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If ever there was an example of an industry in which the main players want everything their own way it’s the airline industry. If you ever have a bout of insomnia, try reading the detailed rules of an airline’s loyalty program and you’ll see just how skewed the rules are in favor of the airlines.
However …
The airlines run the loyalty programs and no one is forcing us to become members of those programs, so that’s just something we have to live with. But here’s the thing, the airlines write more than the loyalty program rules, they write the conditions of carriage too.
For US carriers, the rules of carriage usually have a paragraph explaining that a customer is allowed to cancel a non-refundable fare within 24 hours of booking without any penalty. This isn’t a rule that the airlines have incorporated out of the kindness of their hearts, it’s a rule imposed on them by the US DOT.
Here’s the relevant paragraph from the American Airlines conditions of carriage:
Generally, you have up to 24 hours from when you buy your ticket to get a full refund if you booked at least 48 hours before departure. You must cancel your trip within 24 hours of purchase for a refund. If you bought your ticket through a travel agency or another booking source, contact them for a refund. Some countries have different rules about refunds, and if so, we will follow those rules.
After the 24 hours have elapsed, the penalties for cancelling a non-refundable fare generally cover most (if not all) of the original cost of the fare, so the customer is left seriously out of pocket. I have no problem with that.
The 24 hour period should be more than enough to cover a customer in the case of a mistake booking (I once accidentally bought a Delta fare while testing out Apple Pay on the Delta app so this rule came in very useful!) and, if a customer’s plans are fluid, they always have the option of paying for a flexible fare.
My problem is with the fact that the same rules don’t apply to the airlines.
If a customer is expected to recognize that he/she has made a mistake with a booking in the first 24 hours after making the booking, why aren’t airlines expected to recognise mistakes they make with fares within 24 hours of making that mistake?
Wouldn’t that be fair?
If you read American’s conditions of carriage there’s actually a specific paragraph covering “Fare errors”:
If we sell a fare in error, we have the right to cancel the ticket. This includes fare errors, computer errors and third party errors (human or computer). We try to prevent, detect and correct errors as soon as possible.
When we issue a mistaken fare, we’ll void the ticket, give a full refund and notify you within:
- 72 hours after we learn of the mistaken fare
- At least 24 hours before departure if you bought the ticket less than 72 hours before departure
Apparently American believes it’s ok for passengers to only have 24 hours to change their minds or to spot an error, but it wants at least 72 hours for the same thing.
Last year we had a spate of “mistake fares” appearing on various airline websites like when Virgin Australia offered a $172 roundtrip Economy Class fare between Dallas and Melbourne and when the same airline offered a $900 roundtrip Business Class fare between Auckland and Oakland.
Had the airline informed passengers within 24 hours that these fares were posted erroneously there wouldn’t have been much scope for irritation and anger…..but that’s not what happened.
Image courtesy of Virgin Australia
It actually took the airline 6 days to let the Business Class passengers know their tickets wouldn’t be honored and an incredible 9 days to let the Economy Class passengers know that their fate was the same.
If a passenger accidentally booked a discounted fare for flights on the incorrect dates and didn’t notice until 2 days after the booking, he/she wouldn’t be entitled anything back from the airline (except, in some cases, taxes)…so why does an airline get away with cancelling fares posted in error over a week after the error was made?
The Is No Moral Issue Here
I am more than a little bored of the whiners who say that passengers know full well when they’re booking a mistake fare and that they don’t deserve to have the fares honored because they’re knowingly trying to scam/con/rip-off the airlines.
That’s utter nonsense – it’s not a scam or a rip-off because no one forced the airline to post the fare in the first place. No one hacked the airline’s systems and posted the fare on the airline’s behalf.
Here’s my question for those who claim there’s a moral issue here:
If you’re in the grocery store and the self-checkout rings up a loaf of bread at $1 instead of $2 do you feel a moral obligation to report this to the customer service desk? Unlikely.
So why are mistake fares any different? Is is a numbers thing? Is there a magic number under which it’s ok to keep quiet and not mention a mistake to the corporation?
If you think there is, you’re only fooling yourself because morality doesn’t have numerical boundaries. It’s either immoral to benefit from a corporation’s error or it’s not, there’s no halfway house.
As long as we’re all playing on a level playing field, there’s no moral issue here, and more importantly, it’s not up to customers to police what a corporation sets as a price.
Airlines are huge businesses making hundreds of millions of dollars in profits, so if they don’t have systems in place that recognize when one of their employees has posted a fare in error or when an FX rate has been entered incorrectly, I have absolutely no sympathy at all.
If 24 hours is considered a suitable time for an individual to notice a mistake they’ve made, why isn’t it considered enough time for an airline with incredible resources at their disposal?
Weak Regulator
There was a time when the US DOT required that all mistake fares within their jurisdiction had to be honored but, just as the DOT/DOJ rolled over and allowed all the US airline mergers to go through, the DOT rolled over and removed this requirement when the airlines asked them to.
Nowadays all the airlines are liable for is any non-refundable expenses a customer may have incurred after booking the cancelled fare.
It’s pathetic.
Let’s not forget that these are the same airlines who are currently petitioning the government to allow them to make their fare advertizing less transparent than it is right now – they want to be allowed to advertize their fares without showing the taxes and fees you’ll have to pay to book those fares (like rental car companies do now).
And they wonder why they’re such a disliked set of corporations [roll eyes]
Bottom Line
I’m more than happy for the airlines to be given the same 24 hours to spot a mistake they’ve made just as one of their customers would be given 24 hours to correct a mistake they’ve made with a discounted fare, but not a minute longer.
There shouldn’t be one rule for them and one rule for us and regulators around the world should be given powers to force airlines to own their mistakes. We have to own ours, so why not them?
Once 24 hours have past all mistake fares should have to be honored. Period.
