Flight delayed? This firm wants to get you paid

Who among us has suffered an airline delay or cancellation, or even been bumped from a flight? Plenty.

Who’s been compensated for the inconvenience? Probably not very many.

One Berlin-based firm, AirHelp, is trying to rectify that, educating flyers around the world of their rights to compensation — and, for a fee, helping them secure it.

What rights? U.S. air passengers could be forgiven for asking.

Indeed, if you’re flying domestic in the States, airlines aren’t legally required to do anything for you if your flight is delayed or cancelled. If your flight is overbooked, your carrier might or might not compensate you, depending on circumstances.

“If you compare the level of rights you have as a passenger flying domestic in the U.S., it’s quite low compared to Canada, the European Union or even South America,” said Christian Nielsen, chief legal officer at AirHelp.

Paul Hudson, president of Sarasota, Florida-based passenger advocacy group FlyersRights.org, agreed. “The U.S. is a black hole,” he said, compared to other nations in terms of airline customer rights. “The only way you get compensation for domestic delays is if you’re bumped.

More from Personal Finance:
This app eases clearing U.S. customs, immigration
How to pick the best travel rewards credit card
The world’s best, and worst, attractions for value

“Everything else is pretty much up to the airlines,” Hudson said.

There are cases when American air passengers are, in fact, covered. That’s when they either board a foreign carrier, particularly one based in the E.U. or Canada, or fly any airline out of those jurisdictions, which offer greater protections than the U.S.

That’s where AirHelp can come to their aid.

The firm, founded in 2013 by former CEO Henrik Miller and two other business travelers when they were grounded in Asia without recompense, lets travelers search flights at its Airhelp.com website by departure date, origin and destination, and flight number to determine claim eligibility. If affected passengers are entitled to some form of compensation, AirHelp will offer to argue their case. If an award is won, the firm takes 35% as a service fee.

To date, AirHelp said it has aided more than 16 million travelers in 35 countries win compensation from airlines. Last year, 343,000 passengers from the U.S. were eligible for compensation under the E.U.’s Flight Compensation Regulation, also known as EC 261, although most weren’t aware of it, said Nielsen.

“It’s surprisingly many,” he said, noting that a recent AirHelp/YouGov survey found that even in the E.U., which has the strongest and oldest passenger rights regulations, less than half of travelers were aware of possible compensation by airlines.

“And even those who know they have rights don’t necessarily file for compensation because they think it’s too difficult or they think the airlines will try to give them some BS answer,” Nielsen said. “It’s even lower for U.S. passengers.” The same survey found that only 2 in 10 U.S. travelers know their rights.

EC 261, enacted back in 2004, entitles all passengers flying an E.U.-based airline or departing an E.U. airport to compensation of up to $700 for delays of more than 2 hours, cancellations or denied boarding due to overbooking.

That includes U.S. residents boarding an E.U. airline or flying any carrier from an E.U. airport. “It doesn’t matter who you are or where you live, it only matters where you’re flying,” said Nielsen.

Here’s how it works: If you’re flying a U.S. carrier to Europe, you’re not covered by EC 261, but if you’re flying that airline back to the States from Europe, you are. Fly an E.U.-based airline anywhere, including on a codeshare flight ticketed by a U.S. carrier, and you’re eligible. “What matters is which airline is operating the flight, not who sold it,” said Nielsen.

What if you’re flying internationally but not bound for Europe? Not to fear, said Nielsen. “If you’re flying out of the U.S., it’s actually difficult not to be covered by rights,” he said. “Canada just passed its own act on passenger rights very similar to the [rules] in the E.U.: a three-hour delay and you’re entitled to compensation.

“If you fly south to Mexico, Brazil or Argentina, they also have air passenger rights for delays and cancellations.”

According to Canadian Transportation Agency regulations enacted last December, passengers are entitled to — among other rights — $125 to $1,000 in Canadian dollars (about $94-$754 U.S.) for flight disruptions, depending on the length of delay and airline size, and anywhere from $900 to $2,400 Canadian ($679-$1,811 U.S.) for denied boarding. (There have been recent hiccups in the new claims-settling process, however, according to Canadian national broadcaster CBC News.)

For its part, Mexico enacted a host of new passenger rights in 2017, including reimbursement of full fare, plus 25%, or rebooking on the first available flight, with overnight accommodation and meals if necessary, for cancellations or delays of more than four hours.

The U.S. Department of Transportation’s page on air passenger consumer protections can be found at transportation.gov/airconsumer. Under American law, passengers on U.S. carrier flights might receive compensation if denied boarding due to overbooking, unless:

• There is an aircraft change;
• It is a matter of weight or balance, on a plane with fewer than 60 seats;
• They’re on a plane with fewer than 30 seats;
• They’re on a charter flight;
• They’re departing a foreign airport.

If a U.S. carrier downgrades a passenger to a lower class, the passenger is entitled to the difference in fare. Passengers are entitled to compensation for bumping if they are not disqualified for one of the above reasons, have a confirmed reservation, checked in on time, arrived at departure gate on time and the carrier cannot get them to their destination within one hour of their original flight’s arrival time.

After a widely publicized 2017 incident in which a passenger was dragged off an overbooked United Airlines flight, major U.S. carriers now offer hundreds to thousands of dollars in flight credits or cash to volunteers who willingly give up their seats when on oversold flights. Delta Air Lines, for example, will pay as much as $9,950, depending on circumstances.

(AirHelp advises the estimated 169 million U.S. passengers affected by flight disruptions to hang on to all trip documentation for pursuing claims, which remain valid for filing for three years after trip completion.)

The lack of broader domestic passenger rights might be coloring how U.S. carriers apply E.U.-mandated compensation law to their passengers.

According to a 2019 AirHelp investigation, rejected 40% of claims for covered international flight disruptions, while Delta and American Airlines both rejected 27%. United and Delta did not reply to requests from CNBC for comment. An American Airlines spokesperson said “we thoroughly evaluate all claims filed.”

The majority of U.S. passengers give up on pursuing compensation after an initial claim is rejected, according to AirHelp. In 2019, such denials were up 30% over the year before worldwide. Carriers use “smoke and mirrors to trick customers and avoid their legal responsibility,” AirHelp air passenger rights expert Johnny Quach said.

That includes keeping passengers in the dark about existing protections around flight delays, said Hudson of FlyersRights.com. He cited Article 19 of the Montreal Convention 1999, or MC 99, described by the International Air Transport Association as “a single, universal treaty to govern airline liability around the world.”

MC 99, ratified by the U.S. in 2003, provides up to $6,000 in compensation for many delays on international trips, according to Hudson, even if one leg is in the States, “but nobody knows about it because the airlines won’t tell you.”

“We’re actually suing the DOT now to require there be plain language notification of that,” he said. “It’s been in effect since 2003 but it’s been hidden by both the government and the airlines.”

Don’t look for air passenger rights to be expanded beyond overbooking compensation in the U.S. anytime soon, said Hudson.

“I don’t see that happening, politically, right now,” he said. “We’re into getting rid of regulations, and there’s been no regulation of any consequence enacted since 2017.”

Industry pushback on passenger compensation is not limited to the U.S. Airline industry organizations in Europe, such as the 16-member Airlines for Europe trade association, have called for a tightening of generous E.U. air passenger rights guaranteed under laws such as EC 261.