How Mistake Fares Get Filed and Why Korean Messed Up

Airlines can accidentally file the wrong fares. I should know, since I’ve personally done it twice. That’s fine, people make mistakes, but it’s the recovery that counts. The recovery from the latest mistake, Korean filing a sub-$500 fare from the US to Palau, is a great example of good intentions gone awry. Korean tried to do this right, but it simply waited too long.

You might think that all fare filing is a highly automated process, and much of it can be, but there is still plenty of opportunity for human error. In my days doing pricing at America West, I messed up twice.

The first was a web-only fare (back when airlines still did that) between Baltimore and Phoenix for less than $100 roundtrip. This was in the fairly early days of web booking, and we caught it quickly. I don’t think one seat was sold. With the other, I wasn’t so lucky.

I accidentally filed a $62 roundtrip fare between Indianapolis and Santa Barbara. I don’t remember which, but I had either left off the leading digit or the trailing digit. (Meaning it was supposed to be $462, or something like that, or $620.) A travel agent in Indiana found it and promptly told all his friends. We had sold a few dozen tickets before we found the error and fixed it. In the end, we honored the fare, but I always got ribbed for it.

Filing mistake fares is sort of a rite of passage. It wasn’t a matter of “if,” but “when” you would do it. I fortunately never filed the dreaded zero-dollar fare, but in a way, those are easier. Those are very clearly mistakes and you can probably get away without honoring them.

But for other mistakes, it’s more murky. The latest flub came from Korean Air. I only know about this because I received three different emails on the subject from people who were rightly furious with the way it was handled.

Back in September, Korean filed fares from the US to Palau for between $485 and $560 roundtrip all-in depending upon the origin city. This is clearly an unbelievable deal, and had to be a mistake (others say it’s plausible, but it’s really not). Korean had it out there for 3 or 4 days before they found it and pulled it. A FlyerTalk thread clearly had people warning that it was a mistake fare, but of course, everyone jumped on it with the hope that Korean would honor it. (I don’t blame them at all.)

Now, once an airline figures out it made a mistake, it pulls the fare and then decides whether to honor it or not. There is no set rule on how this should work, and every airline handles it differently. After the fare disappeared on September 6, people waited to see what would happen. Nothing happened, so the assumption was that the fare was being honored. People started booking hotels, making plans, etc.

Then, on November 7, two full months after the fare was purchased, Korean Air sent an email to everyone saying that the fare wouldn’t be honored. The process would be as follows:

Korean Air is offering affected customers a full refund of the fare paid, or the opportunity to purchase a ticket on the same itinerary at a fare equal to the lowest fare offered by Korean Air in the market, or the closest similar market, during the past year.

Korean Air also is reimbursing customers for expenses incurred as a result of having purchased the incorrect fare, such as cancellation fees for flights, hotels, ground transportation, and other arrangements.

In addition, Korean Air is offering those passengers a $200 travel voucher for a future flight to any Korean Air destination from a U.S. gateway.

Now, had Korean put this out the day after the fare was found, then it would probably be acceptable. Oh sure, some people think that airlines should honor a mistake fare no matter what, but to me this seems like it would have been a generous response. But doing it two months later is just ridiculous.

Sure, this means people won’t be out any money, but it fails to account for the fact that people made plans that can’t easily be replaced. Some people scheduled this as their trip over the holiday period. Others picked long weekends. There was one person that was even planning on leaving on November 16. This was canceled a mere 9 days before departure.

Now what do those people do? It will be significantly more expensive to plan a different vacation for the holidays, so people are effectively screwed out of having a real vacation during that time. Again, had Korean canceled this on September 7, then it wouldn’t be a big deal. But this is bad.

So what the heck happened? I’m told that the problem was that Korean wanted to do this right, and that means the airline did it wrong. See, the airline took so long not only discussing internally what to do but also checking with regulators to make sure they were following any laws that might exist, that by the time a decision was made, two months had passed. And that’s how they ended up in the predicament.