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Denied Boarding on DL-issued Saudia award ticket?

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Hey there checking for help/advice. Friend has a confirmed (seats/meals chosen) Delta skymiles award booking on Saudi Arabian Airlines BOM-JED-IAD. Standing at the check-in counter at 01AM, Saudia agent said he will likely be denied boarding because "we have to prioritize cash bookings when we are oversold". He was not allowed to check in and give his bags yet.
He's on hold with Delta, but they can't do anything they say.
Does he have any rights as a US-bound passenger or is this under the India/Saudi Arabian DOT rules?
Thanks.

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