Company Turns Flight Delays into Cash for Passengers

By Stephania Jimenez
|  Wednesday, Mar 12, 2014  |  Updated 11:43 PM EDT
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Having to wait hours for a delayed flight that sometimes ends up getting canceled has become an expected event for many passengers.  But what if you could make money off of all that time spent waiting at the gate?

Having to wait hours for a delayed flight that sometimes ends up getting canceled has become an expected event for many passengers. But what if you could make money off of all that time spent waiting at the gate?

It's that dreaded time wasted in your car as you get stuck, yet again, in the morning rush hour gridlock. Many people expect delays while trying to get from Point A to Point B, and that's not limited to the road.

In fact, having to wait hours for a delayed flight that sometimes ends up getting canceled has become an expected event for some.

But what if you could make money off of all that time spent waiting at the gate?

A Silicon Valley start-up, Air Help, is trying to help make that happen by simplifying the process to claim compensation from airlines if a delay, cancellation or involuntary bumping meet certain requirements.

Henrik Zillmer said he decided to do some research when he was waiting for a delayed flight.

"The law was kind of complicated at first, but when you dig down you find out what you're entitled to," Zillmer said. "But I immediately could understand why so few people actually knew what they were entitled to because you'd actually have to spend hours reading this."

The U.S. Department of Transportation and the European Union are the two groups that oversee the guidelines for what airlines owe passengers in certain circumstances.

For Americans flying in and/or out of Europe, compensation could go up to $800.

Passengers who wait up to four hours before their flights are canceled are entitled to $400. If they wait longer than four hours, the figure doubles to $800.

That's the same amount someone may be entitled to if they wait for a delayed aircraft for more than three hours or if they've been involuntarily bumped from a flight.

For domestic flights, if a passenger is involuntarily bumped from a flight and has to wait up to two hours, s/he is entitled to double the price of the one-way fare up to $650. If that wait time lasts more than two hours, the airline owes four times the ticket price, up to $1,300.

"Two percent of all flights are eligible, so about 26 million passengers, just if you take Europe and the U.S., are eligible for compensation. Less than 1 percent are actually claiming this compensation," Zillmer added.

Zillmer described his compensation claim process as spending hours working through a maze of links on airline websites, more time filling out the forms and fielding calls with representatives.

Eight weeks later, he said the airline rejected his claim. However, after an appeal and a total of three months, he received an $800 check.

Zillmer and two friends decided to start a company dedicated to turning travel nightmare stories into hundreds of dollars for each passenger. The three founded Air Help, which offers a website and a mobile app to help simplify the compensation claim process in exchange for 25 percent of the check.

Connie Lee, a satisfied customer from Berkeley, described the feeling of helplessness when her Scandinavian Airlines flight from Copenhagen, Denmark to San Francisco in February was suddenly canceled.

"They couldn't care less. It's not them," Lee said. "I was kind of panicked but I was trying not to be because I was like, I don't know what to do, but [there was] no sympathy, no nothing."

Lee said the airline offered her a voucher for one night's hotel stay because the next flight wasn't until the following morning. Trine Kromann-Mikkelsen, an SAS spokesperson, said employees' duties include handing out folders of information when there is a cancellation.

"Obviously, it is not always easy to get hold of everyone – depending on the situation – and it can slip in a busy situation, but we keep reinforcing it with our employees," Kromann-Mikkelsen wrote in an email. "The specific flight – I cannot tell you whether the information was given. It should have been."

Air Help said there's not enough consistency, although there is movement in the right direction.

"There's a trend toward strengthening of passenger rights all over the world, so the U.S. implemented these bumping laws two to three years ago," said Nicolas Michaelsen, co-founder and Chief Managing Officer. "The EU just had a vote on strengthening the passenger rights in the EU even further. China is talking about implementing similar laws, so we're seeing a global trend of much better consumer rights protection."

Greg Roodt, co-founder and Chief Technology Officer, said the lack of knowledge about the possible compensation is rampant.

"It's really awareness that's the biggest problem," Roodt said. "I've traveled quite a lot and my friends didn't know. Most people I asked didn't know, and that's the biggest challenge we've got right now."

NBC followed along when the team went to San Francisco International Airport to inform passengers about their right to compensation.

"It's a mixture between surprise and anger because they're like, why weren't we informed of this?" Michaelsen said.

Air Help said the lower-budget airlines are the worst offenders.

"They tend to not inform their passengers and they also tend to reject claims for compensation," Zillmer said. "So, in those cases, we have had to take legal actions against some of these airlines. Funny enough, when they get the first subpoena, they also start paying out the compensation, but we have to go to that extent before they follow the law."

But airlines said they follow the law as outlined by the USDOT and EU. Southwest and JetBlue representatives both said they compensate passengers, but would not share statistics on how often that happens. Virgin Atlantic would only say the company meets all the requirements laid out by the EU.

As for major carriers, United Airlines indicated that, of its more than 76 million passengers in 2013, only one in 10,000 per day was involuntarily bumped, or a rate of 0.01 percent. A spokesman added that the airline has a perfect track record of giving compensation to passengers every single time.

These laws only apply for carrier-caused problems and not to other situations like extreme weather. Air Help launched in Europe a year ago where the company said it has helped roughly 15,000 people. The U.S. website, www.getairhelp.com, has also been launched.

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