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Could this get any worse for everyone involved? With a HT to Lucky the DOT has now made a mess for everyone (see PDF linked). This really is bad for those who purchase tickets but even, in many ways, much worse for the airlines for the time being.
First off my take. I have no problem with mistake fares. The airlines should have the best IT on the planet but don’t (all you have to do is look at the utterly and completely broken Delta award calendar for a shining example). So, they should have the safeguards in place to prevent mistake fares from ever happening.
The next issue is that often airlines publish an “attack” fare on another airline that is a VERY low price to compete against a route or to protect a route they fly. This DOT ruling gives a strange “out” and now presents the right to do “whatever” even whey they intentionally publish a low fare (or that is how I see it anyway).
What a complete and total mess this is.
Beyond all this, notice the worst part of all of this for the airlines themselves (and I am beyond happy they are going to get stuck with this part):
As a matter of prosecutorial discretion, the Enforcement Office will not enforce the requirement of section 399.88 with regard to mistaken fares occurring on or after the date of this notice so long as the airline or seller of air transportation: (1) demonstrates that the fare was a mistaken fare4; and (2) reimburses all consumers who purchased a mistaken fare ticket for any 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. These expenses include, but are not limited to, non-refundable hotel reservations, destination tour packages or activities, cancellation fees for non-refundable connecting air travel and visa or other international travel fees. The airline may ask the consumer requesting out-of-pocket expenses to provide evidence (i.e. receipts or proof of cancellations) of actual costs incurred by the consumer. In essence, the airline or seller of air transportation is required to make the consumer “whole” by restoring the consumer to the position he or she was in prior to the purchase of the mistaken fare. The enforcement policy outlined in this notice is temporary and will remain in effect only until the Department issues a final rule that specifically addresses mistaken fares. If, based on comments received in the rulemaking process, the Department determines that section 399.88 should remain as written, airlines and other sellers of air transportation would be expected to comply and the Enforcement Office would enforce the requirement. – BOLD MINE
So are we clear on this? Say you book a Delta mistake fare to Europe. You then, as soon as you get a PNR or confirmation of the ticket, book a cruise or something else that is non-refundable, and the airline then cancels your ticket so you can’t go (saving them who knows how much), they must then repay you maybe THOUSANDS of dollars for the cruise, hotels or whatever you booked due to the mistake fare you thought you were going to fly. Joy?
Again, be careful what you wish for airlines, you make get more than you bargained for. What a complete disaster for everyone.
On the plus side think of the thousands of posts my fellow BA blogger Chris Elliott will get from this when Delta, and all the other airlines worldwide, refuse to follow up and pay out what they must per this ruling. Ugg, what a complete mess.
We already have American publicly stating points, both redeemable and elite, will be whatever they say with a mistake fare. That is their right as frequent flyer points are totally airline “funny money”. But now, we are talking REAL cash here folks.
I think this is, for now, going to result in MORE mistake fares approved by the airlines. Giving a cheap seat to a few flyers, to me, will never be worth the complete and utter mess canceling and having to follow up and pay out money to make flyers “whole” again.
So you tell me – what do you think of the utter and complete mess we have on our hands? – René
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If you were in charge what would you have as the policy that is fair to both.
The way it is written seems perfectly fair to everyone. Now implementation and adherence to the policy is another matter.
@DSF – I hear you but to me this makes it WORSE for the airlines. They could be on the hook for who-knows-how-much rather than just their product. Ugg.
I don’t see how this puts a consumer who purchased the mistaken fare in worse position. If anything, it’s actually better. Under this temporary prosecutorial discretion memo the airline now has a choice to either cancel the ticket and and make the consumer whole by reimbursing any non-refundable expenses incurred after purchase, or to honor the ticket. At the end of the day this becomes a financial decision for the airline.
For example, assume the mistaken fare was $100 when it should have been $1100. The airline now essentially has a choice of honoring the $100 fare and eating the $1000 difference or, if the consumer can establish that he or she has incurred non-refundable expenses, canceling the ticket and paying those expenses. It really becomes a mathematical equation for the airline. If the consumer incurred non-refundable costs in excess of the $1000 difference (or the true cost of providing air transportation as some seats are sold at a loss) then it probably makes more sense for the airline to simply honor the mistaken fare.
It’s also important to remember that when an airline sends out notice that it’s canceling your ticket because it made a mistake not every consumer will fight it. Some will accept that it was a mistake and get nothing, others perhaps a voucher in a lesser amount towards a future flight. The memo just says that DOT will not prosecute the complaints for the time being so long as the non-refundable expenses are reimbursed. It does not say that all persons who bought the mistaken fare have to be treated equally (i.e. the airline can cancel and reimburse, honor, or some other mutually acceptable combination).
I could see this as a money making idea for the FW crowd and and the like.
1. Buy an obvious mistake fare.
2. Book non refundable plans
3. Push the airline to cancel you and pay you back
4. Book a different flight and use the hotel/cruise/other option for free as you were paid back.
5. Profit
@Jonny – Y, Yes 😉
HA!
But what if the airline does honor the fare or it turns out not to have been a mistake? You’ll be stuck for all those expensive other arrangements. And what’s to prevent an airline from honoring or not honoring case by case depending on that? I agree with the principle that this interim solution is absurd, but I don’t think it necessarily opens up the floodgates for safely scamming the airlines.
While I feel that the new rule is reasonable and well intentioned, there’s a very important point that I think is being totally overlooked. The whole discussion assumes that you purchase the ticket from the airline. What happens if you purchase the ticket from an online booking engine (e.g. Orbitz) or through a Travel Agent. Do they have the legal right to cancel with the consumer? Does the Agency have to ‘eat’ the loss? Who does the consumer turn to in order to be reimbursed for non-refundable expenses?