Q. Don't airlines have to compensate you if they cancel a flight?
— Virginia P.

A. Yes, Virginia, there is compensation clause, but let's proceed with caution for clarification.

Airlines are not required by law to compensate you for a delayed or cancelled flight. However, an airline is obliged to compensate you if your flight is oversold and you are involuntarily denied boarding, that is you check in on time and the plane leaves the gate without you.

In most cases and on most domestic carriers, the conditions or contract of carriage provides the following parameters for compensation:

• If booked on an alternate flight within an hour of your original flight, you receive no cash compensation. 
• If you are booked on a flight that gets you to your destination one to two hours later, you are entitled to a cash payment of $200.
• Over two hours, you are entitled to a cash payment of $400.
  
  Congress is working to up these figures.
  
  There are three exceptions where an airline is not obligated to provide denied boarding compensation:
• If the passenger is re-accommodated on another flight scheduled to arrive within one hour of the original flight
• If the passenger fails to comply with ticketing, check-in or reconfirmation procedures (such as arriving late to the gate).

If an aircraft of smaller capacity is substituted (for instance, going from a 767 to a 757).

You can find this information (along with other passenger-airline guidelines) in the airline's contract of carriage, which is usually found on the airline's Web site or printed on the rarely-seen-nowadays ticket jacket.

Here's an example of the conditions/contract of carriage as seen on American Airlines Web site.

Bumping can be voluntary and involuntary.

If you volunteer to give up your seat for a later flight, the airline rewards your patience and strong constitution for airport concessions with a travel voucher for future travel. You'll find that the value of the voucher is directly proportional to the difficulty the gate agent has in securing that needed seat for another passenger.

If no one volunteers, then you have the involuntary denied boarding situation mentioned at the beginning, and basically a very unpleasant scene at the gate. (Think Jerry Springer shot on location at the airport.)

How frequent are denied boardings on domestic carriers? The Department of Transportation's Air Travel Consumer Report keeps track of such things and posts the statistics by airline.

Between April and June 2007, there were 192,678 voluntary denied boardings and 18,428 involuntary denied boardings out of 150,536,464 total passengers. While that is only about 1.22 involuntary denied boardings per 10,000 passengers, it's one too many if it's you watching the plane push back.