It isn't a flat $200 gift card. Federal law sets an exact formula — and once you know it, you can calculate what you're actually owed before the gate agent even opens their mouth.
The Myth
"Airlines pay a fixed flat fee — usually around $200 or $300 — whenever they bump you from an overbooked flight."
This assumption is common because gate agents often lead with a low opening offer, and most passengers have never seen the actual regulation that governs what they're owed.
The Reality
For a general overview of your rights when a flight is overbooked — including how to spot the low-value voucher trap and the step-by-step escalation process — see our companion guide on claiming your cash under the law. This article goes one level deeper: the exact federal formula behind the numbers, so you can calculate your own entitlement before you're standing at the gate.
The U.S. Department of Transportation mandates strict, tiered compensation under 14 CFR Part 250 for passengers who are involuntarily denied boarding. Your payout depends on two things only: your one-way fare, and how late the airline's replacement transportation gets you to your final destination.
The Hard Data: Official DOT Compensation Tiers
These are the current liability limit amounts in effect under 14 CFR § 250.5, following the Department's periodic inflation adjustment that took effect January 22, 2025:
Domestic U.S. Flights
| Arrival Delay (vs. original flight) | Compensation |
|---|---|
| 0 to 1 hour | No compensation required |
| 1 to 2 hours | 200% of one-way fare, capped at $1,075 |
| Over 2 hours | 400% of one-way fare, capped at $2,150 |
International Flights Departing the U.S.
| Arrival Delay (vs. original flight) | Compensation |
|---|---|
| 0 to 1 hour | No compensation required |
| 1 to 4 hours | 200% of one-way fare, capped at $1,075 |
| Over 4 hours | 400% of one-way fare, capped at $2,150 |
Note on frequent flyer award tickets: if you booked using points or miles and your ticket shows no cash fare, your compensation is instead calculated based on the lowest cash price sold for a seat in the same class of service on that same flight — not zero, and not an arbitrary figure the airline picks.
These dollar caps aren't fixed forever — 14 CFR § 250.5(e) requires the DOT to review and adjust them every two years using a Consumer Price Index formula. The current $1,075/$2,150 figures replaced the prior $775/$1,550 caps as of January 22, 2025, and will be adjusted again on the same two-year cycle, so it's worth checking the current figures if you're reading this well after publication.
Worked Examples: Calculating a Real Payout
Example 1: Domestic Delay Under Two Hours
The scenario: Your one-way ticket from New York to Miami cost $300. You're bumped due to overbooking, and the airline's replacement flight lands 1 hour and 45 minutes later than your original scheduled arrival.
The calculation: This falls in the "1 to 2 hours" tier, so you're owed 200% of your $300 fare.
The result: 200% of $300 is $600 — well under the $1,075 cap, so you're owed the full $600 in cash or by check, not a voucher.
Example 2: Long International Delay Hitting the Cap
The scenario: Your one-way international ticket to Europe cost $800. You're bumped, and the replacement flight lands 6 hours after your original scheduled arrival — well into the "over 4 hours" international tier.
The calculation: 400% of your $800 fare would be $3,200. But the federal cap applies here.
The result: The airline owes you the maximum legal limit of $2,150 — not the full $3,200 the percentage formula would otherwise produce.
What to Check Before You Accept Any Payout
The two examples above show why it's worth doing your own math rather than accepting whatever figure the gate agent states out loud. Before you sign anything or accept a payment, verify these three things:
- Confirm your final arrival time, not your departure delay. The compensation tier is based entirely on how late you land at your ultimate destination compared to your original itinerary — a flight that departs 4 hours late but somehow still lands close to on schedule doesn't trigger the higher tier, and vice versa.
- Confirm the percentage is applied to your full fare, including taxes and mandatory carrier fees — not just the base ticket price before fees were added.
- Confirm accepting the payment doesn't waive your right to separate reimbursement for any hotel, meal, or transport expenses you incurred during the delay — those are a distinct entitlement from the cash compensation described here.
For the general step-by-step process of what to do at the gate, how to avoid signing away your rights, and how to escalate if the airline refuses to pay — see our full guide to claiming your compensation under the law. And if the airline failed to provide meals or a hotel while you waited, that reimbursement is separate from, and in addition to, everything calculated above.
Related Kibbo Tools
- Generate a Flight Disruption Compensation Letter →
- Flight Disruption Expense Tracker (Template) →
- Flight Disruption Communication Log (Template) →
Sources
- 14 CFR Part 250 (Oversales), current text via the Electronic Code of Federal Regulations. ecfr.gov
- Federal Register — Periodic Revisions to Denied Boarding Compensation and Domestic Baggage Liability Limits, 89 FR 84815, effective January 22, 2025. federalregister.gov
- U.S. DOT — Fly Rights: official consumer guide to air passenger rights.