Topic of the Week: 4 Miles to Get to Hong Kong

LOL. I was looking forward to your response. Morally, philosophically, I don’t think they should have to honor. But this is a public company that doesn’t give a flying f**k about it’s customers, and the DOT rules support them honoring it. What did that judge say – “the only way to fix bad law is to practice it”. Well I intend to practice with United/DOT.

United (and I would imagine collaboratively with the DOT) have come up with an interesting solution.

DOT has to stand by its regulations. They have to say the regulations apply to award tickets. But no one reasonably wants to make United honor this, and I say that as the person who first publicized this error in North America. (It was, apparently, being discussed first on the Chinese-language frequent flyer site Flyertea.)

So United maintains that the correct pricing was displayed throughout the booking process, and is posted prominently on its website. Thus there was no deceptive pricing. Folks who had the right number of miles in their accounts paid that normal price. Folks who didn’t have the usual number of miles in their accounts didn’t actually have ANY miles withdrawn (the 4 miles per person were never even debited).

United is cancelling the tickets FOR NON-PAYMENT, which is permitted under DOT rules.

No deception, and not raising the price after booking.

This allows United to not honor the mistake, and the DOT rules to be affirmed in the process.

I don’t condone knowingly booking fares that are obvious mistakes, and I’m pretty sure 4 miles for a first class award ticket to HKG falls into that category.

However, I can see why folks would be upset. It’s because of the double standard the airlines have used for years when it comes to mistakes. If a customer makes even the smallest of errors, such as transposing a letter on a last name, or typing in the wrong date, the airlines are quick to throw “no waivers, no favors” in your face, and tell you your only option is to buy a new ticket, complete with change fees and fare differences. But if the airline makes a mistake, whether it be a fat finger fare, or a schedule change, whatever, they basically give you the Italian salute and say “sorry, we know we screwed up, but you get nothing”, except maybe a refund on your original purchase price. With the new DOT rules, perhaps the fat finger issue goes away, at least on U.S.-based carriers. But I can understand why some folks wouldn’t give a second thought to trying to give the airlines some comeuppance.

That being said, this one seems like an obvious IT glitch, and I don’t particularly like it when people intentionally book this kind of stuff, just hoping for whatever compensation usually gets doled out. Perhaps a fair settlement would be to allow the award bookings at a reduced mileage amount – say, 10,000 miles off of the “normal” award amount – as a gesture of goodwill for the “oops”.

From an airline perspective: I’ve done pricing/rev mgt for a few airlines and have had only 1 glitch. We honored the fares, not many purchased because I caught the error right after the ATPCO upload (we submit our fares to an agency that distributes them to the other airlines/systems only a few times a day). I was glad that our CEO allowed us to honor the fare, and he didn’t get mad at me, he said he did the same thing once but cost the airline a lot more money. He didn’t demand any new changes to how I do my job, as it was just a typo in FareManager (I forgot to add a “0″), but the fact we audit the filings, we caught it and it was only out for sale for 4 hours. And we never made the news (was an $8.40 fare instead of $84.00).

As a frequent flyer and ‘regular’ on FlyerTalk – airlines need to honor their goofs and errors. I took part in the Great Messicana First Class giveaway, where someone filed $150 first class fares (roundtrip) to Cozumel & Cancun. I did get an email from Mexicana advising they will honor the fare however the fare rules will apply to the lowest economy fare and I won’t be eligible for frequent flyer miles.

I also get there’s a lot of “entitlement” feelings over there @ FT. Many of us fly so much that people feel the airlines ‘owe’ us. I don’t take that attitude, but I would be in that same crowd if one of my ‘preferred’ airlines did a glitch – I’d be all over it in a heart beat.

DOT’s Enforcement Office has repeatedly claimed they have jurisdiction under 14 CFR 399.88(a) to apply unfair and deceptive standards to a “computer problem” or “human error” fare, forcing an airline to honor it. But applicability to mileage changes is an open issue. 399.88(a) doesn’t explicitly address the mileage issue, and airlines can challenge the Enforcement Office on this issue. They may have lots of reasons to do so, and DOT probably recognizes that.

The obvious challenge to DOT splits the cash component (taxes and fees, which didn’t go up here) from the miles component (which did). To apply 399.88(a), DOT must establish that miles are legally equivalent to cash. At least today, they’re not. The IRS doesn’t treat them the same, and every airline makes clear that ownership of miles is retained by the carrier. In United’s case, it states “accrued mileage and certificates do not constitute property of the member” quite explicitly in the MileagePlus terms and conditions.

Your cash is your property, and when you buy a ticket for cash, you provide that property ($) as valid consideration for future air travel. An exchange of value occurs. But when you exchange mileage, it’s the airline’s property that is exchanged for future travel. For this reason, the airline can argue that post-purchase changes in mileage, particularly when caused by errors or mistakes, are very different from post-purchase changes in cash.

The stakes are very high here for DOT (in jurisdiction) and the airline (in public relations), and therefore I’d expect a quiet compromise. But application of 399.88(a) here is challenging and DOT likely knows it.

I agree with AbFabSkyLife that “If the DOT decides on enforcement in this case, airlines will simply budget to honor these mistakes wholesale, and will pass the costs of honoring mistakes along to passengers in the form of fare increases.”

But this was not a case comparing to wrong item checked out at the cash register. It was wrong listed price. United should learn from their mistakes and honor it. If they don’t learn from their costly mistake they are just stupid.

Whenever we as a consumer make a costly mistake; we get made at ourselves. Then some vouch never to let it happen again the next time around.

I also agree with Todd in IAD. “…by not honoring the tickets, United garners only negative press.” You bet.

I am unable to understand Brett’s indignation in defense of the poor old airlines, (as has been common amongst most bloggers over this issue.) We are expected to pay for our mistakes, and no one allows us of the hook! Put a wrong name on a ticket, show up late for a flight by mistake, etc etc…..Do the airlines say, well poor old chaps, sorry you made a mistake, let us waive all fees and expenses and book you on the next flight???? What a laugh, of course not. So why should it be any different for them? They screwed up, and you pay for your mistakes…. I normally would defend Cranky and Co but this unfettered Airline Apologetic Attitude makes one wonder about the real independence of this blog and others, or just how much all the free trips to “review” etc are beginning to bend journalistic integrity…..Just a thought.

I dont fly any more unless its absolutely necessary. US Carriers are a rip off any way…Its always something wrong they do and its our fault…I dont patronage many places that are that way….Thus I dont fly much

I think both sides are being dumb. United should honor the fares if that is what their site spit out. At the same time, I think they have every right to not honor it if they would prefer the negative publicity. At the same time if I am a customer that booked one of those flights I would want them to honor it, but would also be okay with simply some sort of compensation or discount if they won’t honor the lower price and I still want to take the trip.

Business is won and loss on how a company handles mistakes, and often not on doing things right the first time. Mistakes are bound to happen, and how you handle them makes all the difference in the world when it comes to perception of the company.

Last year I booked two flights for my father using his Dutch first name, not realizing he’d changed it to the Anglicized version on his passport. When I discovered the mistake, both Delta and AirTran changed it and waived the change fee. Point being, the airlines don’t always penalize customers for a mistake.

I can certainly understand United not wanting to honour mistake tickets, particularly if the bookings are on partner airlines where United has to pay for the seats. Perhaps a compromise would be to honour the tickets but rebook passengers on United flights. The cost of transporting a few extra award passengers on their own metal would be negligible, and as they’re still providing “First Class” service (quotes intentional) they’re technically fulfilling their end of the contract. The only losers would be a few UA elites whose upgrades from J to F wouldn’t clear.