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Should airlines honor low fares that are obvious mistakes?

January 31, 2010

Royce Smith planned to visit Sydney during spring break to attend an arts festival and work on a book, when he found an unbelievably good fare on American Airlines’ Web site: A round-trip ticket from Wichita to Sydney for just $1,198.

In first class.

“I jumped on the deal,” said Smith, an assistant art professor at Wichita State University. “I entered credit card details and double-checked American’s booking code to ensure that first class was indeed what I was purchasing. Everything indicated a confirmed seat in first class.”

He shouldn’t have believed it.


Four days later, an American Airlines representative phoned Smith with some bad news: The fare was a mistake. He could either pay the difference between the real first-class fare and what he’d paid — $11,000 — or get bumped down to economy class at no extra charge. The airline also offered a $200 transportation voucher for his trouble.

“Can an airline step out of such an error so freely when it holds its passengers to such rigid rules regarding cancellations, overweight baggage, and late arrival to the airport?” he asked.

The airline believes it can.

“We fully believe customers should have recognized the fare that was very briefly offered as being an obvious error that is simply too good to be true versus the normal price of approximately $20,000 round trip for a first-class fare from the U.S. to Australia,” said Tim Smith, a spokesman for American. “Your customer admits that he thought it was an excellent, even fantastic price, even for first class, so that should have drawn some suspicion on his part. Apparently it did not.”

But this is not a story about whether a travel company should honor an erroneous price. I’ve already written that article, and I have the burn marks to prove it. Instead, I wondered whether there was anything a passenger like Smith might have done to spot this fare error before he began to entertain thoughts of crossing the Pacific in style.

I looked up the fare from Wichita to Sydney, and Royce Smith’s fare was low, even by economy-class standards. American believes that the too-good-to-be-true litmus test must be applied to all fares, which is something I’ve heard from other companies caught in a price-error quandary.

That would make sense — if travel prices made sense. But they don’t. When carriers such as Spirit Airlines sell tickets for $1, a reasonable traveler may conclude that a $1,198 fare to Australia is not so unreasonable.

Is there a better way to know? Maybe. Mark Mannell, who follows pricing errors in the car rental industry as the chief executive of CarRentalSavers.com, says that he turns to the Internet to determine whether a deal is legit. “The best source for me are the travel and discount forums,” he said.

Among them are sites such as Slick Deals and Fat Wallet, where bargains are often vetted by users or editors. He also frequents such travel-specific sites as TripAdvisor and Flyertalk, a popular discussion board for business travelers.

But these Web sites are a mixed blessing, at least in my experience.

Although they can identify honest-to-goodness sales, they’re sometimes also breeding grounds for malcontents. I’ve run across travelers who feel that a company should honor any fare error, no matter how outrageous, and who don’t think twice about booking blocks of rooms or several tickets at a wrong price.

Not only do I find that ethically problematic, but it also makes matters more difficult for passengers like Smith, who only buy one ticket. A travel company with a bona fide fare slip-up is far less likely to make good on its mistake when it believes that customers are trying to take advantage of it.

Put differently, don’t believe everything you read on the forums. And don’t be too quick to join other participants in an e-mail campaign to persuade a company to honor an erroneous fare or rate. You may not be in the best company.

In the end, the one tool that you can truly rely on is your own common sense. If your gut tells you that there’s something wrong with a price, chances are there is. Sadly, common sense is in short supply on some online forums, where travelers devour every deal faster than a cloud of hungry locusts descending on a hapless farmer’s crops.

One more thing: When pricing errors happen, there are no winners.

Smith, for his part, is rethinking his loyalty to American Airlines.

“As a professor, I traveled over 200,000 miles with American last year, took students on three international trips on American, and had planned to use American for future travel needs,” he told me. “If they are making these decisions from a purely economic point of view, it would seem that they are threatening a much larger pool of current and future income than by simply admitting their mistake and letting me fly in the cabin I booked.”

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

100 comments

  • Alan Gore

    In the travel business, the general rule is “Heads we win, tails you lose.” Airlines are not required to honor fat-finger fares they post by mistake. But if the passenger makes an error, he gets to pay and pay.

    Next time you want to get away, vacation somewhere you can drive to.

  • Liz

    Of course they shouldn’t – although I’m at a loss as to why this seems to happen so frequently in the airline industry. You don’t generally see these types of pricing issues at say, Amazon.

  • http://www.aspendew.com AspenDew

    My husband flew business class from Glasgow to Adelaide this summer for £2700 RT on British Airways. We’ve seen some pretty low fares from time to time – admittedly usually for business class, not first class, and not on American. Even so, I think if we’d seen this fare, there’s a good chance we’d have believed it was legit just like the professor did.

  • Dave

    When a traveler mistypes his own name, an obvious mistake, the airlines do not let him correct it without a price. As long as this remains the case the airlines must also bear the responsibility for their obvious mistakes.

  • Glenn

    Hey, after all the occurrences, you would think the airlines should have implemented some sort of QA or fail-safe to insure against fat-fingered fares. Having a second person double check, or even computer software should recognize extreme deviations from the norm that haven’t been given appropriate managerial override. Such a system is easy and inexpensive to implement.

    If an airline does not desire to implement such a fail-safe system, then I believe they should be legally bound to honor ALL fat-fingered fares.

    (And, no, I have never found such a fare, nor been burned by one, so this is not a vent :-)

  • MarkieA

    I’ve said it before and I’ll say it again, Chris. When Common Sense rules on BOTH sides of the equation, then I’ll agree with you. Common Sense tells you that “Elizabeth J. Lastname” is the same as “Betty J. Lastname” or “Beth J. Lastname”. But the airlines would have you pay $150 to make that correction. Common Sense tells you that you can’t make a 30-minute layover connection at LaGuardia at the other end of the airport, but if the airlines schedule it, you’re screwed if you miss it. How many articles have you written in the past 5 years that decry the lack of Common Sense on the part of the airlines, all in the name of profit? Policies and procedures that make no sense whatsoever, designed only to enhance the bottom line. Are you seriously trying to tell us that these “errors” are “honest mistakes” that the airlines readily correct when confronted with Common Sense? Do unto others……

  • Cynthia

    I think some of this attitude/behavior stems from the many laws that have governed retail in most of our states but which may not apply in cases such as this. Laws that state that an item must scan at its marked price are one example. I believe many states also have rules or laws that state the shelf price must agree with the sticker price and if not it is the lower of the two that prevails.

    All that aside I think there is room for both consumers and businesses, in this case the airlines, to be more flexible. I’m also a skeptic where ‘web’ prices are concerned–even on reputable sites–due to the incredible range and number of rules that are often attached to them. Perhaps the best answer is that in doing one’s ‘due diligence’ one needs to have an idea of what a ‘normal’ fare is for a routing and put the discounts in context . . . and remember the old saw that “if something sounds too good to be true it probably is.”

    Perhaps once an unbelievable booking is found, or made, one should then double check it by calling customer service to verify because ultimately they’re the ones who are going to approve or reject your fare.

  • roycesmith

    As I said on the Washington Post’s website, I was surprised by the tone of this article–suggesting that flyer forums were the source of my information regarding this airfare (and that I colluded with other frequent flyers to pull one over on AA) is simply not true. I only signed up for FlyerTalk once AA was threatening to pull the plug on the airfares and I wanted to know how to respond (ethically and legally). I agree, also, with a poster at the Post’s website who said he/she couldn’t believe that Chris was suggesting that passengers now vet every single “deal” on the net BEFORE they buy. Is that really my responsibility? I thought this was going to be an article that would raise awareness and be in the spirit of strong consumer advocacy. Instead, it makes me look like I lack common sense, that I should have known better–in essence, it’s almost like American’s spokesperson, Tim Smith, wrote all the talking points here. Most people I have spoken with feel this is an excellent example of how airlines run roughshod over passengers–nickeling and diming them to death at the airport AFTER they lure them to purchase fares that MANY, MANY times could be classified as “too good to be true”–as Tim Smith smugly suggested in his comments to Christopher’s inquiry. Where was the consumer advocacy in this article? American gave Christopher the stock-standard script that they gave EVERY media mogul who asked about this “error.” I would have thought there would have been far more push to work toward a far more consumer-oriented solution. I am disappointed to see this was not the case.

  • Jake

    I think you hit the nail on the head when you said “That would make sense — if travel prices made sense. But they don’t. When carriers such as Spirit Airlines sell tickets for $1, a reasonable traveler may conclude that a $1,198 fare to Australia is not so unreasonable.” Because airlines continue to play fare games (no pun intended), the so called “too-good-to-be-true litmus test” doesn’t really apply – how is a traveler to know if the price is too good to be true, or if it’s just another airline pricing shenanigan? Perhaps the airline had tried some new unbunling, removing landing gear, breatheable oxygen, the cabin pressure surcharge, and the like, the customer thought they’d all be tacked on at the final screen? Since they’re not required to fully disclose the price of the ticket up front how many hoops do they really expect their CUSTOMERS to jump through to 1) Determine the final price, and 2) Make sure that they have properly priced their product? Right now Southwest is (legitimately) offering $50 one ways from KC to Milwaukee…simply extrapolating the distance at price per mile wouldn’t that make the Wichita/Sydney flight overpriced? Ultimately I’d say the airlines reap what they sow…if they quit playing games with their customers, their customers would probably be more understanding of legitimate mistakes.

  • roycesmith

    I’ll add one more point….even the title of the article which heralds my situation as an “obvious” mistake belies what Christopher actually says about airfares these days–which is that airlines themselves have contributed to a climate where consumers look for the best deals and try to get the best quality product for the least amount of money. If this is the case, how was my airfare an “obvious” mistake?

  • http://nodebtworldtravel.com brian

    Why should a flier be responsible for determining if a fare posted on an airline’s website “makes sense”?

    Why should I have to go out and research to see if a deal is legit when by the time I come back, the deal may be gone? If I saw that fare, I would pounce too.

    In an age when airlines offer incredible deals every week to fill seats, $1200 round trip to AUS sounds fantastic BUT not out of the realm of possibility, even if it was in first class.

  • http://www.alaskatravelgram.com Scott McMurren

    Mistakes happen. But it’s amazing how many “mistakes” are no such thing. Airlines routinely use ridiculous fares to bully competitors with little or no notice. Often, they do not even have any corresponding flights to match the fares.
    Further, a $1,200 fare is not ridiculous, given the $600rt fares we’ve seen between LAX and SYD. Wichita is a different story–but it’s not out of the question.
    The other side of the “ridiculous” coin is that airlines charge way too much between select markets, adding insult to injury with extra fees and onerous restrictions.
    Honestly, there are so many fares that change all the time–there’s precious little that truly qualifies as “ridiculous” aside from the flak-blather that comes from the mouths of airline corp-news-readers.
    IMHO, American is missing an opportunity. But I’m not surprised–the carrier has missed so many in the past with striking regularity.
    American can’t be serious–how much fact-checking do we have to do in this new DIY environment? They should cough up the phat seat for the good professor–he’ll be a raving fan for a million years.

  • David Z

    American Airlines did admit their mistake. They’re just not willing to eat the cost of that mistake, although they tried to “compensate” for that. (which of course isn’t enough…)

    Incidentally, China Eastern had that same dilemma:

    http://www.busrep.co.za/index.php?fArticleId=5325359&fSectionId=552&fSetId=662

    They chose to honor the rates sold. Of course, it depends what the airline can afford to do…and lose.

  • Scarlett

    Let’s say Walmart makes a mistake and list a TV at a too-good-to-be-true price. If a customer walks in and demands the price, they have to sell it to them if they haven’t already posted a retraction. It happens all the time, stores making pricing errors on goods, and then customers benefiting from them. I worked in retail at one point, and if we posted the wrong price for something and the customer demanded the price shown, we had to give it to them. It’s not just a store policy, it’s a law. Why, then, are airlines allowed to make the same mistake and not be held to the same standard? It’s American’s responsibility to ensure that their fares are published correctly, and until they post a retraction, they should be obligated to honor the price. It irks me to no end in the current state of affairs with airlines holding us over a barrel, charging for LUGGAGE (who doesn’t fly with luggage? – I’m surprised we haven’t been asked to pay for the air they filter in the cabins…) they can’t be held to the same standard. Just one article before this one, a gentleman typed the wrong letter in his wife’s name, and a name change can’t be made. Seriously? One letter. It’s outrageous. American should have honored the fair, learned the lesson, and made sure it didn’t happen again. Ridiculous.

  • JS

    No, in my opinion, American Airlines should not. Contractually, they are not obligated to, in my reading of their website:

    The Content may contain inaccuracies and/or typographical errors. American Airlines may alter, change or improve the Content at any time and without notice. American Airlines makes no representations or warranties as to the Content’s completeness or accuracy, and makes no commitment to update the Content. American Airlines makes no representations about the Content’s suitability for any purpose.

    YOU USE THE SITE AT YOUR OWN RISK.

    http://www.aa.com/i18n/footer/legal.jsp

    I’m one of those who reads the long fine print on the back of contracts before signing them, and I realize that I’m taking a risk if I engage in a contract without reading that fine print.

    So it’s unfortunate for Professor Smith, and possibly a serious mistake on AA’s part, as he is rethinking his business with AA, but that’s AA’s apparent legal right. I’m not a lawyer, but it would appear that AA has a loophole. Travelers of AA do not have such a loophole.

    However, if AA acts in a consistently poor manner and treats customers badly, they’ll go out of business eventually or go bankrupt. Personally, I will not purchase tickets to fly on United, since I had a very bad experience with them years ago. I was quite happy to see them go bankrupt, actually.

    So we consumers have power, too. If we don’t like an airline’s policies, we won’t fly on them, and they’ll go bankrupt. So yes, AA has the power now, but if they continue to promise first class tickets and then bump people down to coach, after a while people might start boycotting AA.

    Personally, I don’t care. I prefer Southwest!

  • EricR

    I just got a fare from Air New Zealand for less than $2,500 for Premium Business Class (their highest cabin since ANZ doesn’t have First Class any more) from LAX to LON and back. Before I booked the fare, I called the airline first to verify the price, and I was told it was a real fare.

    While $1,200 is low, I think a reasonable person could think that was a real fare. It *is* over $1,000 after all, not like those accidental $1 or $100 fares I’ve read about previously. How is a customer to know whether a great deal is a surprise promotion (like I found for ANZ) or a mistake? American should have honored that fare.

  • Sahsa

    First I seriously doubt that an “Assistant Art Professor” travelled over 200,000 miles last year. Further I believe that he knew very well that the fare was an error and therefore either should have not booked it or should have expected some kind of correction. American Airlines did him a great favor by offering what it did to help rectify the problem and he should be grateful for that. If this is the kind of moral standard that Wichita State University accepts from its employees, then I am very glad that I don’t have children in that school. As far as his threat of transferring his loyalty, he probably travels on American, when he does in fact travel, because of his own convenience. Something he is not likely to give up.

  • Abhi

    Here we go again !! Make over of the BA disaster in a smaller proportion. I agree that it’s unreasonable to expect an airline to offer the mistakenly put fare once it realizes the mistake, but for the sake of law if there is any, there should be a binding on the airlines to offer some sort of compensation ACCEPTABLE to the victimized customer.

    Such a compensation could be to offer a ticket to the affected customers at the lowest price available for the same travel over a span of 365 days, immediately preceeding the date of purchase or actual cash amount (not voucher) of not more than half the price of the actual cost of the travel (not the ticket price). Now it should be up to the passanger’s good will to allow the airlines any ‘one time’ waivers on these terms just like the airlines do, every once in a thousand times.

    I very well understand why Chris is of the opinion that customers should be able to recognize the mistakes airlines make in putting up the fares online and he has helped many customers avoid the penalty of their own mistakes. My only expectation from the airlines is that the customer should not be left high and dry in such situations to either buy the full price ticket or cancel the ticket as many other bookings (such as hotels/appointments/other travel arrangements) get affected in addition to the personal discomfort and extra efforts required to find alternative arrangements and credit card refund delays.

  • Carly

    As someone who has never before (really- NEVER!) looked for fares from North America to Australia, $1200 would not immediately strike me as an “obvious mistake”, first class or economy. Without exception, everyone always has a first time looking up a fare from one destination to another; it is ridiculously illogical for airlines to expect that every time a customer searches for a fare they have done prior comparison shopping.

  • Carver

    Let’s deconstruct the good professor’s story.

    1. He flew 200,000 miles last year
    2. He made at least three international trips last year
    3. He admits his suspicion
    4. The trip was for spring break, several months out.
    5. He got the bad news a mere 4 days after purchase

    Conclusions

    Facts 1-3: The professor is an extremely seasoned, well educated traveler
    Facts 4-5: It is extremely unlikely that the professor suffered any detriment due to American’s error. Its not like the window for getting cheap seats has closed. He doesn’t suggest that the prices have increased.

    Basically, the professor wants to take advantage of American’s error, although he himself suffered no detriment. I see that as opportunistic and unethical.

    Now, if we give the professor the benefit of the doubt and believe that he really believed the fare was legit, then he would be in a stronger position had he suffered some detriment. E.g., suppose he had purchased the ticket with 2 weeks advance purchase and the two week advance purchase window had closed. Then AA would ethically owe some flexibility.

    But the undisputed facts (#1-5) strongly suggests that the professor is merely pissed because he can’t fly First Class subsidized by American’s error.

  • Christopher Elliott

    @roycesmith I’m sorry you were disappointed with my story. I was unaware that you had joined FlyerTalk.

  • Jeremy Portzer

    I’m not sure if this really changes the discussion, but it’s worth noting that American Airlines does not actually offer service to Australia. They only offer codeshare tickets on their OneWorld partner, Qantas, Australia’s flag carrier. I think this means that if American were to honor the incorrect fare for Mr. Smith, they would have to pay out the difference in cold, hard, cash to Qantas, who is actually providing the service. It would be hard for any airline in these economic conditions to justify that kind of payout just to save one frequent flyer. That said, maybe they could have offered Premium Economy (Qantas’ service here is almost as good as business class on US carriers) as something with more value than the $200 voucher.

  • Raven

    I have a hard time believing that Prof Smith flew over 200,000 miles on American Airlines last year and is so upset over this fare mistake. Someone who flies that many miles on a single carrier would be knowledgeable on how much various fares typically cost. Secondly, if he had flown over 200,000 miles, he would be an Executive Platinum, the highest tier of American’s frequent flyer program. That would have made him eligible for upgrades, through the use of systemwide upgrades or by using his accrued miles to pay for an upgrade.

    That said, American’s offer to allow him to fly the class of service that fare should have booked into plus a $200 voucher is not entirely unreasonable provided that it is an upgradeable fare. In that case, Prof Smith need only use the upgrade method he prefers, and having accrued 200,000 miles in a year, that shouldn’t be too difficult.

  • roycesmith

    It’s nice to see some people making ad hominem attacks on me–even though they only know me based on what someone else wrote. So Carver wants to call the good professor unethical and opportunistic? Ummm, and airlines AREN’T? Isn’t capitalism fundamentally about opportunism–again, I say finding the highest quality product for the least amount of money? I am heartened that this situation makes sense to alot of people who posted here. The hypocrisy underlying the situation is amazing–how an airline extracts and extracts and extracts from its passengers, creates an environment of competition that is based on the very believability of unbelievable fares, and then fails to bite the bullet when it is they who err. Some may say American did enough by offering a $200 voucher, but in my opinion, they haven’t. Airlines, especially it would seem American, need SERIOUS oversight as their sheer size lets them assume the role of bully far too easily.

    Oh, and yes, Sahsa, I did fly over 200,000 miles last year…Perhaps you can stick to the facts of the matter, rather than making personal attacks on someone you don’t know.

  • roycesmith

    Raven: I am Exec Plat, but systemwide upgrades don’t work in this instance because QF flies the leg from LAX to SYD. I do flight alot, yes… And because I fly alot I see incredible airfares, on Qantas, Malev, American–all of whom attract business by relying on the incredulity you might have upon first seeing it. It’s because I know how some specials are very short-lived and fantastic that I booked it in the first place….not because I am someone who “knew” the fare would be wrong. Who would book a fare knowing it was wrong? That just is not how I think or work…

  • Amy

    Frankly, in this day and age, who isn’t looking for a good deal? Haven’t you ever been to a discount store and found an unbelievable bargain on the rack, and then later bragged to your friends about it? The LV purse for $20 at Goodwill. The antique teapot you found at the flea market for $12 (even though you KNEW the seller didn’t know it was worth $1000) Mistakes? Maybe, but nonetheless a well trained bargain hunter will find the best buy and go for it. And frankly, who cares if it sounds too good to be true? How do you think that the best of the best in this world got their money anyhow? Smart thinking, saving money where they could and quick response. Sounds pretty much like what Mr. Smith did. (and to all of you that claim he couldn’t have flown 200,000 miles last year, most people said that Orville and Wilbur couldn’t fly either…and they did). Well played Mr. Smith. Anyone in customer service knows it takes years to gain a client and only moments to lose one. Wanna blame someone for the mistake? Leave the customer alone…fire the employee that made it.

  • rbubp

    I can’t believe some of the comments here. Unethical??? Are you kidding? Are you suggesting that a customer is SUPPOSED to assume that a fare is incorrect? Who does that? This is not buying gasoline at $.10 per gallon–airline fares are, as many have noted, unbelievable mercurial, perhaps more so than any other commodity or service in the US. To wit–nowhere near as good of a deal as Dr. Smith’s, but I just booked a package deal through Priceline where for $450 I got a hotel and airfare that would have cost me over $1000 had I booked the same separately. I thought perhaps the price might have been incorrect myself until it went through on my card. So, I should have called them and verified the legitimacy of the price in order to be ethical because somehow their website is not actually the real price tag, and if I don’t do this and instead assume the price tag is accurate I am a bad person?? Are you NUTS?

  • rbubp

    –Elliott, you should be ashamed at the asinine assumptions in your story regarding airline pricing. At the very least you come off as a shill for the airlines.

  • HH

    “Unethical and opportunistic” is a great way to describe Royce Smith. Looks like some folks see right through the bullshit without having to know him personally. He consistently takes advantage of situations such as this. It’s really unfortunate for all involved.

  • valentine

    From Roycesmith: “alot”

    Really? (Unlike a previous poster, I take you at your word that you are employed by a university somewhere. That said, I don’t have to believe that either 1.) you deserve your paycheck, or 2.) the American education system is doing its job if our “best and brightest” make this kind of mistake.)

    Onward…
    I have re-read this numerous times:
    The Content may contain inaccuracies and/or typographical errors. American Airlines may alter, change or improve the Content at any time and without notice. American Airlines makes no representations or warranties as to the Content’s completeness or accuracy, and makes no commitment to update the Content. American Airlines makes no representations about the Content’s suitability for any purpose.

    I would like for someone to explain to me how this is relevant. It seems to me that this paragraph is AA’s weasel for CONTENT, meaning that you can’t hold them to what you SEE on the website.
    Roycesmith actually bought a ticket. On the AA website. Set up and operated by AA. Hasn’t he moved from the “visual” disclaimers of the above paragraph into CONTRACT LAW? (Please forgive the caps. I don’t know how to use italics on this site and the emphasis is important.) If AA accepts his click (their half of the transaction), how are they not bound by contract law?

    For that matter, I flew to Europe business class from Chicago a couple years in a row for around $500. We knew perfectly well that was 1/10th the proper price. (By the third year, the seats were up to $700 per person, business class, ORD to AMS. Bastards.)

    Chris -
    I have no idea – none- what would prompt you to side with the people that posted the original fare. If AA can’t afford these mistakes, then it is THEIR obligation to either safeguard better against it or stop having a website. Silly suggestion, I know, but it is theirs, not the customer’s. You completely missed on this one, if only because you didn’t go anywhere near legal obligation (which we all know the airlines will happily ignore without you standing on the ramparts).

  • Laura Edwards

    I have to admit I’m not a very seasoned traveler with only 6 or so domestic flights a year which are almost always personal. However, a price is a price regardless of the industry. If something is mismarked in a store, the consumer get the mismarked price, even online merchants honor incorrect pricing. Prices change all the time on Amazon.com but when I buy a book for 12.99 Amazon doesn’t contact me 4 days later to say ‘oh the price is really 25.99 so you need to pay the difference’. If the transaction took place then it’s a done deal. I have purchased the exact same flight for $98 and $350 (and various price points between). Of course when I saw the $98 trip I jumped on it. Was it a bargain – yes but it was also the listed price. The listed/marked price is the one which should be honored by any merchant; airline or otherwise.

  • JS

    I don’t think you were wrong, Prof. The article by Chris Elliott doesn’t hold you at fault, either:

    “…I wondered whether there was anything a passenger like Smith might have done to spot this fare error before he began to entertain thoughts of crossing the Pacific in style.

    “When carriers such as Spirit Airlines sell tickets for $1, a reasonable traveler may conclude that a $1,198 fare to Australia is not so unreasonable.”

    Now, Chris did say the following, which could, incorrectly IMO, be construed as a slam against you, Prof.:

    “In the end, the one tool that you can truly rely on is your own common sense. If your gut tells you that there’s something wrong with a price, chances are there is. Sadly, common sense is in short supply on some online forums, where travelers devour every deal faster than a cloud of hungry locusts descending on a hapless farmer’s crops.”

    That wasn’t a slam against you, Prof., because Chris put that paragraph in context:

    “I’ve run across travelers who feel that a company should honor any fare error, no matter how outrageous, and who don’t think twice about booking blocks of rooms or several tickets at a wrong price.”

    So I think that Chris was referring to the “locusts” who bought multiple tickets. You didn’t do that, to my understanding, so Chris was slamming the locusts, not you.

    Could Chris have been more explicit with his slam? Sure, it wasn’t unequivocably a slam only against the “locusts.” But I assumed it was only against the “locusts”, because that was the “feel” that I got from Chris’s article above.

    So that’s my two cents on this matter, with inclusion of earlier comment, as well, referring to AA’s website legal section.

  • MeanMeosh

    While I was stationed in India for my job, I called our company’s travel agent to book a home leave flight back to the U.S. One fare they came up with was $1,400 roundtrip from Delhi to DFW, on Continental, in BusinessFirst. I even asked the agent if this was economy – she said nope, this is a legitimate, special business class fare. If you can get $1,400 in BusinessFirst from DEL to DFW, surely $1,000 or whatever from ICT to SYD is within the realm of possibility.

    I think this also brings up two important issues where I respectfully but strongly disagree with Mr. Elliott: 1) the idea that customers should be responsible for vetting the price they are offered before buying, and 2) that the airlines should be allowed to shirk their responsibility in the event of an “obvious” mistake. If I walk in to Best Buy, and they have an $890 TV listed for $89 on the rack, or if the Texas Rangers offer what’s normally a $50 for $8 on their website, should I now be responsible for researching the validity of the price before buying it? Most retail outlets are governed by state consumer protection laws which obligate them to honor the price until it’s retracted. Or what if Professor Smith had bought the ticket from a travel agent for $1,000? State law would most likely bar them from trying to collect the additional $10,000. For that matter, where do you draw the line on what’s “reasonable”? 50% off the normal price? 70%? 90%? How do you even determine what the “normal” price is? For the record, I’m not talking about fares that are posted as $1 or 1 cent, or something patently ridiculous like that – but where do you draw the line?

    I’ll take it one step further – if it’s our responsibility to vet online fares, what’s the point of even having fares posted online if they can’t be relied upon? If the airlines want to take the approach that fares posted online can be dishonored at any time, even days later, then we should just go back to the old days where if you want to purchase a fare immediately, you have to call the call center or a travel agent – and pay a booking fee. Just make the websites a “request” system where the airline tell you “we will get back to you within XX hours with the fare”. How well do you think that’ll go over?

  • Michelle

    I do think AA should have been more careful inputting that first class rate, but a round-trip first class fare for under $1200 to Australia? Yikes – as someone who lives here in Australia (and has family in the USA and Canada) if I saw that rate I would call up the airline to re-confirm because it is too good to be true. That’s pretty much the average price I pay for one way economy no matter what airline or what time of year. As someone who has flown across the Pacific a few times, I have never seen nor will probably ever see that low of rate for FIRST class. For a seasoned traveler I guess it would be just common sense? Especially with USA to Australia fares.

  • roycesmith

    It’s funny that on the FlyerTalk forum devoted to talking about this very issue, Qantas has ad space advertising business class fares for up to 50%. I am sorry but the whole “too-good-to-be-true” argument doesn’t wash…I can understand if someone is based in Australia/Pacific not believing the airfare to be true as their airfares tend to be much higher originating there (at least that’s been my experience)…But in the cut-throat market with flights originating in the US, I don’t think it’s outside the realm of possibility–and I didn’t when I purchased it. I agree with MeamMeosh that such a failure to stand behind internet pricing leads to the larger question of whether ANY fare can be trusted. And one last point: If people see sale fares or prices, does the world of capitalism encourage us to go and double-check the tag? I mean, is this what happens at Harrod’s during their annual stampede sale? I don’t recall having seen those people picking up a red phone to ask whether the price was legit. Look at AA’s website now….it talks about “One-Way Fares from $49! HURRY!” – The way AA markets its fares and contributes to the culture of “deals” is completely incompatible with its response to my situation, in my opinion. Hypocrisy exemplified!

  • Carver

    @RoyceSmith

    To clarify.

    I called your actions unethical. I don’t know you personally and cannot make such a judgment on your character based upon one data point. Although I find it curious that rather than dispute the point, you deflect and suggest, admittedly correctly, that airlines often behave unethically. However, whether airlines act unethically or not has no bearing on whether your own actions in this matter are correct. Two wrongs…

    And no, capitalism is not about opportunistic behavior. As an obviously well educated man, you know that any economic system must necessarily exist within an ethical and moral framework. That’s why there are laws against usury, bait and switch, false advertising, fraud, price gouging, and the myriad of other consumer protections laws and business ethics. These are moral decisions that we as americans have decided. Other countries have made different decisions. Consider china and its lack of intellectual property protections.

    The reason for my skepticism about your good intention is simple that as a former ExecPlat member for 4 years, currently a plat for the past 2-3 years, I have seen my fair share of good prices. I have been flying AA since 1988 and I can state with conviction that I have NEVER seen a 90 percent drop in price, particularly in the premium cabins.

    My skepticism is further bolstered by the fact that spring break isn’t for several months. As I stated before, this error didn’t cost you anything. Its not as if you’ve missed out on an advance purchase window, yet you argue that AA should basically give you a 10k windfall.

    Again, I dont know you personally. My conclusions are based purely on your words and deeds in this matter

  • Carver

    @others

    So many red herring today, so little bandwith.

    If you go to Best Buy and the tv is marked $89 but should have been $890. If you get to the counter and they refuse to sell you the tv, see how far you get argung to get the tv for $89.

    Now, if the transaction is completed, that’s a different matter. In this case, the transaction is completed when the fare is paid and the passenger has completed the entire flight.

    Making arguments based on contract law is useless because the contract necessarily incorporated the conditions of carriage which has tons of loopholes.

    Equally problematic are arguments about the reliability of internet fares. Lets put this in perspective. Millions of fares are sold daily. A couple might be erroneous. Not a major problem.

  • roycesmith

    Carver: You have flown that much and you are honestly trying to say that AA qould pay Qantas $10,000 for the first class seat? I am amazed at the way you unilaterally talk about “American decisions” regarding a moral and ethical framework yet have decidedly little to say about AA’s behavior in the matter. And to whom is AA legally accountable? They behave the way do because they know the “legal framework” you laud also revolves around one’s ability to pay into it. It is absolutely unbelievable that you call me unethical for finding a great airfare. I suppose if I went to Macy’s and bought the $5000 fur coat for $50 I would be classified as unethical in your view? Exactly what price SHOULD I have paid for me to be “ethical” in the end (at least in your view)? Am I also “unethical” for my recent purchase of a $50-each-way Kansas City to Indianapolis flight? Your “framework” is just as debatable and muddy here…not to mention the fact that their is no absolute moral framework that “we as Americans have decided.” Who decided? Who is this “we” you reference? In the end, your comments about me are exactly that…ad hominem attacks on me….and have little if anything to do with the factual matters at hand.

  • valentine

    Carver -
    Please see my above post regarding fares we have OFTEN paid. (Careful with throwing around the word “never” in such a righteous way: maybe your experiences are not the norm. Which I believe to be the case here. We flew to Europe from various originating cities for almost a decade every holiday season, always paying about 1/10th the price…so maybe YOU”VE “never,” but the rest of the world spent ten years at those discount rates.) Also, please read post by “meanmoosh,” same percentage.

    To make my point clear, Carver, you are just wrong and you spend your ignorance (because you truly “don’t know” something, which is the definition there, in case you were going to get offended about that word) actually making a point of accusing someone you don’t know of immoral/unethical behavior. In a public forum.

    It is stunning how sanctimonious your bloviating about moral constructs sounds to everyone else who knows there are blow-out deals OFTEN to be had. Including business class (because that is all we fly).

    Carver, you are just wrong, and it is almost funny how sanctimonious you are about your “credentials” and the righteous indignation with which you type your incredibly wrong assertions. (I love: “I have been flying AA since 1988 and I can state with conviction that I have NEVER seen a 90 percent drop in price, particularly in the premium cabins..” Funny stuff.)

  • valentine

    Again Carver,
    You wrote:
    “In this case, the transaction is completed when the fare is paid and the passenger has completed the entire flight.”

    What are you basing this sentence on? Anything at all?

    AA took his credit card number. In four days, the charge certainly made it to royce’s bill. So how is a transaction not “complete” ?

    According to your premise (and going along with everyone’s $890/$89 tv example), I buy a tv for $89. They take my cc and I leave the store. Are you saying that it still isn’t a transaction until…what point? I get the tv to my car? Leave the parking lot? Get it home?

    According to you, the tv transaction isn’t complete until I actually turn the tv on. So BestBuy has every right to contact me to charge me more because the tv is still sitting in my garage? So my neighbor installs their tv quicker and thus are now protected?

    WHAT are you basing this on?

  • valentine

    Carver, you also wrote:
    “Making arguments based on contract law is useless because the contract necessarily incorporated the conditions of carriage which has tons of loopholes.”

    No company can weasel themselves out of basic contract law. They are not allowed to. All their disclaimers must still exist within that framework.

    For instance, on EBay a lot of sellers claim “no refunds under any circumstances.” Just not true. They can post that all they want, but contract law states that all merchandise that is purchased solely under the seller’s description is ALWAYS returnable in ten days. I’m not saying I like my chances on actually executing that provision, but it does exist.

    The airlines don’t exist in a vacuum. What loophole are you referring to that could possibly excuse the entire industry of basic contractual obligations? (And for the record, I have no idea how royce’s situation fits into contract law. My point is, what are YOU basing this statement on, since you so very VERY emphatically write it? Educate us.)

  • RavinMgmt

    What a wonderful topic! I would have enjoyed the comments a little better had they not included personal attacks. But, what can you do. “Fat finger rates”, the rather insulting term to describe what is at issue here, are more common than you think. I’ve been a revenue manager for a major hotel chain for quite a few years, and those kinds of mistakes happen. But they are usually caught by rate audits long before a consumer sees them. It is true that there are opportunists who, upon noticing a $1 rate for a hotel room, will book 50 rooms then attempt to re-sell them to other people. But that is rare. What inevitably happens is a few people book the “too good to be true” rate, it’s noticed by a manager (either on property or off) and the mistake is fixed. BUT the rate is honored by the hotel, as long as it was made through a legitimate booking channel. At least that is the decision my franchise company has made. We made that decision because, in truth, there are systems in place to catch those mistakes, usually in the form of rate audits. And, between the time the mistake is made and the audit is run, is the only time that a customer has a chance to book that “wrong” rate. As a company we decided that alienating (spelling?) those customers who happened upon the rate and booked it would be bad customer service. Because of our audits we don’t experience too much revenue loss from these mistakes, and the customers who book those rates feel special. I’m not fond of this litmus test that was referred to in the article. Most travelers don’t know the ADR or RevPar of the area they are traveling to on any given date, so having them determine whether a rate is reasonable or not is not reasonable. Especially now with Priceline commercials negotiating an obvious upscale hotel down to $65 and saying, “oh, come on it will cover your operating costs”. There are obvious wrong rates like the $1 rate, but what about $50 on a Sunday night? We have a 5* hotel in our city that goes from $175 a night on the weekdays to $78 on Sunday, because our city is slow on Sunday nights. That’s revenue management not a wrong rate, but how is a traveler supposed to know that? I think companies should invest more in the checking of their published rates rather than picking on the consumer that caught their mistake. In reality, they should be thanking him or her.

  • Wrona

    First class fares to Sydney usually sell for $20,000+. Even business class runs at around $10,000. So $1,200 for first class is more than quite a deal. Heck $1,200 is equivalent to current pricing for economy – less actually for some weeks in April that I looked at from Wichita. If the professor searched online for the price on a site like Travelocity, Expedia, or Kayak, it should’ve been obvious that the price was out of line – versus other carriers. $1,200 versus even $10,000 is quite a difference. If he looked on American’s website, assuming he was using the search by price or by price and schedule – it would’ve shown up as lower than economy class pricing, which is quite abnormal. Now if he was searching by schedule, he wouldn’t have seen the fare difference.

    I too saw the deal on American to Sydney and I called my aunt who flies maybe once every couple of years and told her that first class to Sydney was selling for less than she had paid last year – in low season – for a roundtrip ticket in economy. We both said it was a mistake, that it would be pulled soon, and if the airline honored it anyone who bought those tickets would be really lucky.

    Yes it would be nice if the airline did honor this price but as per the contract they aren’t required to. At least unlike British Airways last fall they didn’t unilaterally cancel the tickets, but instead offered the economy class price, plus a voucher.

  • valentine

    Chris -

    I’ve now read many of your posts regarding this subject.

    To be clear, my argument does NOT hinge on “they started it” ( from the if-the-airlines-are-going-to-be-unethical-then-I-will-too argument), nor on “there are no ethics in capitalism,” nor “soak ‘em when you can.”

    To my knowledge from what I’ve read so far here, you haven’t yet responded to this aspect:
    The airline is quite clear that they make the rules. They make a lot of them. It is their business and we can choose to follow their rules (which they will often point out we must) or go away. IF the airline establishes their relationship with the other person in such a rules oriented way, isn’t it then THEIR rules that we are just trying to follow?

    My point: why do you think the airlines can “have it both ways”?

    Finally, the airlines set up the website to get more business. If they are sloppy, how is that sloppiness not legally now their obligation? You seem to stress the “stealing” aspect from the customer and not the “obligation” aspect on the part of the people who
    1.) set up the website
    2.) hired the programmer that entered in the fare
    3.) took the cc
    4.) habitually and chronically do this exact thing.
    Clearly, through #4, the airlines have no financial incentive to get on top of this.

    I truly wish you would respond (here, in comments, if you are unnecessarily restricted in a post) to these. Not because of your job, but, at least for me, because you are someone that I respect in other areas for your even handedness.

    You hold the airlines to their own refund policies, carefully explaining them on this site countless times. You hold the airlines to their legal obligations when they don’t want to be held there. How do those things not apply here?

  • valentine

    Oops, forgot to add, I am self-employed. I used to run a very loose ship, making allowances all the time for customers, giving them slack…trying to be nice. When they behaved within that environment in kind, it was because I (as the business owner) had established that culture.

    I now have a lot more rules. And all customers are given a written copy (much like the published contract of carriage). My customers abide by those rules or don’t do business with me (much like the airlines). At the same time, they absolutely hold me to my end (which is fair, since I am the one writing down the rules).

    Why are the airlines not ethically bound to live by the same words that they themselves establish? I expect my customers to abide by my rules, BUT it is only fair (ethical) for me to do so as well.

  • Justin

    @ Everyone,

    I think the Walmart example is a good one. No other industry needs FURTHER regulation than that of the airlines. Why?

    If Walmart could write into their “Contact” that users who buy items can ONLY return them at Walmart’s discretion within 30 days (or 2 weeks, whichever it is) regardless of if the item is defective, broke, etc. How many of you would be running out to make your purchases there?

    Better yet, who would shop at Walmart if whenever you made a purchase, Walmart could retroactively charge you the difference if the price went up in a month or tell you the item had to be returned? I.E. You buy a TV for 1499.99 and the price goes up to 1700.99 in the 30 day period. Walmart gives you a call and says, we lost money on your purchase. That price was a mistake. You can either return it or pay the extra 201 dollars!

    Both of these scenarios seem RIDICULOUS but that’s exactly what the airline does. We can cancel ANYTHING we want, claim ANY Fair is a Fat finger mistake…and ALL the responsibility would lie on the customer. I don’t travel much but if I saw a fair for 1100 to Australia, I’d probably think it was REAL, too. My mom flew to Tanzania for 1800. Fares were as low as 1600 but she did not book in time. So why would I believe that 1100 is a “Fat Finger” mistake? Maybe this professor who has traveled 200,000 miles is more seasoned. Yet, it is NOT the customer’s job to verify the industry’s follies.

    To make matter worse, when we make an error, WE ARE HELD TO IT. You don’t see the same industry bending over backwards to aid the customer any longer. They’ll definitely help you, FOR A FEE.

    Back to my initial point…..Regulation is in dire straits…

  • Justin

    @ Valentine,

    I think you are arguing a separate point in itself. A company does have a right to write any contract it wants. If someone agrees to it, its their “own fault”. Now when you say “no refunds under any circumstances.” They are in their right to say tough luck, you can’t get your money back. See Non-Refundable tickets.

    Now where there is a loophole to that, and where this might fit in (Though the Contract he “Signed” seems to alleviate the airlines) is under Misrepresentation. If someone blatantly misrepresents a product to you, you are able to return it, even if there is such a no return policy in place. I’m guessing the airlines have it written in their legal mumbo jumbo that mistakes like this that serve as a Misrepresentation are rectified by a simple refund and that they are not responsible for any damages arising from their actions.

    I’m not a lawyer… but this would be MY GUESS.

  • Aaron

    I still disagree with you on your views about “fat-finger fares,”, Chris. If an item at a store that is supposed to cost $50 is market at $20, they sell you the item for $20. No one calls you three days later and says “Give us $30 or bring back the item.” That’s known as bait-and-switch, and not only is it unethical, it’s *illegal*. If you ask me, Mr. Smith should be calling the attorney general’s office. How is he supposed to know a fare is erroneous and not just a fantastic sale price? After all, American Airlines is the company that invented yield management — the practice that allowed them to undercut the discount airlines without losing their shirts. A super-low fare is not that far fetched; it’s American’s business model! If the airlines were legally held to their advertised prices — just like EVERY OTHER BUSINESS in this country — perhaps they’d be motivated to spend some of that luggage-fee money on improving their computer systems.

    Mr. Smith, call a lawyer.

  • Christopher Elliott

    @valentine, I think what American did was wrong. It should have taken care to offer a correct fare. But I don’t agree with the argument that because airlines don’t forgive our mistakes, we shouldn’t forgive theirs. That makes us no better than them.

    I don’t think the airlines are having it both ways. I think they pay a price whenever they offer an erroneous fare. As I said, there are no winners.

  • John

    There’s a big difference between other airlines’ mistake fares (that they sometimes chose to honor) and AA’s mistake fare here. The difference is that the AA flights to Australia are codeshares on QF. If the flights were on AA’s own metal, I wouldn’t be surprised if they would just eat the difference and honor the fare. However, in this case, QF is going to make AA pay them the actual cost of the fare – regardless of how much AA sold the tickets for. If the tickets were sold for $1k and AA has to pay QF, say, $15k, then it that’s $14k in CASH that AA has to pay out of pocket per ticket sold. If we assume that 500 such mistake fares were sold (I don’t know the exact number), then that’s $7M that they lose right there. Honestly, I can’t blame them for not honoring the fare in this case. Sure, AA will lost some customers over this but hardly enough to make up for the millions of dolalrs they’d be giving up instantly by honoring the fare. Again, I think that if the flights were on AA’s own metal, then it would be a different story.

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