No one likes to see an airline in bankruptcy, except maybe bankruptcy lawyers. But the least you’d expect is for a carrier in Chapter 11 to honor a fare. Maybe that’s asking too much from Sun Country Airlines.
Here’s what happened to Betty Hackbarth when she tried to book a flight from Minneapolis to South Padre, Tex.
I booked a ticket through a travel agency for $266. I gave the agent my American Express card and printed the confirmation.
A few days later, I received a call saying that the ticket price had gone up to $455, and that I would need to pay a price difference. I said that can’t be, because my family can’t afford more, plus I already have the confirmation that it was charged to my credit card.
How can they do that?
I suggested that Hackbarth ask the travel agency for details. Why would a ticket price almost double after the ticket was issued? She did.
They said that the reason they couldn’t honor the posted amount is because Sun Country pulled their posted contract amount because they are in bankruptcy. Personally, I believe they are just blowing smoke, and should have honored the posted amount.
Maybe some of the travel agents who read this blog can shed some light on this case. If a bankrupt airline pulls its contract rates with an agency, is it allowed to retroactively reprice tickets? Do passengers have any recourse when they do?
I think Hackbarth should contact American Express. Her card should offer some protection against this type of repricing — bankruptcy or not. Failing that, she may want to consider legal options.
And she definitely needs to let the Transportation Department and the Federal Trade Commission know what happened to her.
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{ 7 comments… read them below or add one }
Of course they can’t change the price. A product was bought, paid for, and now service needs to be delivered. That is what a purchase comprises. You can’t go change the deal after you agreed to it.
This is one of the first times that an airline complains that somebody paid too early.
I’ve been a reservation sales agent for NWA for 10 years and have never heard of this happening. Once the ticket is purchased, the fare is guaranteed. This then becomes a binding contract between the customer and the airline. As long as the customer does not make any changes to the ticket, there should be no changes with this domestic fare.
Also, for your information, this airline will not do a refund if your fare goes down and you request a refund. Some of the major airlines still do, minus any fees if they apply. BUYER BEWARE nowadays!
She could sue Sun Country Airlines, but not for very much. A cursory glance at their contract of carriage doesn’t show any circumstance where Sun Country specifies it can not honor a fare, meaning when her travel agent bought the ticket, she had a contract that Sun Country could not back out of. I don’t know bankruptcy law, but I doubt bankruptcy courts allow going operations to continue to enter into contracts, only to use their Chapter 11 protection to keep them from honoring their part of the contract.
However, her only remedy is to “cover”, meaning she should buy a ticket on another airline and sue Sun Country for the difference in small claims court. Or sue for that amount, plus whatever MN’s consumer protection law might allow for an unfair or deceptive practice.
Good luck suing Sun Country. It’s parent company, Petters, Inc., is circling the drain, due in no small part to its CEO’s ponzi scheme and ensuing legal troubles. The company’s creditors will no doubt be trying to get their share before Petters, Inc., blows away into the wind. If you plan litigation, better take a number and get in line.
You can’t just sue a company in bankruptcy. There is an automatic stay in place. Hackbarth would have to file a Motion in BK court to lift the stay for her lawsuit which isn’t going to happen (unless there were some insurance policy involved to cover her claim which I highly doubt).
Hackbarth needs to contact AMEX and dispute the bill. AMEX is pretty fair about chargebacks.
I agree that the traveler’s recourse would be to dispute the credit card charge. If the airline weren’t in bankruptcy, or if the claim is against the travel agency rather than the airline, there would be the possibility of a lawsuit in small claims court. (Many claims against airlines are “preempted” by Federal law, and require a prohibitively expensive, and slow, Federal lawsuit. But I think this claim could be pursued in local (state law) small claims court.)
There are 2 other issues, however:
(1) Against whom should she make her claim? Look at the credit card statement, and see if the charge was made by the agency or the airline. (This may also help clarify what happened, and why. Even as a former travel agent, I’d need to know before I could make an educated guess at what happened and why, although i can say that airlines claim the right to change both published fares and consolidator contract prices without prior notice to travel agencies.)
(2) Even if a lawsuit is possible, you almost certainly can’t force them to honor the fare (“specific performance”). All you can get from the credit card company is your money back, and all you could get from a lawsuit would be money damages (presumably equal to the cost of an alternate ticket). So if you are still planning to take the trip, buy another ticket (from another agency and airline, presumably), before it gets any more expensive than necessary.
The only possible way this makes sense is that the original agent at the agent issued against a contract price after it expired, and the agency was threatened to have to make up the money themselves.
In talking to agencies, one must realize that they have some form of responsibility. We have spoken to people who bought tickets through agencies that were not cancelleable, yet were told they could cancel and get a credit, and to use this credit, they should call the airline, which promptly informed them they had no ticket, and advised them to go after the agency, which advised them incorrectly.