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Compensation for denied boarding US to Europe--any experts out there?

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A flight delay nightmare has happened to family members traveling with an infant and toddler! Twelve hours at the home airport (six hours in the airport for two days in a row), and still no departure. And, all check-ins were done with plenty of advance time. They had purchased three tickets and also had a lap baby with them who they had paid for.

We are trying to help them figure out how much compensation to ask for. Reading the contract of carriage and flight regulations, this is a grey area rather than a clear-cut one, so I hope some of you can assist quickly. And,we're trying to figure out if US or European (or both) regulations apply.

Here is the scenario:

Yesterday they had a US to Europe flight on a United/SAS combo ticket. The United flight originated at A, with a connection in Dulles for a SAS transatlantic flight to C, and from C there was a final SAS intra-European flight from C to D. The FAA closed the airspace at the Dulles temporarily because the president was flying out, so United stopped boarding the plane at A because they did not have clearance to leave for Dulles. By the time the flight could leave from A, it was too late to make the connecting flight at Dulles. Half of the people leaving from A to Dulles thus missed their connections and were given the choice of remaining in A or going on to Dulles to sit there indefinitely. The airline said they could not find three seats on any transatlantic flight anywhere yesterday, so the family stayed at A their home airport. United rebooked them for today on a different combination of flights.

Today they once again arrived early for check-in. They were to travel on United from point A to Newark, Newark to Frankfurt, and have a final intra-European leg out of Frankfurt on Lufthansa. When booking these substitute flights for them yesterday United apparently messed up because they had not issued a paper ticket for the lap baby; this was not noticed until the check-in counter. Issuing a paper ticket required a supervisor's override, and the United supervisor did not arrive in time for them to be able to board at the point of origination.

So, today they again went home with a promise of correctly booked tickets for tomorrow.

Thus they will be losing two days of their vacation and be arriving 48 hours later than the tickets they had originally booked.

What rules for monetary compensation apply in a situation like this? I hope some of you know because we are trying to sort them out. We know that there is $1300 per person for being denied boarding due to over-booking. But, this was error and incompetence today rather than overbooking. We suspect the airline will claim yesterday was more of a force majeure issue. How do the EU regulations apply in a situation like this? Yesterday's transatlantic flight was on a European carrier. Today's intra-Europe flight was on a European carrier.

Thanks for any concrete, specific information any of you can give. I am also going to post this in the airllines forum hoping for some insights there too.

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