New compensation standards for what Airlines must pay to "Bumped" passengers $650 & $1300

Starting 8/23/11 the Federal DOT has updated its laws regarding compensation an airline must give to a traveler if they are involuntarily "bumped"(not allowed to take a flight in which you have a reserved spot for) from a flight. (Previous laws regarding compensation)

Bumping often occurs because planes typically are overbooked.  Typically you will receive either cash or travel vouchers if you are “bumped”

1.  If you are "bumped" and have a substitute flight arranged which is less then 1 hr from your previous flights arrival time then you will receive no compensation.

2.  If you are “bumped” and have a substitute flight arranged which is 1 to 2 hrs from your previous flights arrival time then you will receive double the cost of a one way ticket or up to $650

3.  If you are “bumped” and have a substituee flight arranged which is 2hrs longer then your previous flights arrival time then you will receive 4x the cost of a one way ticket or up to $1300.

For more info regarding the Federal Department of Transportation rules on “bumping” 

For those with flexibile schedules voluntary “bumping” is a common practice where a traveler gives up a confirmed reservation in a overbooked flight for a negotiated compensation. For tips check out this article.