Here’s Why the Era of Mistake Fares Isn’t Over, Despite DOT Changes

With the Department of Transportation declaring that they will no longer enforce their own rules requiring airlines to honor mistake fares, I’ve seen several references across the interwebs to the end of mistake fares.

Dans Deals declares, “for the most part this may well be the end of an era” and Miles to Memories asks, “The End of Mistake Airfares?” Mommy Points” “The Death of Mistake Airfares?

I don’t think it’s that simple. Mistake fares are in many ways less common than they used to be. And those that have still come up weren’t all subject to Department of Transportation requirements in the first place. And yet mistakes happen, and seem to come in waves.

Several key points:

  • The Department of Transportation has simply said, as an interim measure while they consider whether to revise their rules, they will not enforce the existing requirement for airlines to honor mistake fares. So the DOT approach is itself in flux.

  • Mistake fares pre-dated the DOT rules and were frequently honored. I flew to Mexico in business class for $55 + tax in 2002. I flew to Italy and Cyprus in business class for $33 + tax in 2006. I even shared an $1100 business class ticket to New Zealand (upgradable to first) in 2007 — to name just a few. This was all before the DOT got involved in mistake fares.

  • The DOT rules only applied to airfares flying to or from the US. Plenty of mistake fares not involving the US were honored, though certainly not all of them. In fact, mistake fares involving non-US airlines are far more common today than involving US ones and as a result most mistake fares occur outside the US (and thus outside US jurisdiction).

  • Hotels publish mistake rates all the time, the Department of Transportation has had no jurisdiction. And yet many – though not all – hotel rates get honored. I stayed at the Hilton Tokyo for $3, the Hilton Barbados and Hilton Nassau for $0 (after paying for the first night of my stay), the Le Meridien Khao Lak (in an oceanfront villa) for $33, and many many more… all without DOT involvement.

There’s no reason to believe that mistake fares being honored was uniquely the result of US government requirements. Mistake fares were more common long before recent DOT rules went into place, but that was because the tools airlines had for catching them weren’t as good.

No doubt some mistake fares were honored in the past three years because of DOT rules. But that doesn’t mean that without these rules mistake fares are a thing of the past.

If US airlines stop honoring mistake fares it’s likely to be precisely because the DOT used to require it and now no longer does. The culture around these fares has changed, and in some sense it’s because of the government rules surrounding them.

  • Airlines used to get bad press not honoring their mistakes.
  • With the government requiring airlines to honor, a public sense of unfairness developed around these fares — that the airlines weren’t being fairly treated (if you can imagine such a thing in the public mind!) and that consumers behaved badly by booking them.
  • Airlines can now say they’re “following government rules” for how they are handling the matter. In other words, they blame the government for not honoring the fares just as they were required to honor the fares by the government. Government involvement absolves the airlines from taking responsibility.

In some sense ‘the era of mistake fares’ ended in 2009 when the Airline Tariff Publishing Company instituted tools to help airlines filing international fares detect and avoid mistake fares in the first place. And yet mistake fares still didn’t die.

They were given a new twist by DOT rules, with consumers doing their best to connect in the US even on fares that didn’t originate or terminate in the US, hoping for DOT protections (until the DOT decided that merely connecting in the US wasn’t enough, in the case of Swiss-issued tickets for the Yangon first class mistake fare).

There will still be mistakes, and some will still be honored. Perhaps there will be fewer honored than otherwise as a result of the era these past three years where the government required it followed by the lifting of sanctions for failing to honor.

But none of this suggests we ought to pinpoint the DOT’s refusal to enforce its own rules on mistake fares any longer as when mistake fares died. Long live mistake fares!

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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Comments

  1. In the wake of Northwest v. Ginsburg, and DOT’s current choice to abstain from enforcing the rules, what gives you any comfort that airlines will ever honor any contract with passengers if they can possibly claim that there was a mistake?

    I don’t see anything in 2015 that suggests that the airlines care about anything other than the instant transactional value of an individual.

  2. For the most part the same conclusion I came to yesterday, aside from the somewhat out of context quote ­čśë

  3. While technically true that it’s an interim step by DOT, their recent history seems to indicate where their head is on this.

  4. You’re right, the DOT rule change did not kill mistake fares all by itself. However, it is one of the final nails in the proverbial coffin. The use of social media, particularly facebook and twitter, have expanded the cost of pricing errors. Moreover, airlines are no longer interested in courting passengers who do not bring significant amounts of business to them (Delta/United anyone?) . I am willing to wager that, going forward, the only time an airline will honor a mistake fare is when social media has not succeeded in multiplying the error by several orders of magnitude (e.g., the recent United mistake fare generated over 15,000 DOT complaints). In other words, the goodwill to be obtained by honoring the mistake will have to exceed the costs. Make no mistake (pun intended), the equation and the times have changed.

  5. Question: what is to stop an airline from stating retroactively that a low fare is a mistake fare?

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