The airline assumes that a certain number will not turn up. It seems that at holiday times, they do not appear to adjust for the greater liklihood that people will travel. (Leisure travellers are more likely to turn up than businessmen). They are supposed to assist you to get to your destination, if necessary booking you onto other carriers. Delta totally failed to meet their obligations in your case. I strongly urge you to copy your letter to the DOT. If they did not make you aware of your rights to compensation, they also further breached the rules. I think you have a very strong case for full re-imbursement of your additional costs and if you did not receive $800 per person, and were not made aware of your rights, you have a legal case against them.
There are Delta employees who come on here regularly to respond to passengers. Lets see if they are willing to come on now and explain your rights and their conduct. It is utterly indefensible.
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