Against a backdrop of airlines handling mistake fares badly — cancelling tickets after months rather than hours — the DOT issued rules in 2012 that explicitly required airlines to honor mistake fares.
That’s because DOT prohibited ‘post purchase price increases’ of any kind — cancelling a ticket and requiring that a consumer buy a new ticket at then-prevalent rates would constitute raising the price of travel for that consumer after they had made a purchase.
- Here are some of the all-time best airline and hotel mistake prices.
- Here’s how to find mistake fares
DOT published a notice of proposed rulemaking asking for comment on how it ough to revise its rules. Without publication of a new rule, they basically decided to ignore their rules in the case of United tickets issued in Danish Kroner a couple of months ago.
Now DOT has announced that they’ve simply decided to ignore their published rules (.pdf) on mistake fares, provided airlines make customers whole for non-refundable purchases made in conjunction with their tickets.
The Assistant General Counsel has decided not to enforce section 399.88 with respect to mistaken fares while the Department completes the aforementioned rulemaking process. 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 fare; 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 DOT has basically gone back to their fall 2009 rule announced in conjunction with the British Airways mistake fare to India.
This rule will remain in place until the DOT makes a determination as to what the rule will be going forward as a result of the rulemaking process for which comments closed in the fall.
There are several problems with this new DOT approach:
- It’s not clear what constitutes a mistake fare under this guidance. The DOT simply says,
The burden rests with the airline or seller of air transportation to prove to the Enforcement Office that an advertised fare and the resulting ticket sales constitutes a mistaken fare situation.
- There’s no clear timeframe in which an airline must exercise its rights under this guidance. At what point can purchased travel truly be relied upon?
- This would appear to allow consumers to buy non-refundable travel in conjunction with such a fare, and have the airline pay for accommodations (that a consumer then ultimately uses, booking alternate flights).
That may discourage airlines from cancelling tickets in practice.
There may also be procedures, to be worked out in the future but as now unclear, which would require consumers not to use their non-refundable bookings.
In the meantime consumers might benefit from booking other travel right away, turning the conventional wisdom on its head to wait until one learns if a mistake will be honored. But doing so entails risks, because what expenses an airline will actually reimburse are as yet unclear despite the guidance.
Here’s how the DOT should handle mistake fares to be fair to both airlines and protect consumers.
For now though the DOT is on record saying that airlines don’t have to honor mistake fares, but they do have to make consumers whole who rely on those fares in incurring other costs.
(HT: One Mile at a Time)