Airline pricing mistakes were once your gain, but not anymore

5/15/2015

Airlines make mistakes and passengers usually bear the brunt of it. Sometimes airlines make mistakes but passengers win – sort of. When an air fare is published and consumers start purchasing tickets at that price, what happens when the airlines says later that the fare was a slip-up? Regulators in the U.S. are preparing to lay out rules regarding "mistake" fares, but it requires them to stop enforcing current ones.

There are times when browbeaten airline passengers feel like they finally got one past the airlines. Recent incidents in which passengers were able to take advantage of erroneous fares published by the airlines have stirred up debate as to whether such fares are valid and should be honored. The U.S. Department of Transportation (DOT) had previously issued a ruling that prevented airlines from raising fares after a ticket was purchased by a traveler but before it was issued. In addition, passengers have been allowed up to 24 hours to change their minds after making a purchase. After several incidents in which some savvy (or lucky) shoppers happened upon some inaccurate airfares, the DOT is now taking a step back from enforcing the no-increase rule. It's not a matter of the airlines winning and passengers losing. It's more a matter of getting the rule right. Let's explain.

The DOT has been reviewing comments for a proposed rule change that would address mistaken fares. The issue is not as much about the occasional glitch that causes an unwitting shopper from snaring an amazingly cheap flight; but it's about travelers who force such "mistakes" by manipulating the purchase process to gain an advantage. A recent error by United Airlines caused a fare of US$50 to be published for some first class flights. The catch was that users would have to change their home country to Denmark to even see this error which was published in Danish Kroner. Some did, but United did not honor those tickets at those prices. Since the incidents took place outside of the United States, the DOT could not enforce its fare increase rules. However, because of the incidents of mistaken fares in the past and the possibility of user manipulation in the future, the agency decided to revisit the regulation by issuing a new rule proposal. In its own words, the DOT "expressed concern regarding how quickly mistaken fares are spread though postings on aviation and travel websites, forums, and blogs. The Department specifically solicited comment on how to address "bad faith" purchases of mistaken fares."

Until the final rule is in effect, the DOT will refrain from enforcing the no-fare-increase rule when mistaken fares are involved. According to the agency, it will not enforce the requirements under the previous rule as long as the seller of the ticket (airline, travel agent, online site) proves that the fare was a mistake and also reimburses all costs associated with the purchase of that fare. The DOT included other expenses such as hotel and tour costs as well as "reasonable, actual, and verifiable out-of-pocket expenses that were made in reliance upon the ticket purchase, in addition to refunding the purchase price of the ticket."