American Airlines did not properly compensate a group of travelers after bumping the passengers from their Miami to London Heathrow, according to a government report released on Wednesday.
The U.S. Department of Transportation assessed a $20,000 civil penalty against the Fort Worth-based carrier after the agency found American failed to pay 11 passengers the correct compensation for being denied boarding.
According to the investigation, the group had checked in and received boarding passes in Orlando and then flew from Orlando to Miami to make their connecting flight to London Heathrow. When the group tried to board their flight to London, the gate agents informed them that they were being rebooked as the flight was oversold.
The airline did not initially offer any compensation to the 11 travelers who then filed a complaint with the DOT. American subsequently offered $168 per ticket which it then increased to $848 after the government repeatedly questioned American about the compensation.
“We consider this violation to be egregious as it affected 11 passengers, American failed to offer any [denied boarding compensation] at all until receiving the complaint from the Enforcement Office, and only offered the correct amount of [denied boarding compensation] after repeated inquiries from the Enforcement Office,” the report said.
The DOT also found that American had a “problematic internal policy” from 2008 to 2015 regarding how it reported passengers who couldn’t board a flight because it was oversold. The airline was directing its gate agents to classify a passenger who was denied boarding as a volunteer even if the passenger had not been allowed to board the flight as long as the passenger initiated a conversation to receive compensation after the flight had left.
American told the DOT that it identified a statistically insignificant number of instances of misclassification and the DOT agreed to a compromise where the airline would cease the practice and would not face an additional civil penalty.
“We’re pleased to have reached a resolution with the Department of Transportation on this matter,” the airline said in a statement.