Much has been written in the past few months about something called Rule 240. Some pundits, such as Joe Brancatelli, writing on Portfolio.com, claim it’s an “urban travel legend” and no longer exists. Others, such as Today Show travel guru Peter Greenberg, insist that it is real.
What is Rule 240? Well, back in the days when airlines were regulated by a government agency, they all had to abide by some sensible rules to protect passengers in case of, among other things, a cancellation or misconnection that was within the airline’s control. These rules were incorporated in the airlines’ contracts of carriage. Post-deregulation, these rules no longer had to be followed, but some airlines, whether formed after or before deregulation, perhaps because they were too lazy to completely rewrite their contracts, kept the same rules. Airlines formed after deregulation typically didn’t incorporate these rules into their contracts, and some have done away with them.
Anyway, Rule 240 originally stated that in the event of a cancellation or flight misconnection, the airline would have to put you on their next flight out, or, if that wasn’t “acceptable,” on the next flight out of a competing airline if that flight would get you to your destination sooner, all at no additional cost to you. If only first class was available on the other airline, then they had to upgrade you. This only applied in circumstances under the airlines’ control, such as crew failing to show up, or mechanical problems.
So does Rule 240, or something like it, still exist? Well, we searched the contracts of carriage for a bunch of big and smaller airlines to find out, and near as we can see, several airlines, such as Northwest, still have something they call Rule 240, and others, such as Delta, Southwest, and Virgin America, have more vague language saying that they will put you on another airline at their “sole discretion” or that they “may substitute alternate carriers.” And some airlines don’t call it Rule 240 at all, instead using a numbering system of their own invention.
Keep in mind that airlines can change their contracts at any time, and several of the larger ones have done so in recent months. And sometimes there isn’t a flight on another airline that will get you there sooner, especially if you’re traveling from or through a so-called “fortress hub,” such as Minneapolis, which is a Northwest Airlines stronghold, or there may be no seats available on the other airline’s next flight. Also, if you're traveling on a "bulk," "consolidator," or other unpublished airfare, then all bets are off.
To address the skeptics, in the chart below we’ve done our best to interpret the airlines’ policies, and have excerpted the actual language from their current (as of July 2008) contracts of carriage, which, although we're travel journalists not lawyers, we assume are legally binding documents. Below the chart, we’ve also provided links to the contracts on the airlines’ Web sites so you can see for yourself.
We've noted whether, near as we can tell, the airline will put you in first class on its own (or another carrier's) next flight out.
Have you successfuly negotiated with an airline to be put on another carrier when your flight was severely delayed or cancelled, or you missed your connection? Please leave a comment.
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Rule 240 (or something like it) by airline

Links to contracts of carriage
AirTran
Alaska
American
Continental
Delta
Frontier
Hawaiian
Jetblue
Northwest
Southwest
United
US Airways
Virgin America
And if you're traveling within or from any member country of the European Union, you're protected by an additional set of rights that are even stronger than those in the airlines' domestic contracts of carriage or those issued by the US government:
See: Passenger Rights in the European Union.
Read our other useful charts
In case you missed them, these consumer-oriented charts have a lot of useful information:
The flexible search chart
The ship your luggage by UPS or FedEx ground chart
(very useful comments from readers)
The don't buy insurance from your airline chart
The cash back credit card chart
The frequent flyer fee chart
The constantly updated airline baggage fee chart
and The "other" airline fee chart