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LAXintl
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DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 4:10 pm

The DOT on Friday came out with clarified stance regarding errors in fare pricing by airlines.

With immediate effect as of Friday's publishing date, the DOT aviation enforcement office will no longer compel airlines to honor mistaken fares so long as the carrier:

(1) demonstrates that the fare was a mistake; and
(2) reimburses all consumers who purchased a mistaken fare ticket for any reasonable, actual, and verifiable out-of-pocket expenses that were made in reliance upon the ticket purchase, in addition to refunding the purchase price of the ticket. These expenses include, non-refundable hotel reservations, destination tour packages or activities, cancellation fees for non-refundable connecting air travel and visa or other international travel fees.

This departmental policy will remain in effect until the agency issues a final rule addresses mistaken fares as part of an ongoing larger airline ancillary fees and other consumer protection notice of proposed rulemaking pending before the department.


DOT decision
http://cms.dot.gov/sites/dot.gov/fil...Fare_Policy_Statement_05082015.pdf

=

Funny the DOT even specifically mentioned how news about such fares are spread by travel websites, forums, and blogs, with many travelers subsequently making “bad faith” purchases of obvious mistaken fares.
From the desert to the sea, to all of Southern California
 
steex
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 4:30 pm

Quoting LAXintl (Thread starter):
(2) reimburses all consumers who purchased a mistaken fare ticket for any reasonable, actual, and verifiable out-of-pocket expenses that were made in reliance upon the ticket purchase, in addition to refunding the purchase price of the ticket. These expenses include, non-refundable hotel reservations, destination tour packages or activities, cancellation fees for non-refundable connecting air travel and visa or other international travel fees.

This is an interesting caveat. Assuming it isn't a mileage run, I can't help wondering if this will create a loophole where an airline won't cancel your ticket simply because it's a worse financial decision for them. If I find and book an $80 SFO-NRT-SFO trip on UA and quickly book two weeks of nonrefundable hotel stays, I can't see them wanting to shell out potentially thousands of dollars in cash to reimburse me for the right to void an $80 ticket that was supposed to be $800.

[Edited 2015-05-10 09:31:15]
 
roseflyer
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 4:38 pm

Quoting steex (Reply 1):

If someone takes advantage of such a loop hole, the airline can still take action like revoking a frequent flyer account.
If you have never designed an airplane part before, let the real designers do the work!
 
rta
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 4:43 pm

Seems pretty fair especially given point #2
 
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enilria
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 4:45 pm

Quoting Roseflyer (Reply 2):
Quoting steex (Reply 1):

If someone takes advantage of such a loop hole, the airline can still take action like revoking a frequent flyer account.


They *could*, but I think the DOT would look VERY poorly on retaliation for doing something that the DOT specifically says is allowed.
 
masseybrown
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 4:53 pm

If the airline makes a mistake, they can take it back. If the passenger makes a mistake (on online sites, especially), he is screwed.

We are really back to the days of Cornelius "The public be damned" Vanderbilt.
 
Flighty
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 4:56 pm

Quoting MasseyBrown (Reply 5):

If the airline makes a mistake, they can take it back. If the passenger makes a mistake (on online sites, especially), he is screwed.

I sort of agree with this.

It's one more reason not to buy airline tickets at all. The government has been creating so many.
 
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Polot
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 4:57 pm

Quoting MasseyBrown (Reply 5):

The passenger is screwed...by getting all the money they spent back?

This in the end, because of condition #2, is actually pro passenger.
 
steex
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 5:11 pm

Quoting Roseflyer (Reply 2):
If someone takes advantage of such a loop hole, the airline can still take action like revoking a frequent flyer account.
Quoting enilria (Reply 4):
They *could*, but I think the DOT would look VERY poorly on retaliation for doing something that the DOT specifically says is allowed.

This, plus I wouldn't necessarily care. As FF accounts become less and less valuable to the typical leisure traveler, it's practically a break-even proposition to entirely forego them (and the implied loyalty) in favor of always booking the absolute cheapest ticket available. I don't currently have a single mile with UA; given my hypothetical $80 UA SFO-NRT-SFO trip, I'm looking at earning probably fewer than 100 redeemable miles. I'd gladly exchange my non-existent UA account for $700 off my flight.

[Edited 2015-05-10 10:11:29]
 
USAIRWAYS321
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 5:14 pm

Quoting polot (Reply 7):
The passenger is screwed...by getting all the money they spent back?


The point he was making - correctly - is that airlines are now free to make mistakes and cancel tickets they feel were issued in error. If you're the passenger, however, and make a simple mistake like selecting the wrong date, airlines charge a severe penalty to correct it. The policies are clearly one-sided, and this limited application ruling doesn't change that.
 
dynamo12
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 5:19 pm

The issue is that the DOT got an up close and personal look at some really bad faith purchases, and then folks filed complaints and so they got to look into them.

Basically, navigating to overseas websites, making foreign currency purchases for US based flyers...

No harm to that, but then claiming DOT had jurisdiction and the airline owed compensation was too much.

The DOT 24 hr rule has been an important protection for consumers. I'm looking forward to a number of new consumer protections to come as well - as folks point out, these issues can become very one sided.
 
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LAXintl
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 5:20 pm

Quoting USAIRWAYS321 (Reply 9):
If you're the passenger, however,and make a simple mistake like selecting the wrong date, airlines charge a severe penalty to correct it.

If you make a mistake you have 24-hours to correct it or cancel the ticket on everyone except AA which instead allows you hold an itinerary for free.
In practice even AA if you call them within a few hours of ticketing, they will correct/cancel for you. It happened to me when I booked a ticket with intended dates one-month off entirely.

Seems fair and gives you reasonable amount of time to discover any errors.
From the desert to the sea, to all of Southern California
 
Byrdluvs747
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 6:44 pm

Quoting steex (Reply 8):
As FF accounts become less and less valuable to the typical leisure traveler, it's practically a break-even proposition to entirely forego them (and the implied loyalty) in favor of always booking the absolute cheapest ticket available.

        

I was wondering when someone on a.net would question the declining value of loyalty to airlines. I thought I was the only one.
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masseybrown
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 6:48 pm

Quoting USAIRWAYS321 (Reply 9):
The point he was making - correctly - is that ...

But you said it so much better.  
 
billreid
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 6:54 pm

I am so disillusioned by airlines and their management.
Quite simply the airlines obviously work with the DOT who licenses them through the FAA. So there is a complete and utter conflict in interest.

Under the law if someone makes a mistake and sells a Rolex in a garage sale for $5 the sale stands, yet if the airline makes a mistake because they are poorly managed they are protected by those in government they work with.

How do you spell corruption? LOL
Some people don't get it. Business is about making MONEY!
 
FlyPNS1
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 7:07 pm

Quoting billreid (Reply 14):
Under the law if someone makes a mistake and sells a Rolex in a garage sale for $5 the sale stands, yet if the airline makes a mistake because they are poorly managed they are protected by those in government they work with.

Your analogy doesn't work. The person selling a Rolex for $5 in a garage sale is underpricing purely out of ignorance of the value of the product, not a mistake. The airlines have a pretty good idea of the value of their product and they know a J/F seat on a transatlantic flight is worth a lot more than $100.

I would argue that the airlines should get the same protection as passengers. They get 24 hours to correct fare mistakes. If they don't catch by then, then they have to honor it. With more sophisticated software systems, tracking down and fixing errors should be easier.
 
DDR
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 7:15 pm

Quoting FlyPNS1 (Reply 15):

Agreed. The 24 hour rule should apply to both the passenger and the airline. That would be fair for everyone.
 
Raventech
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 7:24 pm

Quoting billreid (Reply 14):
Under the law if someone makes a mistake and sells a Rolex in a garage sale for $5 the sale stands, yet if the airline makes a mistake because they are poorly managed they are protected by those in government they work with.

The difference is that the service has not been provided yet. The equivalent of that analogy would be the airline trying to get the fare difference after you finished your trip.

An interesting thought would be a tier system for gauging errors
Tier 1 - If the fare is discounted by mistake but is not all that much off, Airline should just eat the loss.
Tier 2 - If the fare is approaching the too good to be true point. Airline allowed to cancel trip with full refund (w/ taxes etc.) and pay non refundable items after ticket purchase (pretty much as what they said above)
Tier 3 - If the fare is so discounted that is screams error and/or requires customer to perform extra steps not ordinarily done in a regular transaction then they can cancel your ticket and only refund ticket + taxes.

The line of thinking is if there is a reasonable chance that it could look legitimate then the airline eats the loss or pays for consumer is made whole. If it fell in Tier 3 then the consumer knew exactly what they were doing and knew the risks, so they are liable if they bought anything based on a ticket they reasonably expected to be cancelled
 
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DocLightning
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 7:26 pm

Quoting Byrdluvs747 (Reply 12):
I was wondering when someone on a.net would question the declining value of loyalty to airlines. I thought I was the only one.

It's been an ongoing discussion. Unless you travel an awful lot for work, there is little point to focusing on your FF accounts.

Oh, they still have their uses, but I'd rather get a credit card like Chase Sapphire Preferred or AmEx where I can take those points and then use them to purchase mileage tickets on any airline. I still have my FF accounts, but I long ago gave up the idea of loyalty to an airline.

For me the point came in 2008. I had saved up enough miles to purchase a R/T J class trip on SFO-SYD on UA...at least according to their award charts. But even eight months out from departure all the J class mileage seats were "already taken" (leaving me to wonder if they'd even ever existed in the first place) and my "free" Y-class ticket wound up being $300, or roughly 30% of what I would have paid if I'd just bought it in cash. I then tried to buy it in cash and use my miles to upgrade only to learn that no mileage upgrades were available. So I purchased my "free" Y-class ticket that was actually just a 70%-off ticket.

I felt deceived and cheated. What was the point of accumulating all those miles on their credit card if I couldn't actually use them as advertised? And so I no longer have the MP Visa. I have a Chase Sapphire Preferred and an Amex Gold and Platinum. That allows me to shop around with my points and figure out what is actually available before I commit those points to an airline's program. I still accumulate miles because it costs me nothing to do that, but I don't live under the illusion that they will ever be any good for anything.
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GA330
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 10:56 pm

Quoting Raventech (Reply 17):
An interesting thought would be a tier system for gauging errors
Tier 1 - If the fare is discounted by mistake but is not all that much off, Airline should just eat the loss.
Tier 2 - If the fare is approaching the too good to be true point. Airline allowed to cancel trip with full refund (w/ taxes etc.) and pay non refundable items after ticket purchase (pretty much as what they said above)
Tier 3 - If the fare is so discounted that is screams error and/or requires customer to perform extra steps not ordinarily done in a regular transaction then they can cancel your ticket and only refund ticket + taxes.

In theory, a very reasonable policy, but that is why it cant be implemented, because theory will not match reality. What is reasonable for you and me will be different for other people.

For example, you mentioned that if the fare is discounted by mistake but not too much off, airlines should eat the loss. However, it would be really hard to define the threshold between too much off and a little off. Is it 10%, 20%, 30%, 35% off? and what shall we use for comparison? a route never has a fixed price, and an airline could offer it for $100 one day and $500 for the next.

Not to mention airlines sometimes have non-mistake fare sales that are actually are approaching too good to be true
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ACKattack
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 11:11 pm

Quoting USAIRWAYS321 (Reply 9):
The point he was making - correctly - is that airlines are now free to make mistakes and cancel tickets they feel were issued in error. If you're the passenger, however, and make a simple mistake like selecting the wrong date, airlines charge a severe penalty to correct it. The policies are clearly one-sided, and this limited application ruling doesn't change that.

That isn't entirely true in the US. On most airlines, you have 24 hours to cancel a ticket without penalty. I found this out earlier this year when I miss booked a US flight by 1 month exactly and realized a couple hours after booking. I was able to call and cancel the ticket without penalty and book the correct dates on a new reservation. I am not sure about WN, as they don't ever charge a change fee.
 
phatfarmlines
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Sun May 10, 2015 11:19 pm

The DOT as of late is applying "poison pill" provisions to its policies. First the DL HND slots, and now this. It seems it's corporate friendly but it really isn't. Great way to play both sides.
 
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hongkongflyer
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 1:50 am

Quoting LAXintl (Reply 11):
If you make a mistake you have 24-hours to correct it or cancel the ticket on everyone except AA which instead allows you hold an itinerary for free.
In practice even AA if you call them within a few hours of ticketing, they will correct/cancel for you. It happened to me when I booked a ticket with intended dates one-month off entirely.

Seems fair and gives you reasonable amount of time to discover any errors.

Fair only when DOT also request airlines to correctwithin 24 hours of the issuance of mistaken fare tickets, which is not the case lor.
 
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flyingturtle
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 9:22 am

Quoting LAXintl (Thread starter):
(1) demonstrates that the fare was a mistake; and
(2) reimburses all consumers who purchased a mistaken fare ticket for any reasonable, actual, and verifiable out-of-pocket expenses that were made in reliance upon the ticket purchase, in addition to refunding the purchase price of the ticket. These expenses include, non-refundable hotel reservations, destination tour packages or activities, cancellation fees for non-refundable connecting air travel and visa or other international travel fees.

1. Mistakes should be impossible, in principle, because fares are not calculated by salesmen anymore, but by computer algorithms. Oh, we gave away tickets for $10? It was a mistake done by the computer! Let's crucify, quarter and burn those who sold us the computers!   

You can feed average loads, cost factors and whatever into your algorithm, and use that as a safeguard against giving away tickets too cheaply. They big legacy airlines might just ask U2 or FR how they prevent losses, as they routinely sell extremely cheap tickets. Their safeguards are obviously working.

So airlines should demonstrate the price was in error. I look forward happily to the that "demonstration" which necessarily divulges at least some of their company secrets.

2. That's fair. Yes.


David
Reading accident reports is what calms me down
 
WorldspotterPL
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 9:50 am

Quoting dynamo12 (Reply 10):
Basically, navigating to overseas websites, making foreign currency purchases for US based flyers...

Is this actually illegal? Or, to put it differently, is it not illegal for airlines to demand different prices for the same product?

Maybe a little off topic - but I thought I'd ask. I am under the impression that I learned at university that it is de facto illegal for airlines to sell the same - for example - FRA-HND one-way ticket at different prices in - for example - Germany and Japan respectively. Of course they still do it, because the markets and customers are different, a Japanese person perhaps has fewer days of annual leave, higher disposable income and is thus willing to pay more for the ticket. What I thought I heard at uni is that it is in fact illegal to sell the tickets at different prices in different sale cities/currencies, however, airlines simply do it because it is practically impossible for anyone to prove because of the real time nature of air fares.

Is this true or nonsense? Sometimes memory is a tricky thing.

Thanks for your insights,
PL
 
jbflyguy84
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 9:51 am

Quoting flyingturtle (Reply 23):
1. Mistakes should be impossible, in principle, because fares are not calculated by salesmen anymore, but by computer algorithms. Oh, we gave away tickets for $10? It was a mistake done by the computer! Let's crucify, quarter and burn those who sold us the computers!   

You can feed average loads, cost factors and whatever into your algorithm, and use that as a safeguard against giving away tickets too cheaply. They big legacy airlines might just ask U2 or FR how they prevent losses, as they routinely sell extremely cheap tickets. Their safeguards are obviously working.

Can you provide an example of where an airline's fare value are automated? I am asking for the specific value tagged to each farebasis, not the bucket being sold.

I know in my airline (and the past 3 that I have worked with), I still determine the prices. I still file the fares each day or week into ATPCo.

Algorithms control my revenue management systems' inventory control functionality, but it certainly doesn't determine the price of an individual fare - just the bucket at which should optimally sold at that point in time.

Note your assumption here wouldn't actually be even a viable solution in many markets - for example, all fares offered for travel to/from/within Japan (and in any currency planned to be sold) has to be filed with JCAB for approval before said fare can be made publicly available.

Oh, and salesmen/women are still a hugely integral part of the airline and heavily involved in the pricing decisions made by the business.

Cheers,
Justin/XW
 
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scbriml
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 10:06 am

Quoting WorldspotterPL (Reply 24):
Or, to put it differently, is it not illegal for airlines to demand different prices for the same product?

I'm pretty sure it's not illegal. I've often seen lower prices for 'reverse' flights - e.g. DXB-LHR-DXB cheaper on BA than LHR-DXB-LHR.
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flyingturtle
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 10:34 am

Quoting jbflyguy84 (Reply 25):
Can you provide an example of where an airline's fare value are automated? I am asking for the specific value tagged to each farebasis, not the bucket being sold.

I'm sorry, I assumed all prices to be calculated in an automated way. There would be no other way to address the various customer bases and the multitude of possible tickets.

I still look forward to how an airline will prove a price was "mistaken". It will turn out funny anyway.


David
Reading accident reports is what calms me down
 
jbflyguy84
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 12:25 pm

Quoting flyingturtle (Reply 27):
I'm sorry, I assumed all prices to be calculated in an automated way. There would be no other way to address the various customer bases and the multitude of possible tickets.

David, please don't be sorry. A lot of people think the same way and I am sure that some day it will be like that, but while the airline reservation infrastructure remains in the 1970's, manual intervention will still prevail - I hope it stays that way else I need to find another job!

Definitely, I am with you, I also look forward to the interesting and creative stories to prove a mistaken fare... unfortunately blaming fat fingers won't work anymore!

Justin/BKK
 
hohd
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 1:38 pm

24 hour cancellation rule does not apply to booking tickets with foreign carriers for travel from US. Each carrier sets its own rule, it could be a few hours or few minutes to none. Southwest generally honors 24 hour refund rule also, but one needs to call.
 
kalvado
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 1:55 pm

Quoting LAXintl (Reply 11):

If you make a mistake you have 24-hours to correct it or cancel the ticket on everyone except AA which instead allows you hold an itinerary for free.

I would definitely want to see 24 hour limit as well - I do not want to see my fully legitimate $400 round-trip being cancelled as "mistake" just because they can sell same seat on a full flight for $2000 right before departure
And I don't want to see "mistake" to become a synonym for "overbooked".
 
Rdh3e
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 2:03 pm

Quoting hohd (Reply 29):
Southwest generally honors 24 hour refund rule also, but one needs to call.

All US airlines are required to refund within 24 hours.
 
czek6
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 2:21 pm

So how would this actually work? Two different people just booked a flight on a stunning fare. How will the airline know the rest of their travel plans and if they are staying at a prepaid hostel or the Four Seasons? Or if they've booked tours or other packages? I guess if the airline starts asking questions, it's time to worry.

Otherwise, I guess they'll develop some formula that calculates estimated loses based on the trip duration.
 
PanAm1971
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 2:29 pm

Simple-if the fare looks to good to be true, it probably is. Use good judgment. Adults in the modern age should know that you don't get something for nothing just because the internet told you so. Now the DOT is underlining that while, at the same time, giving consumers a measure of protection for errors made by the airline.
 
Flighty
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 2:34 pm

Quoting PanAm1971 (Reply 33):

Simple-if the fare looks to good to be true, it probably is. Use good judgment.

That's right. Don't trust the prices, always hesitate to purchase tickets.

Fact from the financial world -- if a ticket isn't a guarantee, it has a much lower VALUE to the customer. All tickets should cost less, if the ticket isn't a commitment.
 
jreuschl
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 2:36 pm

Quoting hohd (Reply 29):
Southwest generally honors 24 hour refund rule also, but one needs to call.

Also, on WN you can cancel the flight after 24 hours and keep the funds for a year in your account from booking.
 
Osubuckeyes
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 2:43 pm

Quoting PanAm1971 (Reply 33):
Simple-if the fare looks to good to be true, it probably is. Use good judgment.

Many of us have taken advantage of fares that are "too good to be true" but as it turns out sometimes it is just a very aggressive fare sale.
 
PanAm1971
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 2:44 pm

Quoting Flighty (Reply 34):
Fact from the financial world -- if a ticket isn't a guarantee, it has a much lower VALUE to the customer. All tickets should cost less, if the ticket isn't a commitment.

While I get your point I would argue that consumers get an incredible value from most airlines. The net revenue the airlines earn for each passenger is a very small sliver after all the costs involved. The airlines have a reasonable expectation of some protection from the something for nothing crowd, those who seek to take advantage of loopholes and the gotcha crowd who seek to gain advantage from obvious (and very human) errors committed by airline employees.
 
PanAm1971
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 2:46 pm

Quoting osubuckeyes (Reply 36):
Many of us have taken advantage of fares that are "too good to be true" but as it turns out sometimes it is just a very aggressive fare sale.

If I see $200 LAX-SYD round trip I'm probably going to verify that before I purchase the ticket. I think that's reasonable.
 
MIflyer12
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 3:11 pm

Quoting hohd (Reply 29):
24 hour cancellation rule does not apply to booking tickets with foreign carriers for travel from US.

That is incorrect. Scheduled service by foreign carriers to/from the U.S. is covered. See CFR 259.2

Quoting rdh3e (Reply 31):
All US airlines are required to refund within 24 hours.

That is incorrect. The DOT mandates a 24 hold in advance of purchase (used by AA) or 24 hour post-purchase refund for flights booked seven days in advance of travel. Time to process the refund may exceed 24 hours.

More broadly as to references under U.S. law, the Uniform Commercial Code governing (most other) business transactions allows for correction of mistakes. The thread points out some problems with the approach DOT has outlined but DOT's view is broadly consistent with U.S. law.
 
kalvado
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RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 3:31 pm

Quoting PanAm1971 (Reply 33):
Simple-if the fare looks to good to be true, it probably is. Use good judgment.

Many people over here say that airline pricing is not related to actual expenses or anything else, but rather "what market from A to B can bear"
Without doing quite a bit of research, I (as a not so frequent flyer) have no way of knowing if my destination is a "fortress hub" where I am expected to pay a fortune, or an aggressive "grab a market share". I know, however, that incremental cost of 200 pounds in a seat on 737 is something like $20 for a long flight, so a transcon round-trip for $50 (+ taxes and government fees) is not a straight loss compared to that seat going out empty. And I heard something about Ryanair $5 tickets...
Bottom line - I have little, if any, expectations when I look up the flight price. So "too good to be true" is a meaningless criteria.
 
Osubuckeyes
Posts: 1883
Joined: Mon Mar 01, 2004 10:05 am

RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 3:35 pm

Quoting PanAm1971 (Reply 38):
f I see $200 LAX-SYD round trip I'm probably going to verify that before I purchase the ticket. I think that's reasonable.

$360 SFO-DUB and $500 LAX-PEK seemed too good to be true for me and would for many others. Yet they were not publicized as mistakes nor were they.
 
Flighty
Posts: 9963
Joined: Thu Apr 05, 2007 3:07 am

RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 3:45 pm

Quoting PanAm1971 (Reply 37):
that consumers get an incredible value from most airlines. The net revenue the airlines earn for each passenger is a very small sliver after all the costs involved. The airlines have a reasonable expectation of some protection from the something for nothing crowd

You are talking about some of the largest, most profitable corporations in the world. You expect me to agree with you? After pricing tickets in the illegal trans-Atlantic monopoly racket this summer, with rampant 250% profit margins? Well I don't.

Quoting PanAm1971 (Reply 37):
obvious (and very human) errors committed by airline employees.

Does that mean I can cancel my tickets at any time? I'm human, too. And I am the customer!
 
airlineecon
Posts: 102
Joined: Sat Feb 24, 2007 4:22 am

RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 4:15 pm

Shame on the DOT. There is no such thing as a "mistake" fare. The airline's pricing algorithms are very sophisticated. All prices come out just as the algorithms intend. Consumers are becoming just as sophisticated. They quickly react to price changes. Airlines shouldn't be allowed to renege on transactions just because demand conditions didn't turn out as they hoped.

24 hour cancellation is only for domestic itineraries. There are no DOT guidelines about overseas fares.
 
billreid
Posts: 761
Joined: Fri Jun 23, 2006 10:04 am

RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 4:44 pm

Quoting FlyPNS1 (Reply 15):
Your analogy doesn't work. The person selling a Rolex for $5 in a garage sale is underpricing purely out of ignorance of the value of the product, not a mistake. The airlines have a pretty good idea of the value of their product and they know a J/F seat on a transatlantic flight is worth a lot more than $100.

Yes it is worth more. The problem is somebody removed the "blocks" on the computer-program that prevent the price from going below a certain level, and that has to be intentional! Revenue management also frequently overprices tickets through mistakes, who protects the consumer on that behalf? If revenue management makes a conscious decision to remove the "stops" it is a stupid mistake that everyone in revenue management knows shouldn't happen.
The only way to prevent this occurrence is to make the company responsible for its mistakes.

Quoting Raventech (Reply 17):
he difference is that the service has not been provided yet. The equivalent of that analogy would be the airline trying to get the fare difference after you finished your trip.

No the equivalent would be the federal government, in every store in the nation, making sure the sales associate didn't make a mistake on a single priced item. If you think for one moment that mistakes aren't made millions of times every day in every industry then you are grossly mistaken.

The only way to protect from wrong pricing is to police yourself and resolve your own internal problems.
Isn't there risk in business? Shouldn't a well run business do its best to risk mitigate? Or do we simply rely on our Government buddies to bail us out of our stupidity?
Some people don't get it. Business is about making MONEY!
 
Rdh3e
Posts: 3634
Joined: Wed Mar 30, 2011 2:09 pm

RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 5:27 pm

Quoting PanAm1971 (Reply 38):
If I see $200 LAX-SYD round trip I'm probably going to verify that before I purchase the ticket. I think that's reasonable.

I mean, I'd say screw it and buy it. But just don't get mad when it gets cancelled / refunded.

Quoting Flighty (Reply 42):
You are talking about some of the largest, most profitable corporations in the world.

Airlines are nowhere near the most profitable corporations in the world.

http://247wallst.com/special-report/...ofitable-companies-in-the-world/2/
http://www.forbes.com/global2000/list/#header:position

Quoting Flighty (Reply 42):
fter pricing tickets in the illegal trans-Atlantic monopoly racket this summer, with rampant 250% profit margins? Well I don't.

Huh? Sources? You're living in fantasy land my friend.

Quoting airlineecon (Reply 43):
Shame on the DOT. There is no such thing as a "mistake" fare. The airline's pricing algorithms are very sophisticated. All prices come out just as the algorithms intend.

Actually there are. Some fares are still managed manually. In addition, the files used to upload into the GDS systems can be corrupted, causing decimals to shift and crazy (high and low) fares to show up.

It's happened to all the majors over the years and it will happen in the future. They are mistakes and should be acknowledged as such.
 
CHA5Departure
Posts: 29
Joined: Thu Oct 23, 2014 12:39 am

RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Mon May 11, 2015 5:48 pm

Quoting WorldspotterPL (Reply 24):
Quoting WorldspotterPL (Reply 24):
Maybe a little off topic - but I thought I'd ask. I am under the impression that I learned at university that it is de facto illegal for airlines to sell the same - for example - FRA-HND one-way ticket at different prices in - for example - Germany and Japan respectively. Of course they still do it, because the markets and customers are different, a Japanese person perhaps has fewer days of annual leave, higher disposable income and is thus willing to pay more for the ticket. What I thought I heard at uni is that it is in fact illegal to sell the tickets at different prices in different sale cities/currencies, however, airlines simply do it because it is practically impossible for anyone to prove because of the real time nature of air fares.

I wish! It sickens me how much cheaper my German relatives can purchase Europe-USA-Europe tickets on pretty much any airline website compared to what it costs to purchase USA-Europe-USA tickets on the US site for the exact same arlines. We are talking hundreds of dollars cheaper.
 
Viscount724
Posts: 19316
Joined: Thu Oct 12, 2006 7:32 pm

RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Tue May 12, 2015 1:34 am

Quoting CHA5departure (Reply 46):
It sickens me how much cheaper my German relatives can purchase Europe-USA-Europe tickets on pretty much any airline website compared to what it costs to purchase USA-Europe-USA tickets on the US site for the exact same arlines. We are talking hundreds of dollars cheaper.

You can partly blame the strong U.S. dollar. Almost everything priced in U.S. dollars is more expensive in most other currencies today than a year ago.

A major factor in airline pricing is considering how much the origin market can bear.
 
jbflyguy84
Posts: 124
Joined: Sat Mar 28, 2015 3:30 pm

RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Tue May 12, 2015 2:13 am

Quoting airlineecon (Reply 43):
Shame on the DOT. There is no such thing as a "mistake" fare. The airline's pricing algorithms are very sophisticated. All prices come out just as the algorithms intend. Consumers are becoming just as sophisticated. They quickly react to price changes. Airlines shouldn't be allowed to renege on transactions just because demand conditions didn't turn out as they hoped.


Please see my post above - algorithms in the revenue management system only determine the fare bucket that is being sold based on the fare or fares filed in each bucket. Through the processing of the algorithm in the revenue management system, an optimal price to be sold is the result. The RM system then matches the optimal price to the closest bucket available where that price is loaded/filed. If that happens to be a mistake $10 fare because the pricing/fare filing person forgot those extra 1 or 2 zeroes, then the $10 fare will sell. The inverse is also true, if that same $10 fare is filed, but the RM algorithm produces a higher optimal fare, then the system will sell the bucket that is still closest to it and ignore the $10 fare until such time the data set of the algorithm changes. This is why ghost fares are so dangerous in airline reservations systems.

Fare construction and filing is still a heavily manual task completed in either or both the airlines PSS and ATPCo (Airline Tariff Publishing Co.). Human error unfortunately is still an inherent risk in this process.

Cheers,
Justin/BKK
 
nonrevman
Posts: 1265
Joined: Mon Nov 19, 2001 6:33 am

RE: DOT: Airlines Dont Need To Honor Mistaken Fares

Tue May 12, 2015 11:44 am

Quoting kalvado (Reply 30):

Could an airline now cancel your ticket as a "mistake" if they have seller's remorse? Possibly so. Will they actually go through with it? My guess is probably not. They have no way of knowing what else you have bought associated with that ticket, and eventually, they would step on the wrong set of toes and be brought into court.

Just like you, my big worry would be buying a vacation package for my family months in advance, and then a couple of weeks before the trip, getting a call from the airline that the fare was a "mistake", and I have a choice of paying $2000 more for the tickets, or they could refund the trip. If this actually happened to someone, the burden is really going to be on the consumer. If they want to contest this, they will have to contact the DOT and go through the red tape. If they elect to cancel, they are going to have to mail or fax copies of every travel item they paid to the airline to get it refunded, and then it is a potentially long waiting game to see your money again.

According to the terms, the airline has to prove the fare was a mistake to the DOT. Hopefully we will not be soon reading a Yahoo article about a family who got their trip cancelled over this scenario.

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