It is a common practice amongst airlines to overbook their flights. They often sell more tickets than there are seats on the plane and if they do not find enough volunteers to surrender their reservations they may deny boarding to passengers against their will.
Similarly, airlines sometimes use a smaller aircraft, especially if there have not been enough bookings on the flight, to keep it profitable. In this case, some passengers may be placed on other flights.
A compensation for overbooking is due to the passenger who was denied boarding against his or her will when he or she had checked in on time, the travel documents were complete and there was no security or health risk to the flight or other passengers.
If you were denied boarding against your will due to an overbooking of your flight, you may be entitled to compensation between €250 and €600. Note that the price of the ticket for the initial flight does not affect the amount of compensation.
According to the European Passenger Rights Regulation, you can claim compensation even if you have booked your ticket with a low-cost airline. If you suffered a denial of boarding due to an overbooking as a business traveler you are entitled to the compensation, and not your employer.
Passengers who travelled on package holidays are also able to claim. For your claim to be eligible the flight must depart within the EU or, if it lands in the EU the airline must have its headquarters in the EU. It is possible to claim on flights as far back as 6 years.
If the airline is responsible for denied boarding, air passengers are entitled to claim compensation for overbooking, the amount of which depends on the distance of the flight: