[Query Concerning Propriety of Paying Denied Boarding Compensation]

The Civil Aeronautics Board (CAB) requested an opinion as to whether Federal agencies are precluded by any statute or regulation from paying an airline more than the specified price of the seat when they make a mandatory space requisition. The CAB is questioning whether a passenger with confirmed reservations who has been "bumped" should be paid appropriate compensation under CAB "denied boarding compensation" rules. GAO does not know of any statute or rule which prohibits Federal agencies from paying more than the specified fare level when they make mandatory space requisitions that result in direct financial losses to the airline. GAO noted that Federal agencies are required to pay full cost for the seat and, in the event that a passenger has been bumped, this full cost is equivalent to the fare for the seat plus the amount that the airline is required to pay to the displaced passenger.