Rules set down by the US Department of Transportation (DOT) allow for airline customers to receive up to $1300 if they voluntarily give up their seats, but the world's largest airline has been bumping people off their flights by force.
The DOT has now publicly reprimanded the airline for the second time in four years, and ordered the company to pay a penalty of $750,000 for not compensating passengers.
This time around, Delta managed to negotiate with federal regulators and $425,000 of the fine will go back to the airline in order for it to buy tablet devices such as iPads to record what happens when a flight is oversold and the hunt for volunteers begins.
Overbooking is not illegal, and most US airlines overbook their scheduled flights to a certain extent in order to compensate for 'no-shows.'
Passengers are sometimes left behind or 'bumped' as a result.
When an over-sale occurs, the DOT requires airlines to ask people who aren't in a hurry to give up their seats voluntarily, in exchange for compensation.
Those passengers bumped against their will are, with a few exceptions are entitled to compensation.
The DOT said in some cases, Delta bumped passengers but did not inform them they had a right to cash as compensation and classified some passengers as 'bumped involuntarily' as people who had actually agreed to give up their seats.
The airline was caught out when an agency inspector visited Delta’s Atlanta headquarters and discovered evidence that the airline was not following the passenger-bumping rules.
The department had previously fined Delta $375,000 in July 2009 over similar bumping violations.
'Airline passengers deserve to be treated fairly, especially if they are forced to miss a flight because an airline oversold seats,' said US Transportation Secretary Ray LaHood.
'Consumers have rights, and we will continue to take enforcement action when airlines violate our rules to protect the traveling public.'
When an airline oversells a flight, DOT regulations require the airline to seek volunteers willing to give up their seats for compensation.
If there are not a sufficient number of volunteers, the airline then bumps passengers involuntarily.
Passengers are entitled to a written statement describing their rights and explaining how the airline decides whom it will bump first.
In most cases, passengers bumped involuntarily also are entitled to cash compensation of up to $1,300 depending on the value of their tickets and the length of time that passengers are delayed.
In addition, the larger US airlines must file quarterly reports with DOT on the number of passengers who were bumped involuntarily from oversold flights as well as those who agreed voluntarily to give up their seats.
In March 2012, the Department’s Aviation Enforcement Office found that in a number of instances, Delta failed to seek volunteers before bumping passengers involuntarily, or bumped passengers involuntarily without providing them a written notice describing their rights or informing them that they had a right to cash compensation.
In addition, Delta classified some passengers who were bumped involuntarily as having volunteered to give up their seats, which both violated the passengers’ rights to compensation and resulted in inaccurate bumping reports filed with the DOT.
More than 55 per cent of the $725k fine will be spent by Delta to purchase tablet devices such as iPads to help train its staff. The airline has stated that this is something they were already intending to do.
It's the first time a fine imposed by the DOT has allowed an airline to put the money towards tablets to help comply with the rules, although it is not clear how such devices will prevent similar occurrences from happening in the future.
The D.O.T. say the data collected will be used to help correct any problems the airline may have in complying with the bumping rules.
Delta has been spending heavily in recent years to upgrade its mobile and online tools to help passengers check in and manage travel itineraries.