DOT: Your Stupid Comments on Social Media Mean Airlines Don’t Have to Honor Mistake Fares

It turns out that by posting DON’T CALL THE AIRLINE a frequent flyer let an airline off the hook for honoring a mistake fare. And it didn’t help that another declared, “I feel so alive inside.”

Last week I wrote that – out of the blue – American was reaching out to folks who held reservations (but did not ticket) for a business mistake fare to China back in March and who had their reservations cancelled.

Back in March American had a ~ $450 all-in mistake fare roundtrip between Washington DC and China in business class. They honored the fare.


American Boeing 787 Business Class (Serving Dallas – Beijing)

Many people had merely held – and not ticketed – their reservation. For the most part those held reservations were cancelled (passengers were not allowed to purchase those tickets).

The rule of thumb has always been that anything not ticketed won’t be honored. Failing to immediately ticket a deal like this, in my view, doesn’t leave one with much of a claim to the deal even when it’s being honored.

However, folks with held reservations contended that since American offers the hold feature as their way of complying with DOT rules (instead of allowing free cancellation and refund for 24 hours, on reservations for travel more than a week or more out) that they should have to honor these bookings.

I thought that American’s position was quite reasonable, that the DOT rule is a prohibition on post-purchase price increases and in the case of held reservations no purchase has occurred. American is not obliged to allow customers to purchase mistakenly filed fares.

The DOT sided with flyers who had their mistake fares cancelled, sort of.

This all happened two months before the DOT said they would stop enforcing their own rules which required airlines to honor mistake fares. So American was still bound by having to honor mistake fares; this one happened two months too early. And DOT thinks cancelling held reservations was a violation.

American was reaching out to flyers with an offer to fly in coach for the mistake fare price with no miles and no upgrades or take $1500 off business class with no miles and no upgrades.

This was good enough for DOT — rather than honoring the business class fares offered — because consumers were trying to take advantage of American. Here’s the DOT order (.pdf), flagged for me by at least half a dozen readers.

The DOT semi-lets American off the hook because of comments flyers made in frequent flyer forums and on blogs.

From the footnotes to the DOT order:

So it’s kind of your fault for not being more circumspect. If you call a mistake fare a mistake fare, you acknowledge you know it’s a mistake and buying it is taking advantage of the situation. But if you think it’s just a good deal the DOT still wants to protect you.

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. This is interesting. So in the future, airlines themselves could simply create posts of a similar nature after they realize their own mistake and then it could be used to sidestep the cost of honoring the fares. Of course the DOT has stopped honoring much of anything so maybe it doesn’t even matter. Right now the crazy part is that the airlines are the most profitable they have ever been. Technology is available to basically prevent the mistakes they make if they were smart enough to implement it. They are already using technology to alert them of issues after the fact. And there are now advertised fares from many distant places that several years ago would have been deemed “mistake” fares but clearly are not. It seems to me that the pendulum has swung to far in the airlines favor.

  2. Is Obama a Democrat or a Republican. I think the Republicans have to act all crazy to differentiate themselves because the democrats act like republicans.

  3. Maybe a new standard needed for bloggers – ‘great deal’ for non mistake fares, and ‘GREAT DEAL’ for mistake fares. Just don’t use the word ‘mistake’ or ‘error.’

  4. @vc3, you read my mind. New airline strategy to cancel a fare: hire 100 people via amazon’s mechanical terk program to post similar comments. Big mistake loophole has been opened. I’m amazed that people working in the DOT didn’t consider that before making this point in their ruling.

  5. I guess we now need to call these “promotional” fares.

    And, really, who actually knows why airline tickets price the way they price? I recently bought a ticket for a 1000 mile flight on Frontier for $15 — including tax. It was not a “mistake.”

  6. Alright guys. I spend too much time reading mile and points blogs, forums etc. It’s time for everyone (I mean everyone) to circle the wagons on this. Any super cheap fares in the future are not a “mistake” they are a “huge discount” or “leader item” just like Walmart runs on Black Friday. Offering a great price on certain items to get us to be a customer. Got it? Good. Thanks.

  7. i still think we just need parity:

    let the airlines cancel any purchase within 24 hours. after that, the airline must honor the fare, or pay the customer whatever amount that seat is selling for at the time the airline pays the refund (to discourage the airline from delaying payment – if the flight has already passed, make it the max fare cost). the airline must also pay the customer an amount equal to any “change fee” the airline charges.

  8. @vc3, I would expect airlines to *not* do something like that. That is egregious deception, and not hard at all to uncover during investigation. No business in their right mind would risk something like that, particularly one as much in the public and regulatory eye as airlines.

  9. I just don’t see a compelling public/government interest in protecting someone’s right to take advantage of a mistake, whether it’s a passenger or an airline. Give airlines the same right as passengers to cancel within 24 hours. After that, require the contract to be executed (holds probably shouldn’t be enforced at all – the passenger’s given nothing of value, so no contract exists).

  10. It is completely ridiculous to consider “holds” the same as a ticket purchase. There is no transaction, because no money has been exchanged. It is just an intent to purchase which means absolutely nothing in real life and is not an enforceable contract on either party. It’s a courtesy to the consumer that’s all. The DOT obviously has no clue and is motivated by politicking – like pretty much every government department these days – and the public who whine about this are borderline slime balls. People always want stuff for no effort.

  11. @Stephan –

    But the holds ARE enforceable (in normal circumstances) on AA, because that’s the alternative they chose to the otherwise required 24-hour cancellation, and that’s what people are upset about.

    AA cannot drop a valid hold just because they sell all the other seats and would like to raise your fare.

  12. I stopped reading this article when got to ” American was reaching out to folks who held reservations (but did not ticket) for a business mistake fare to China back in March and who had their reservations cancelled.”

    American was not reaching out (they were not looking to engage with people), American “contacted folk” to tell them thier reservations had been cancelled.

    Just becasue so many others ‘reach out’ in the wrong context doesn’t mean you should follow the crowd.

    I’ll now go back to reading the article. Rant over!

  13. Gary, thank you for your post. I note your second last sentence reads “f you call a mistake fare a mistake fare, you acknowledge you know it’s a mistake and buying it is taking advantage of the situation”. Yet you write this after labelling the deal a “mistake” in your opening sentence. While it somewhat elementary now, will you be changing the way you describe these types of deals in the future?

  14. How about when an unbelievable price displays you just buy your ticket and call it a day? The surest way to blow this for everyone else is to inform the masses via blogs or social media in plain language or posting in “secret codes.” I’m sure that
    airlines and hotels regularly monitor these websites.

  15. So people blogging and people posting are able to decree a fare a mistake?

    Can people please blog about how there is too much tax and how govt workers should be replaced?

  16. Oh and to add don’t make up other stupid replacement words either. Origin, destination, price is all you need. I’m sure most people are smart enough to know a damn good price when they see it. You dont need someone to tell you a good deal is good deal.

  17. Wow! That’s crazy!

    If AA can tie a tweet to a specific booking/ticket, then they can (probably) cancel it.

    But a given flyer shouldn’t be responsible for someone else’s speech!

  18. Fold your tin-foil hats and put them back in your fanny packs. Airlines don’t need to do a single thing but kickback and watch the deal killers insert foot in mouth. And the best thing is you guys do it for free and do it publicly.

    Well played internet….well played.

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