What’s So Wrong With Delta Charging Frequent Flyers More for Their Tickets?

Delta’s charging logged in frequent flyers more for tickets has been all over the news.

Delta Air Lines may have charged some frequent fliers higher fares than other customers for almost three weeks because of a computer glitch.

Delta acknowledged on Wednesday that frequent fliers who logged into its website to search for fares saw different prices than people who searched anonymously. Delta spokesman Paul Skrbec said frequent fliers sometimes saw higher fares, sometimes lower. He said the problem has been fixed and apologized to travelers.

It’s easy to joke that this means earning Skypesos, already a devalued currency, now generates negative value.

In a test search of three airfares, it was reported that one logged in Skymiles member was given a price $168 higher than a non-logged in customer. Delta says they fixed the problem before they were contacted by the media, though this seems odd considering that the reporters working on the story were able to replicate the glitch.

Hotwire used to vary price based on the web browser being used to search, someone interfacing with the site using Firefox would often get a price about $2 less than someone logging on through Internet Explorer. Perhaps they figured that a Firefox user was going to be savvier.

I don’t actually have a problem with an airline charging a different price to different customers, that’s the very notion of yield management, they want to tailor the price to a customer’s willingness to pay — the nature of advance purchase and Saturday stay requirements are precisely tools to extract more revenue from customers who are price insensitive, value their time highly, or are desperate to travel.

But it’s not practical to run a strategy where logged in customers see a higher price than customers not associated with a frequent flyer account number. I rarely start my airfare searches on an airline’s website, I tend to begin with ITA Software while others may begin at Kayak. Either way, and while not everyone follows these behaviors, there’s too much transparency for this to be sustainable. Even if an airline required booking on its own site in order to earn frequent flyer benefits, one might book without their account number attached and add it later.

Of course Delta is a leader in its efforts to unbundle its products, they offer some fares without the ability to select seats in advance even for top elites. One could imagine that they would try to move to a model where benefits applied only on bookings made through their site, and at a higher price even.

In this particular case, though, what Delta did is problematic because it’s a direct violation of its promise to customers. Delta’s Customer Commitment, last updated in September, is very specific that they will offer each passenger the lowest fare that applies for their given itinerary.

1. Offering the lowest fare available
We will disclose on our website, at the ticket counter, or when you call our reservation center to inquire about a fare or make a reservation, that the lowest fare offered by Delta may be available elsewhere, if that is the case. Currently, fares offered through delta.com, at the ticket counter, or when you call Reservation Sales are the same.

Delta acknowledges that they failed to honor that commitment, that they discovered the problem on their own even before they were contacted by media. And yet there’s no indication they made any efforts to contact affected customers.

That, it seems to me, is the fundamental problem here — not this being “the equivalent of the soft drink machine that dispenses $5 cold drinks on a sweltering hot, sunny day and $1 drinks on a cold, dreary day..”

Delta should honor its customer commitment. It’s difficult to retroactively identify what fares a customer could have been offered based on availability at the time they searched for a given flight. (Part of me expects a class action lawsuit nonetheless.) Still it seems like all frequent flyers who purchased tickets during the three week period of the supposed glitch ought to receive something in case they were affected by Delta’s breach of its published promise.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. […] View From the Wing tells us about Delta overcharging Skymiles members on revenue tickets purchased on their website for the past few months. Whether you bought a ticket or not, this is quite upsetting. Most people would assume that being a loyalty program member would get you a better deal, if anything, but you certainly shouldn’t have to pay more than non-members. Delta claims it was a mistake, but with today’s legal climate, I would expect to see them have to explain that in the courts before long. Details HERE. […]

Comments

  1. I am a platinum medallion and have personally bought 6-8 tickets on .bomb over the last three weeks. No one from Delta has called or reached out in any way with any information at all, but I shouldn’t expect better. I wonder how much I overpaid? With so much yearly travel to give them all my business and booking with them on full trust, this news comes to me as horror. Delta, this is absolutely ridonculous!!!

  2. Hopefully the US DOT/FTC/CPA will open an investigation. You would like to think there would be some teeth to requiring airlines to honor their Customer Commitment (which were only created in order to ward off tougher regulation). Sounds ripe for a class action as well.

    However to be fair this is not much worse for the loyal frequent flyer than the scenario where codeshare flights are marketed at a price that can be hundreds less than the actual carrier’s price. You’d think airlines would at least offer a price-match guarantee (as hotels do) in order to retain business. Instead, loyal travelers are forced to choose between paying more or ditching many of their elite status benefits by flying the codeshare. Stupid.

  3. To me this is a further example of how Delta is showing less and less effort for their frequent fliers, and possibly a hint at the future (revenue based skymiles system). I completely agree that Delta should reimburse passengers- even a 100 dollar voucher for each affected customer would show their commitment to the customer.

  4. I’ve had this happen when buying tickets way before three weeks ago. This is not a new phenomenon. DL cannot be trusted.

  5. Can someone with technical knowledge explain how it’s possible to “accidentally” hide lower fares to those logged in to their frequent flyer accounts? I assume it would somehow involve the failure to display a certain fare bucket (the cheaper one). Is it plausible that such an accident was made? And why would that “mistake” last 3 weeks?

  6. Similar to their reward pricing engine, Delta seems to view computer glitches as revenue enhancement.

  7. I am one of the two people who contacted WCCO Channel 4 news regarding this issue and participated in the interview. Once we discovered the cost issue and difference in ticket cost I personally called Delta to make them aware of the problem. The Delta agent stated to me that “she understood the circumstances of the situation and that as a Medallion member I would always receive the most advantageous fair price based on my medallion status regardless of price”. It was not the first time she had fielded this question. As far as the three week computer glitch Delta is claiming, no way. My business partner and I had the same problem over a year ago. We just didn’t put two and two together and contact the media. This time we did. Shame on Delta!

  8. The Delta website has a price guarantee, you book a flight and if it gets cheaper, you call them up and get your refund. No big deal. I booked a flight to Milan/Italy last week, damn good price (it’s gone up now).

    How to track the price? I use TripIt, it has a paid price tracking feature. A free alternative is to lookup the trip ITA app on iPhone and Save the itinerary, every time you start the app, it will update and compare the price. Found it cheaper? call Delta and get your money back.

  9. Great question. They claim they discovered and fixed the problem before the media attention but we were able to demonstrate the ticket pricing issue to the press only days before the story aired.

  10. Gary, you said “I don’t actually have a problem with an airline charging a different price to different customers, that’s the very notion of yield management, they want to tailor the price to a customer’s willingness to pay.’

    I say that’s a silly thing to say. Imagine going to a restaurant, hotel or Radio Shack and they had multi-tiered pricing. The bad thing about being an oldtimer around here is that we start agreeing with, and taking the side of the airline/hotel etc etc.

    Charlie Brown would say Good Grief.

  11. Delta is a creepy predatory airline
    It would be amongst my last choice in America to fly
    Only Spirit would rank lower and Id still arther than do business with them given the choice in trust factor
    Amongst the stingiest award redemption availability in the nation

  12. Rob,
    I think the price match guarantee is that if you buy it directly from Delta and another site like orbitz is selling the same ticket for less, DL will give you the difference, and at least in UAs case, a discount certificate for your next booking.
    As I understand it, if I booked a non-refundable ticket a week ago at $400 and the exact same itinerary is now only $300, I can’t call in and get $100. Now If I booked it just now on Delta.com for $400 and the same exact one is available on orbitz for $300, I can get the difference.

  13. Kris,
    You are correct. Along with the fact that the price match has to be submitted the same Day. If the price changes a week later your out of luck.

    “To qualify, the lower fare must be for the exact same Delta flights, dates, number of passengers, cabin, and booking/fare class as the original itinerary purchased that same day on delta.com.
    The lower fare is not offered on delta.com and the fare difference must be $10 or higher.
    For a claim to be valid it must be submitted on the same day as the delta.com ticket purchase and it must satisfy all terms and conditions”

  14. @Dan, Stockholm Syndrome? 🙂 hardly. I don’t have a problem with charging different prices to different customers as long as it is transparent / doesn’t break other commitments, here they are going against an explicit promise.

  15. Love the conspiracy theories. It was a programming error. They happen. Given, proper investment and coding can keep them to a minimum, and Delta has failed in this respect, but there’s no plot to dupe people. They are well aware that any potential gain, even if they wanted to fool you, would be outweighed by the PR outcry. If you purchased a ticket during the glitch period, it doesn’t mean you were ripped off. First, you were obviously willing to pay the quoted price, else you would have gone elsewhere. Second, not every ticket was affected, and when they were, it doesn’t mean you spent far more than you would have if not logged in. I completely agree with Gary that the big issue here is that Delta didn’t make good on their promise, and even though not purposefully, they should make up for it. If they can determine what calculation error occurred, they could determine who paid more than they needed to, and credit those people back plus something (miles, extra rebate, discount towards future purchase, etc) for the trouble. Simple as that.

  16. The problem isn’t just revenue tickets, and it isn’t fixed. Delta’s award booking engine is widely panned, but we nearly always find what we need eventually.

    However, I noticed this morning that Low Coach award seats are available for dates I’m watching ==> AS LONG AS I AM NOT LOGGED IN. As soon as I log in as a Platinum Medallion and Million Miler, the same seats on the same flights go to High award level…!

    It is supposed to be the other way around. Contacted Delta Assist. Will be interesting to hear their explanation for this one.

  17. I had a (somewhat) similar incident where calling into United was $55 less than buying through the website and $65 less than on the iPhone app.

  18. So management lied regarding the customer committment. What were you expecting, the morals of Yahoo management?
    Hey, wait a second, Scott Thompson is now looking for another executive position.

  19. funny, Delta seems to have many programming errors, however like lots of other corporations they rarely seem to have one that works against their interest. And when they do they yank the fare, punish the customer…

  20. I was so angry when I read this, because a few weeks back I was booking a flight online and after I clicked purchase fare, it came back with a screen that said the fare had suddenly increased – in this case by $180. Needless to say I didn’t purchase. Didn’t know if it was this issue or not, but I wrote delta asking for the adjustment in price (I purchased it a day or two later and it was about $40 more what I was originally quoted). They were nice enough to give me 3700 miles as an apology, but it still sucks that their booking system sucks.

  21. I just found this thread after searching if there are issues with the fares at Delta. Yesterday, 6/20/2012, I tried purchasing two tickets LAX to MSP. Every time I clicked on purachse, the fare jumped by $125 per ticket, indicated on the apology screen. Interestingly, I could do the search immediately again, and the cheaper tix would still show up on the search result, even though I did not close out the other purchase session. I did this 6 times in a row in the span of 20 minutes. This is very much like a bait and switch pricing strategy. Lure with lower fares, then in the last moment after all customer & payment info is entered, increase the actual purchase price. NASTY.
    I will say, after calling Delta, they honored the lower price after transferring me to the Web purchase folks (all takes time….). But it takes vigilance to not get taken advantage of, not what I expect as a platinum elite million miler…. But really no one should be exposed to such seemingly “systematic computer glitches”…
    I hope the government investigates. I am not in favor of a class action suit, because only the lawyers make any money on that!

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