thus creating a problem called Overbooking and you were affected. But don’t worry, you have many rights, and that’s what we’re going to explain next.
What is Overbooking?
Before we delve into passengers' rights when Overbooking occurs, we must explain what this term means. Overbooking or Overselling are terms used in the aviation world to indicate that there have been more ticket sales than the aircraft’s capacity.
For example: if a Boeing 737 can accommodate a total of 215 passengers and the airline sold 225 tickets, there was an Overbooking of 10 seats. Simple enough, right? In reality, this situation is much more complex. Let’s try to explain step by step so you can know everything about Overbooking by the end of this content.
Although widely used in the aviation sector, the term Overbooking is common in any industry where ticket sales and capacity limits exist, such as hotels, limited-capacity shows, and sporting events.
What are my rights in cases of overbooking?
According to ANAC, regulation nº 400 outlines the following regarding cases of overbooking on flights:
The company must seek volunteers who agree to take a later flight by offering benefits (money, extra tickets, miles, hotel stays, etc.), negotiated freely with the passenger. If the passenger accepts this benefit, the company may request the signing of a receipt, proving that the proposal was accepted.
Source: Gov.br (ANAC)
In other words, the company may ask one or several passengers to voluntarily change their flight to another flight with the airline, which can be on the same day but at a different time, or on days following the original. This, of course, will come with a financial proposal, which is often more advantageous for those passengers who are not in a hurry to reach their destination or who prefer to receive a sum of money or a voucher for accepting to have their flight changed.
Remember that if you accept the proposal to be rebooked on another flight and/or financial compensation (money or voucher), you will be waiving the rights related to Regulation nº 400.
If the passenger is traveling with family, all family members must be rebooked on the same flight or receive the same amount of compensation. Remember that this point is only valid for domestic flights.
Finally, if the passenger is close to finishing the trip and prefers to complete it by another means of transportation such as bus, car, van, or taxi, the costs must be paid by the airline. Remember to keep all receipts and invoices.
In addition to financial compensation, the company must provide the passenger who was denied boarding with options for reallocation, full reimbursement, or service provision through another form of transportation. Material assistance must also be provided if necessary.
How much is the compensation for Overbooking?
ANAC’s regulation imposes a value of 250 SDR (Special Drawing Rights) for domestic flights and 500 SDR for international flights. This payment (compensation) must be made immediately to the passenger affected by Overbooking.
| Destination | SDR (Special Drawing Rights) | Value in BRL |
|---|---|---|
| Domestic Flights | 250 | R$ 1.656,50 |
| International Flights | 500 | R$ 3.313,00 |
In Brazilian Reais, we are talking about R$ 1,656.50 and R$ 3,313 (250 x R$ 6.626 and 500 x R$ 6.626, respectively). This amount must be paid if the company cannot negotiate with the minimum necessary number of passengers. SDR is like a special kind of currency that is not used in daily life, like the real or the dollar. It is created by the International Monetary Fund (IMF) and is primarily used among countries and financial institutions to facilitate international transactions and help maintain global economic stability.
1 SDR = R$ 6.626. Updated in 05/2024
In addition to this compensation, depending on the situation, the passenger may also file a lawsuit against the airline, alleging moral damages. If your case fits this situation, contact Iklaim! We are here to help and enforce your rights as a consumer.
How to request compensation for Overbooking?
Once we are certain that we will be affected by Overbooking, it’s time to act. To request compensation for Overbooking, you need to follow some steps and have certain documents that prove what happened. Check below:
Keep all receipts
Boarding pass, airline announcements (audio), photos of the boarding gate, videos, invoices, and any other pertinent evidence.
Denial of Boarding Statement
It is extremely important to request the Denial of Boarding Statement (DPE) from the airline. This document proves that you were denied boarding and is a passenger’s right.
Talk to the airline
Still at the airport, it is important to speak with the company and seek solutions such as rescheduling or reimbursement before leaving.
If the airline does not fulfill its obligations, we suggest that the passenger contact lawyers or companies specialized in claims against airlines. Voo Meu's services will only be charged if you win the case. We are at your disposal!
If you couldn’t resolve the Overbooking issue directly with the company and believe your rights were violated and would like to speak with ANAC, you can contact ANAC by phone at 163 (free call, from 8 AM to 8 PM), or file a complaint through your login on the consumer portal or the gov.br app. If you choose this channel, the company will have up to 10 days to analyze and respond to your complaint.
Overbooking on International Flights
Depending on the region where your flight experiences Overbooking, you may be protected by specific laws that safeguard passenger rights in matters such as denial of boarding or Overbooking.
In cases of international Overbooking, but with the origin or destination being a Brazilian airport, the passenger can and should rely on the regulations of both regions. For example, a flight departing from São Paulo to Lisbon can file a compensation claim with both ANAC and the European Community.
Overbooking on Flights in Europe
In Europe, the law governing passengers' flight rights is Regulation (EC) 261/2004. In this regulation, you can find all the rights regarding flight cancellations, baggage issues, delayed flights, and, of course, Overbooking. This regulation is applied in virtually the entire European aviation system (including some countries that are not part of the EC). See the list:
Norway
Greece
Switzerland
Croatia
Iceland
Luxembourg
Hungary
Netherlands
Romania
Estonia
Bulgaria
Lithuania
Slovakia
Germany
Poland
Finland
Italy
Sweden
Latvia
Austria
France
Cyprus
Portugal
Denmark
Belgium
Spain
Slovenia
Malta
Ireland
CzechiaJust like in Brazil, if there are not enough volunteers and boarding is denied against the passenger’s will, the Regulation imposes the following IMMEDIATE rights to passengers:
Sufficient food and drink.
Two phone calls or access to the Internet/email.
Hotel accommodation if an overnight stay is necessary or if additional accommodation is required by the passenger.
Transportation between the airport and the accommodation location.
Rights to reimbursement or alternative transportation:
Reimbursement of the ticket price within the next 7 days. The reimbursement can be made in cash, bank transfer, check, or travel vouchers or other services (according to the passenger’s preferred option).
Alternative transportation to your final destination as soon as possible and under comparable transportation conditions. The passenger may choose to use third-party services if they believe it is the best option.
Alternative transportation on a later date that suits the passenger. If this option is chosen, the passenger will no longer be entitled to assistance from that moment on.
Right to Financial Compensation:
Perhaps the best news amidst all the confusion of being denied boarding or experiencing Overbooking: financial compensation. The stipulated amount, as we can imagine, is in Euros. The minimum amount, depending on the distance, is €250 and the maximum is €600. However, it is important to note that these amounts can be reduced by 50% if the airline offers an alternative form of transportation and meets the requirements regarding the arrival time at the final destination.
| Flight Distance | Compensation Amount | 50% Reduction if the alternative flight arrives within: |
|---|---|---|
| Flights up to 1,500 km | €250 | 2 hours (compensation of €125) |
| All intra-community flights (between European Community countries) and Flights between 1,500 and 3,500 km | €400 | 3 hours (compensation of €200) |
| Flights over 3,500 km | €600 | 4 hours (compensation of €300) |
Why do companies Overbook?
Firstly, because Overbooking is not illegal. Thus, the company can risk having to pay compensation to a few people, and likely, this minimal number of compensated passengers will be financially worthwhile for the company since it reached—and even exceeded—the sales limit.
All these strategies are meticulously planned before being executed, as depending on the sector, profit margins depend on a higher number of sales, making the risk sometimes worthwhile.
'No-show' is a term frequently used in the travel and reservation industry to refer to a person who made a reservation or appointment but did not show up or use the service without canceling or informing the company or service provider in advance.
In the case of flights with Overbooking, we can highlight 4 important points to understand why airlines Overbook:
| Reasons for Overbooking | Explanation |
|---|---|
| Revenue Optimization | Airlines face the challenge of dealing with customers who make reservations but don’t show up for the flight (so-called no-shows). By selling more reservations than the actual capacity of the aircraft, companies try to ensure that planes are as full as possible, thus maximizing revenue. |
| Profit Margins | The higher the sector’s competitiveness, the slimmer the profit margins. Therefore, Overbooking is a strategy to help balance these margins, reducing the revenue loss associated with empty seats. |
| Flexibility | Especially useful during peak times like holiday seasons, Overbooking provides airlines with the flexibility to accommodate passengers who wish to travel on specific flights, even when those flights are fully booked. |
| Operational Efficiency | Having planes with high occupancy helps improve operational efficiency by reducing the cost per available seat-kilometer*. This practice can lead to lower ticket prices and fees for passengers, making air travel more accessible. |
How to Avoid Overbooking?
As a passenger, even though you don’t have full control over whether Overbooking occurs or not—you must remember that this is decided by the airline company—there are some actions you can take to reduce the risk of being affected by Overbooking. And, for clarification, a flight can be overbooked and you might not be affected. To avoid Overbooking with your ticket, follow these instructions:
Arrive early at the boarding gate
Generally, those most affected by Overbooking are passengers who board the flight last.
Book in advance
Booking early increases your chances of securing a seat, especially during high-demand periods.
Communicate changes in advance
If you need to make changes to your reservation, do so as soon as possible. This way, you help the company organize the available spaces on the plane.
Loyalty programs
Often, when a passenger has an account in a partner program, they are given priority for class upgrades (not all planes/flights have this option).
Know your rights
Be aware of your rights as a passenger. In almost every country, passengers are entitled to compensation in case of involuntary denial of boarding.
Many people wonder if overbooking is a crime, and the answer is NO. Overbooking is a legal practice, although, on some occasions, it can negatively affect the passenger’s experience.