Seven Reasons Why Mistake Fares May NOT Be Dying: Part One of Two

“Last week the U.S. Department of Transportation quietly issued a ruling on an issue that had vexed the chasers of mistake fares for the last several months. The practical result of the ruling is unlikely to satisfy those whose tickets were cancelled, with not much coming from the DOT beyond strong words and a watered down ‘settlement.’”

In addition to the above statement, “But the broader question is, does this ruling point towards a future where the penalty for canceling a mistake fare ticket is not longer enough to dissuade airlines from doing it?”

In playing devil’s advocate to the Devil’s Advocate, the answer may very possibly be “no”.

Numerous articles at weblogs had pronounced the possible death of mistake fares ever since this official statement was issued by the Department of Transportation of the United States back on Friday, May 8, 2015 with regard to a change in policy involving mistake fares — and yet mistake fares have occurred since then and have been honored anyway…

…so does that statement sound the death knell for mistake fares? Although the possibility of procuring a mistake fare may indeed be increasing in difficulty due to improved technology and potentially more restrictive regulations, here are seven reasons why mistake fares may not by dying:

1. Mistake Fares Have Been Honored for Years

The rules set forth by the Department of Transportation of the United States pertaining to a prohibition on post-purchase price increase was set forth on Monday, April 25, 2011 and became effective as of Tuesday, August 23, 2011…

(a) It is an unfair and deceptive practice within the meaning of 49 U.S.C. 41712 for any seller of scheduled air transportation within, to or from the United States, or of a tour (i.e., a combination of air transportation and ground or cruise accommodations), or tour component (e.g., a hotel stay) that includes scheduled air transportation within, to or from the United States, to increase the price of that air transportation, tour or tour component to a consumer, including but not limited to an increase in the price of the seat, an increase in the price for the carriage of passenger baggage, or an increase in an applicable fuel surcharge, after the air transportation has been purchased by the consumer, except in the case of an increase in a government-imposed tax or fee. A purchase is deemed to have occurred when the full amount agreed upon has been paid by the consumer.

(b) A seller of scheduled air transportation within, to or from the United States or a tour (i.e., a combination of air transportation and ground or cruise accommodations), or tour component (e.g., a hotel stay) that includes scheduled air transportation within, to or from the United States, must notify a consumer of the potential for a post-purchase price increase due to an increase in a government-imposed tax or fee and must obtain the consumer’s written consent to the potential for such an increase prior to purchase of the scheduled air transportation, tour or tour component that includes scheduled air transportation. Imposition of any such increase without providing the consumer the appropriate notice and without obtaining his or her written consent of the potential increase constitutes an unfair and deceptive practice within the meaning of 49 U.S.C. 41712.

[Doc. No. DOT-OST-2010-0140, 76 FR 23167, Apr. 25, 2011]

…but mistake fares had been honored by various airlines long before this portion of the Code of Federal Regulations became effective. Alitalia did not have to honor this now-infamous business class airfare for round-trip flights between Toronto and Larnaca back in 2006 at a cost of fewer than $200.00; nor was Air Pacific required to honor the mistake fare of $51.00 for a round-trip flight between Los Angeles and Fiji back in 2005 — but they did; and those are only two of many examples of mistake fares which were voluntarily honored. Some of classic “hall of fame” examples are listed here.

While this does not automatically guarantee that airlines will continue to honor mistake fares in the future, it also does not automatically mean that mistake fares will die, either.

2. The New Policy is Somewhat Nebulous

While the official statement will no longer require airlines to honor mistake fares…

As a matter of prosecutorial discretion, the Enforcement Office will not enforce the requirement of section 399.88 with regard to mistaken fares occurring on or after the date of this notice so long as the airline or seller of air transportation: (1) demonstrates that the fare was a mistaken fare; 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.

…there is no timeline nor a clear direction as to how the Department of Transportation will decide what exactly will be the final and definitive ruling pertaining to mistake fares — even with this latest ruling — which leads to the next reason…

3. What Exactly IS a Mistake Fare?

According to the aforementioned segment extracted from the statement from the Department of Transportation, the airline is required to first demonstrate that the fare was indeed a mistake fare — although the parameters of that burden of proof are not completely clear, adding to the nebulousness of the new policy — but what exactly is a mistake fare?

United Airlines and Delta Air Lines had apparently had an airfare war with each other this past January by pricing incredible deals from the hub airports of each other where you would have been able to fly from the United States to Europe through May — with the exception of a couple of weeks in late March and early April — for as low as $314.00 round-trip between Chicago and Moscow, including all taxes and fees. Can that be considered a mistake fare?

What if the exact same scenario occurred once again where the airfare was $414.00 round-trip between Chicago and Moscow; but it was really supposed to be $914.00. Can the airlines claim that that was a mistake?

Delta Air Lines apparently honored what is considered a $389.00 airfare to Kuala Lumpur from certain cities in California which Ric Garrido of Loyalty Traveler chose to turn down and not take advantage of it after all — but was that airfare clearly a mistake?

Look at low-cost carriers such as Spirit Airlines, Ryanair and Allegiant Air. They charge ridiculously low airfares which could easily be confused for mistake fares; and yet they are wildly profitable because of the revenue from ancillary fees.

Is an airfare of $99.00 each way between Boston and Keflavik International Airport in Iceland a mistake? What about an airfare of $61.00 round-trip between New York and Keflavik International Airport?

Inaugural flights are now scheduled in early December with Norwegian Air Shuttle which members of InsideFlyer had an opportunity to fly as a passenger for free via this promotion, which is now closed. Those flights are being promoted to cost as low as $79.00 each way — including all taxes and fees. Could that not be considered within the realm of mistake fare territory?

Even worse: can the airlines simply pick and choose what are mistake fares and what are not? Will they have license to engage in “bait and switch” tactics on their customers — and would that become perfectly legal?

To be continued…

Photograph ©2014 by Brian Cohen.

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