Most airlines oversell tickets since the majority of times, not all passengers will show up for their flight. However, in the case that everyone does show up for his or her flight, the airline will ask if anyone would like to volunteer to give up his or her seat and offer them compensation. Under federal regulations, a passenger who gives up his or her seat on a flight is entitled to cash compensation of up to $1,350, but some have gone up to $10,000.
If nobody wants to sacrifice his or her flight voluntarily, then the airline has the right to choose who gets the boot involuntarily. Moreover, those who are bumped involuntarily will receive higher compensation than voluntary takers.
However, as of May 2017, Southwest Airlines no longer overbook flights, but there are times when passengers may be asked to voluntarily give up his or her seat or have to be removed involuntarily for which they will be compensated.
If a flight is oversold, Southwest will ask for volunteers for denied boarding in accordance with 14 CFR § 250.2b before using any other boarding priority. A "volunteer" is someone, with a ticket, who responds to the airline's request for people who willingly accept its offer of compensation, in exchange for giving up his or her confirmed reserved space. A passenger who is denied boarding without consent is considered to be involuntarily denied boarding, even if he or she accepts compensation.
Southwest Airlines will pay compensation on the same day and at the same place where denied boarding occurs, unless it arranges, another means of transportation that will depart before payment can be made. In which case, payment will be mailed within 24 hours of the time, denied boarding occurs. Compensation will be provided to the passenger as a draft payable to him or her. If the passenger consents, Southwest may offer credit for future travel. The passenger can refuse to receive compensation in travel credit and insist on only receiving compensation by draft. Once the passenger accepts compensation from the carrier, it relieves Southwest from any further liability.
In the case of being involuntarily denied boarding for an oversale in accordance with 14 CFR Part 250(c) compensation will be 200% of the passenger's destination fare, with a maximum of $675. If the Carrier offers an alternate transportation route to the passenger that is made at the arrangement time and will arrive at the same airport as the passenger's first stopover, or the airport of his or her final destination over one but less than two hours after the original arrival time of a domestic flight itinerary and over one but less than four hours after the original arrival time of his or her international flight itinerary, then compensation will be 400% of the passengers fare, with a maximum of $1,350. If you have any questions, click here to contact a representative.