Swiss Cancelling Myanmar First Class Mistake Fare Tickets

Last week I posted about a fare from Yangon, Myanmar to Eastern Canada … less than $600 for international three-cabin first class.

The example of the fare that I gave was flying to Tokyo then Zurich then New York and on to Montreal, with Tokyo – Zurich – New York in Swiss First Class.

The fare went viral, my post began a thread at Flyertalk (it was already being discussed on Milepoint). The morning after I posted this, I got an email from an executive at Swiss…

May we ask you please where you received this information on behalf of SWISS from?

A full week later, Swiss is cancelling folks who are flying that airline under the fare and whose tickets were issued as Swiss tickets (first 3 numbers of the tickets are “724”).

Subject: Cancellation of your ticket due to erroneous fare

Dear Sir/Madam,

We are writing in regards to the travel you recently booked with Swiss International Air Lines Ltd. from Yangon (RGN), Myanmar. Unfortunately, as you must have been aware of, the fare you purchased was incorrect and resulted from an inadvertent error that was out of our control. While SWISS honors its commitment to the highest level of customer service and safety in air travel, it must also honor its obligations to its employees and shareholders.

We are not obligated to provide our services for compensation that is obviously erroneously published and commercially infeasible. We are aware that good travel bargains are quickly recognized and booked, however principles of fare bargaining dictate that a service provider does not give away its services for almost free or at a loss.

Because the fare you booked was not valid, we will unfortunately have to cancel your reservation and ticket. We are extremely sorry for this error and we are not increasing the price of your ticket; rather we will promptly issue you a full refund for the total price you paid for the ticket. The full amount will be automatically credited using your original form of payment. In the event that you would like to rebook your itinerary at the appropriate price, please contact your nearest SWISS service center or your travel agent.

SWISS deeply regrets the inconvenience caused by the publication of the erroneous fare to the passengers who may have thought they had booked and purchased a valid ticket for an erroneous cost. We apologize for this unfortunate situation and trust your future travel on SWISS is comfortable.

Sincerely,
Swiss International Air Lines Ltd.

Malzgasse 15, Basel/Schweiz
Registereintragung/Registration:
Handelsregisteramt des Kantons Basel-Stadt

I’ve never been one to argue over these things. I’ve never felt as though I had a ‘right’ to fly international first class for $500. I don’t get litigious. Instead, my attitude has always been “I’m going to get in on this, it’s like buying a lottery ticket. If the airline decides to let folks fly around the world in a premium cabin at a deep discount, I’d love to be one of the people that gets to do that!” And if they don’t, that’s cool. Nothing ventured nothing gained.

But this one is going to be interesting.

This same route — Myanmar to Canada — was the locus of a ‘mistake fare’ at the end of April. On the 30th of April it was possible to book fares similar to this, and tickets were issued by Korean Airlines. They cancelled those tickets. The US Department of Transportation got involved for tickets that involved a connection in the U.S. or that were issued in the U.S. And they required Korean to re-instate those tickets; re-instatement happened about two weeks later.

In this case it’s already been a week since tickets were booked, without any communication from Swiss. Many of these tickets were issued by US agents. And many of the itineraries involved connections in the U.S., most often New York JFK. Which suggests that there will be some nexus with U.S. rules.

To be clear, not all of the tickets were issued on Swiss ticket stock. For instance, some folks have Iberia tickets. Those appear to still be in tact. Those folks whose tickets have been cancelled are getting these e-mails from Swiss.

But here are the frequently asked questions for Department of Transportation rules that apply to airlines cancelling mistake fare tickets.

Does the prohibition on post-purchase price increases in section 399.88(a) apply in the situation where a carrier mistakenly offers an airfare due to a computer problem or human error and a consumer purchases the ticket at that fare before the carrier is able to fix the mistake?

Section 399.88(a) states that it is an unfair and deceptive practice for any seller of scheduled air transportation within, to, or from the United States, or of a tour or tour component that includes scheduled air transportation within, to, or from the United States, to increase the price of that air transportation to a consumer after the air transportation has been purchased by the consumer, except in the case of a government-imposed tax or fee and only if the passenger is advised of a possible increase before purchasing a ticket. A purchase occurs when the full amount agreed upon has been paid by the consumer. Therefore, if a consumer purchases a fare and that consumer receives confirmation (such as a confirmation email and/or the purchase appears on their credit card statement or online account summary) of their purchase, then the seller of air transportation cannot increase the price of that air transportation to that consumer, even when the fare is a “mistake.” A contract of carriage provision that reserves the right to cancel such ticketed purchases or reserves the right to raise the fare cannot legalize the practice described above. The Enforcement Office would consider any contract of carriage provision that attempts to relieve a carrier of the prohibition against post-purchase price increase to be an unfair and deceptive practice in violation of 49 U.S.C. § 41712.

Korean was forced to reinstate very similar tickets. United was not when the 4-mile Hong Kong mistake award tickets were offered, they contended that the correct price was shown throughout and published on their website and it was only the final stage where the wrong number appeared. That seemed to be enough.

It will be interesting to watch how the DOT rules do or do not apply, I imagine that it took Swiss a week to initiate cancellations because they were working with their lawyers to determine whether they had plausible grounds.

They claim “we are not increasing the price of your ticket” rather they are refunding and customers can buy a new ticket at a higher price if they wish. We’ll see whether the DOT buys it or not.

Here’s the Department of Transportation complaint form. And here’s the Milepoint discussion of the fare and its aftermath.

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 Milepoint.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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Comments

  1. Hey, at least SQ Suites bookings are still good! I much prefer my Swiss First itinerary over my SQ Suites itinerary, but I’ll gladly “settle” for SQ Suites!

  2. my guess is that since swiss does not publish any through fares between RGN and YUL and the mistake fare was also not a SWISS published fare rather it was a IATA generic fare and the tickets was issued on LX Stock 724 since their flight number is marked as the first carrier over the ocean on the reservation

    from the letter they sent out you could clearly see that they are pointing to the fact that its was not their fault
    Quote: the fare you purchased was incorrect and
    resulted from an inadvertent error that was
    “out of our control”

  3. Whatever the outcome it makes me think less of Swiss. The company should honor the fare even if it was a mistake. The fact that it may lose money is not a defense. This is a fare increase pure and simple.

  4. I normally make fun of those who “demand” these things get honored. But in this case, i don’t see how they can cancel the tickets. Seems different that the UA award tickets where it was the miles deducted that caused the discrepancy. I can’t believe i am writing this, but i think these travelers may have a case.

  5. I’m no expert at American law, but from what I read it seems as if the people who routed through the US might have a case if they file with the DOT? This “cancellation letter” might be Swiss’ way of weeding out the fares that need not be honoured or people who weren’t really planning on flying the tickets.
    As a side note, I have not received the email as yet but my e-ticket number has disappeared off of the Swiss website.

  6. @Dov,
    I don’t think just because it was an IATA error they are off the hook. If anything Swiss should go sue IATA.

  7. I don’t think this is like finding a mis-priced item on a store shelf and the cashier refusing to sell it at the incorrect price. This is like finding a mis-priced item, going to the cashier and paying for it with no dispute coming from the store and then the store contacts the customer later at home and says it wants the product back in exchange for a refund because it freely and voluntarily sold it at a loss. Swiss is just wrong and behaving in a way that reflects poorly on its values. My two cents.

  8. @Nick

    I did not say that they are off the hook I am just trying to understand their response from the letter as they claim that its was out of their control

  9. And by the way, how does the DOT enforce it? It’s not like LX is a US based airline, and other than stop them from serving the US, which wouldn’t go over well with anyone, I don’t see what they can really do if LX (rightfully) says no.

  10. Gary,

    There may be nothing wrong with cancelling the tickets, but the additude they seem to exude.

    I quote:
    “Unfortunately, as you must have been aware of..”

    Whoa, blaming the customer for something that is totally reasonable to do.

    “While SWISS honors its commitment to the highest level of customer service and safety in air travel, it must also honor its obligations to its employees and shareholders.”

    No mention of its obligation to the customer?

    “We are not obligated to provide our services for compensation that is obviously erroneously published and commercially infeasible.”

    Well, we’ll see what the DOT says.

    “We are aware that good travel bargains are quickly recognized and booked, however principles of fare bargaining dictate that a service provider does not give away its services for almost free or at a loss.”

    Thats not totally true, as you can attest. It may all be incremental revenue on a potentially empty seat.

    This was one of the worse letters sent out after such fiascos. They could have played it a little more apologetic.

  11. David said,
    The company should honor the fare even if it was a mistake. The fact that it may lose money is not a defense. This is a fare increase pure and simple.

    Why should it honor the fare? It is not a fare increase as they are cancelling the tickets – they clearly say so in their letter and that is obviously based on consultation with their lawyers. The only issue is whether or not the DOT will insist they honor the tickets on itineraries that involve travel to/from an airport in the USA. Otherwise they have no jurisdiction.

  12. @Stephan

    If I buy a ticket from NY to LA for $800 and the airline says it was a mistake and cancels the ticket and refunds my money and the then prevailing price is $900, I would call that a price increase.

  13. One more thought: The assumption of the comments is that if Swiss’s position is unlawful it must be only unlawful under U.S. law. I have no idea whether what Swiss did was or was not lawful under Swiss law or the law of any other country. The letter quoted in the article cites no legal authority whatsoever. It will be interesting to see what happens.

  14. The DOTs enforcement of this rule is actually a lot like the EU ETS controversy. At best, at the very best, the US regulations effect just the ZRH-JFK, JFK-### flights, but not the RGN-NRT-ZRH legs.
    The US, and just about every country rightfully says that the EU has no right to a) tax foreign carriers, and b) tax carriers for mileage outside their territory. Sounds just like this, DOT telling a foreign carrier to do and telling it what to do on flights that don’t come within thousands of miles of the US (Note that the US Senate passed a law preventing US airlines from abiding by the EU ETS).
    Swiss can play nice and tell customers they will honor the mistake prices prorated from ZRH via JFK, and then charge them the prorated normal price for the rest of the trip.

  15. @Kris. Last time I checked
    Fare: A-B-C is hardly equal to Fare A-B + Fare B-C, irrespective of countries / continents.

  16. @stargoldusa
    I don’t disagree, but the US DOT has no right to dictate what LX does on flights that don’t come within thousands of miles of the US.

    The US complains that the EU charges taxes on US flights that land in the EU, yet somehow regulating flights that don’t come within thousands of miles of the US is perfectly fine. Give me a break, the DOT needs to get off their high horse.

  17. I agree with Gary and many here that while I normally would just say “easy come easy go” to such a thing, Swiss’s attitude here, and their shaky justification for canceling (“I must have known it was an incorrect fare, surely”) makes me want to fight this.

    And to the person who mentioned entitlement–it’s really not about that. It’s about holding corporations to account and making sure they play by the rules. What if I were someone who didn’t know what a First class fare was supposed to cost, and in the six intervening days since buying this flight I had booked thousands of dollars worth of non-refundable travel around it?

  18. I don’t think that when DOT passed those regulations it saw itself as being the vanguard of protecting poor mistake fare first class frequent flyers from Rangoon to Montreal from those evil, unfair airlines that cancel such tickets and give you your money back. All those entitled whiners running to DOT to demand this and that mistake fare be honored are probably becoming a real pain, and could end up causing DOT to be less consumer oriented.

  19. @ David:

    I am amazed at the amount of uninformed and biased posts I have seen here, especially yours. DOT passed rules that specifically address mistake fares. The words “mistake fares” are in the body of the rules. So yes, the DOT did mean and intended to protect consumers from airlines which refuse to honor mistake fares. Maybe you should read the rule first before you comment on it, don’t you think?

  20. @ #14, Ben: You said “ ‘Unfortunately, as you must have been aware of..’ Whoa, blaming the customer for something that is totally reasonable to do.” and @ #22, Gabriel, who said “Swiss’s attitude here, and their shaky justification for canceling (“I must have known it was an incorrect fare, surely”) makes me want to fight this.”

    Despite their condescending tone, they are correct, aren’t they? Both of you absolutely knew this was a mistake fare.

  21. The US has no problem with the extraterritorial application of our laws, read up on the Helms-Burton Cuba sanctions for example. Its only when other countries try to do the same to us do we cry foul.

  22. It looks like Swiss is trying to escape 399.88(a) by asserting they’re not increasing the price of the ticket. While accurate, the law states: “[a] contract of carriage provision that reserves the right to cancel such ticketed purchases… cannot legalize the practice described above.” Since Swiss is canceling tickets, they must be invoking some such “right” to cancel and, as such, it does not seem the cancellation of the ticket will remove them from 399.88(a).

    However, I suspect Swiss may attempt to argue that the leg NRT-ZUR (as part of the itinerary which then travels to JFK) can be construed as separate from the rest of the itinerary such that 399.88(a) doesn’t apply. If so, raising the price of this leg alone (even while maintaining the ZUR-JFK at the price offered) could likely resolve their problem since people will cancel all tickets rather than have to pay the increased amount on the NRT-ZUR leg. My hope, however, is that the airlines can not separate out legs for purposes of the law.

    It will be interesting to see how this unfolds.

  23. @Timmer1001 I don’t know why your rude post is directed at me. I think Swiss should honor the fare. I wish @Gary would moderate comments.

  24. I do hope people fight this. It is becoming difficult to trust any promotions from travel service providers. What seems like a good deal can turn into a “mistake” when the provider decides it’s not in their best interest anymore. When there are 1 £ airline tickets out there, $600 for F does not sound like an unreasonable promotion. For those that are complaining, perhaps you can provide the exact price or percentage off that would be “reasonable”, below which everything should be considered a “mistake”.

  25. If there were solely in the US, I’d say the DOT has authority to keep the whole fare intact, but here you are looking at a $20k+ ticket going for $600, the majority of which is outside the US. Prorate the ticket, you end up with around a third of the miles being on flights to/from US airports, so lets say charge $200 for that (~$600 for full fare). And then prorate the other 2/3 of the miles at the cheapest F fare that day, which is generally in the 25k range.
    $200 for the US portions.
    $16k for the non-US portions.
    If I were Swiss, I’d say, “If you want to buy up, go ahead, if not, you can get your money back.”

  26. @Andrew, to me it doesn’t matter. It’s about the principle. And even if I knew it was, that doesn’t mean everyone would (the majority, I think, who are not reading these kind of blogs, would just say: ‘hey amazing promotion!’). As @nycman says, where do you draw the line? If Swiss can say that obviously we must have known it was a mistake at that price, that opens up the possibility that they could say that on any fare they sold that was lower than normal. It’s about consumer protection–and this argument on the part of Swiss represents a slippery slope away from that.

  27. Anyone who sees that fare know it’s not right and were just trying to get something for nothing. If you get it great if not just stop whining and deal with it.

    It’s not different than misprints in sales ads, ACCIDENTS happen. That doesn’t mean everyone is entitled to something just because we are sue happy about everything.

  28. Hi all,
    I would have posted my question on flyertalk but I could not. Just wondering if anyone else here knows what to do. I bought a ticket (RGN-NRT-FRA-ZRH-YUL) from the round 3 ex-RGN mistake fare and it has been fine (at least from what I can tell) for months. Until a couple days ago, my first segment ANA flight from RGN to NRT was cancelled. Not just my ticket, the whole flight was cancelled according to ANA. When I called them, they told me that since I bought it through Travelocity, they will have to call and re-book my ticket for me. The Travelocity agent I spoke to was trying to figure out a way to fix it. I dont want they to cancel and rebook the ticket since I might ended up being charged with the correct price. I then thought that what if I just started my trip in NRT since the first segment was cancelled. BUT the travelocity agent told me that if I don’t rebook the first segment the rest of the flight will be cancelled. Is that true? What would you have done if you were me? Sorry for the long post but I don’t really know where else to post the question. Thank you so much in advance.

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