Closing a huge booking loophole - going nuclear

With the 4 mile award redemption deal to or from China consuming many folks this afternoon I’m not all that in to pontificating on whether the tickets will be honored or not. I’m actually rather more entertained by the way the situation has been fixed, at least temporarily. This popped up on a Sunday when most folks aren’t in the office working and when it is unlikely that they would be able to figure out quickly what caused the hole. There are basically two options in such a situation: keep selling and hope not too many get booked or shut everything down. United Airlines has chosen the latter in this case. They’ve effectively removed Hong Kong from their award booking engine, even though there are flights in the system with seats available.

Looking out in late December there aren’t many seats for sale at all. Lots of flights look like this (the red ones are the award buckets):

No inventory there so no surprise that the site is choking if you try to book one. But looking further out, say March 2013, there actually are flights with award inventory showing:

Put those dates in to the award search page and you get back this awesome error:

Other award searches, even to other cities in China where the deal was also available, are still working but Hong Kong has been pulled completely out of their systems while they sort this one out. That’s a pretty aggressive move to close up the bug. Not all that surprising given the potential revenue losses if this stayed open much longer, but it is a very dramatic move on their part.

As for whether the tickets will be honored or not, it will be interesting to see it the DoT has to get involved. Lots of folks eventually were charged the real price, even though they were quoted only 4 points during the transaction. Folks without sufficient miles seem to have been charged only the lower number; those will be the more interesting ones to watch. And, should anyone be taking bets on how or why this happened, I’m guessing it was a data field mapping error somewhere in the systems which had the engine do something silly like calculate the number of points to quote/deduct by looking at the code for the meal service type. Whoopsie.

I’m looking forward to the entertainment value which I know will come with watching this unfold in the next few weeks.

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18 Responses

LarryInNYC 15 July 2012 at 7:48 pm | Permalink

From what I’ve heard, folks with sufficient miles were charged the “non-discounted” price. People without sufficient miles had no miles at all deducted from their accounts. That may be what saves United from having to honor the ticket — the DOT regulations seem to me to apply to transactions for which the passenger has paid the original quoted price. If United still has not collected the four (or eight) miles, they might be able to claim that the passenger has not yet fully paid.
.
If this were a Fractured Fairy Tale, the title would be “The Four Mile Award, or the Importance of Unit Tests”.

Carsten Varming 15 July 2012 at 7:52 pm | Permalink

“The Four Mile Award, or the Importance of Unit Tests”. Or the importance of types to distinguish meals from miles.

David 15 July 2012 at 8:17 pm | Permalink

Interesting that you can book the flights via AC.

Adam 15 July 2012 at 8:54 pm | Permalink

@David what does that mean you can book them on Air Canada?

greek2me 15 July 2012 at 8:57 pm | Permalink

Seth- I am woefully ignorant on all this fare class stuff, but you did not highlight the JN bucket as awards and those are the class my RTs got booked in today. Does that makes sense to you?

Seth 15 July 2012 at 9:11 pm | Permalink

What David is saying is that the flights with regular award inventory – X, I and O – can be booked via partners because the seats are still out there. United closed the loophole by simply preventing any more bookings to or from HKG. They essentially killed it from their systems. That’s the aggressive/groundbreaking move they made on this one.

As for the fare classes, greek2me, I don’t highlight JN because that’s the EasyPass rate. I only have the saver stuff in the script which highlights the awards in the revenue booking view. Lots of them booked into JN so you’re in the same boat basically as everyone else on this one.

As for whether the payment of 4 miles + taxes satisfies the DoT vis a vis 49 CFR 41712 § 399.88(a), I’ll call your attention to this line from their FAQ: “A purchase is deemed to have occurred when the full amount agreed upon has been paid by the consumer.” In other words, it wouldn’t be too hard for UA to argue that the “full amount agreed upon” was the full rate since that was displayed on the page. Of course the consumer could claim the opposite since it also showed the other number. Which actually wins will be hard to know.

Dave 15 July 2012 at 9:20 pm | Permalink

That’s exactly what I was saying Seth. Thanks.

Without looking too much into this, it seems that there is nothing in the DoT CFR that would prohibit outright cancellation of the tickets. Of course, under common law contract law, I would imagine that UA would be on the hook for any expenses people incurred in reliance on the validity of the ticket. This would probably require a showing that such reliance was reasonable. I think it would be very hard to show that anyone purchasing a ticket under this scheme could reasonably believe the ticket would be honored.

Of course, I’m not providing legal advice here, just simply musing. Who would actually litigate something like this anyway, Seth???

Seth 15 July 2012 at 9:28 pm | Permalink

I’m not sure it would ever make it to the contract law stage of things.

The DoT rule says that changing the price after the ticket is purchased – other than for changes in real taxes (not YQ) – is not permitted. If they simply cancel the tickets and tell you to buy a new one at the current price that would, in theory, be in violation of that section of the CFR. They’re pretty clear on that for regular revenue tickets. And I think that they’d probably go to bat on an award ticket, too, based on what the rules state. The real question is how to interpret “A purchase is deemed to have occurred when the full amount agreed upon has been paid by the consumer,” in this context.

Is the full amount agreed upon what was published in the tariffs schedule? Is there even such a thing for award charts the way there is for revenue tickets? In the case of the latter there definitely is, but for awards not really. The fact that the page showed both prices at the same time also makes me wonder how the claim would play out. Would the DoT allow the airlines an “out” because they did show the full price but never charged it? If they post the price but never actually collect the cash then does it really count? I’d bet not.

And I’m certainly not providing legal advice, mostly because I’m not a lawyer.

TJ 15 July 2012 at 9:41 pm | Permalink

Do you know for which other routes the deal was/is available?

BOShappyflyer 15 July 2012 at 9:57 pm | Permalink

I actually saw this deal come through this afternon, but in between things I was doing, I thought it was earn 4 miles for every dollar for a travel ticket to HKG. I didn’t book iti, needless to say, but I think I’d sit on the sideline to see how it plays out.

I could be totally wrong on this, and even though it was the confirmed price, the two arguments (which may or may not have enough leg to stand on) are:

1) One would reasonably expect that this is indeed a mistake. 4 miles to book a flight to HKG.

2) It is the IT glitch. Clearly, united website lists out the mile required to travel to specific region. And the chart is pretty clear, so unlike regular fares (where one may think it is an actual sale), this is evidently a mistake fare.

Who knows, maybe it will all work out for the consumer though I highly doubt it. It reminds me more about the Cartera shopping mistake.

Bluto 16 July 2012 at 12:13 am | Permalink

If you were united and you were going to void all of the 4 mile bookings on Monday, would you have taken this nuclear approach?

Kris Ziel 16 July 2012 at 1:15 am | Permalink

@Bluto
I think you would do it as quickly as possible. It is better to annoy a few hundred people than a few thousand.

Hendrik 16 July 2012 at 2:00 am | Permalink

This reminds me of the Lufthansa F PRG-CPT deal. LH mis-priced the A fare and lots of people jumped on it. They tried to fix it and made it even worse ($10 base for F return).
Lots of people bought tickets and A class availability went down. To prevent further sales LH decided to remove A class availability completely – that is paid First and not only awards 🙂

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LarryInNYC 15 July 2012 at 7:48 pm | Permalink

From what I’ve heard, folks with sufficient miles were charged the “non-discounted” price. People without sufficient miles had no miles at all deducted from their accounts. That may be what saves United from having to honor the ticket — the DOT regulations seem to me to apply to transactions for which the passenger has paid the original quoted price. If United still has not collected the four (or eight) miles, they might be able to claim that the passenger has not yet fully paid.
.
If this were a Fractured Fairy Tale, the title would be “The Four Mile Award, or the Importance of Unit Tests”.
Carsten Varming 15 July 2012 at 7:52 pm | Permalink

“The Four Mile Award, or the Importance of Unit Tests”. Or the importance of types to distinguish meals from miles.
David 15 July 2012 at 8:17 pm | Permalink

Interesting that you can book the flights via AC.
Adam 15 July 2012 at 8:54 pm | Permalink

@David what does that mean you can book them on Air Canada?
greek2me 15 July 2012 at 8:57 pm | Permalink

Seth- I am woefully ignorant on all this fare class stuff, but you did not highlight the JN bucket as awards and those are the class my RTs got booked in today. Does that makes sense to you?
1. Seth 15 July 2012 at 9:11 pm | Permalink
  
  What David is saying is that the flights with regular award inventory – X, I and O – can be booked via partners because the seats are still out there. United closed the loophole by simply preventing any more bookings to or from HKG. They essentially killed it from their systems. That’s the aggressive/groundbreaking move they made on this one.
  
  As for the fare classes, greek2me, I don’t highlight JN because that’s the EasyPass rate. I only have the saver stuff in the script which highlights the awards in the revenue booking view. Lots of them booked into JN so you’re in the same boat basically as everyone else on this one.
  
  As for whether the payment of 4 miles + taxes satisfies the DoT vis a vis 49 CFR 41712 § 399.88(a), I’ll call your attention to this line from their FAQ: “A purchase is deemed to have occurred when the full amount agreed upon has been paid by the consumer.” In other words, it wouldn’t be too hard for UA to argue that the “full amount agreed upon” was the full rate since that was displayed on the page. Of course the consumer could claim the opposite since it also showed the other number. Which actually wins will be hard to know.
Dave 15 July 2012 at 9:20 pm | Permalink

That’s exactly what I was saying Seth. Thanks.

Without looking too much into this, it seems that there is nothing in the DoT CFR that would prohibit outright cancellation of the tickets. Of course, under common law contract law, I would imagine that UA would be on the hook for any expenses people incurred in reliance on the validity of the ticket. This would probably require a showing that such reliance was reasonable. I think it would be very hard to show that anyone purchasing a ticket under this scheme could reasonably believe the ticket would be honored.

Of course, I’m not providing legal advice here, just simply musing. Who would actually litigate something like this anyway, Seth???
1. Seth 15 July 2012 at 9:28 pm | Permalink
  
  I’m not sure it would ever make it to the contract law stage of things.
  
  The DoT rule says that changing the price after the ticket is purchased – other than for changes in real taxes (not YQ) – is not permitted. If they simply cancel the tickets and tell you to buy a new one at the current price that would, in theory, be in violation of that section of the CFR. They’re pretty clear on that for regular revenue tickets. And I think that they’d probably go to bat on an award ticket, too, based on what the rules state. The real question is how to interpret “A purchase is deemed to have occurred when the full amount agreed upon has been paid by the consumer,” in this context.
  
  Is the full amount agreed upon what was published in the tariffs schedule? Is there even such a thing for award charts the way there is for revenue tickets? In the case of the latter there definitely is, but for awards not really. The fact that the page showed both prices at the same time also makes me wonder how the claim would play out. Would the DoT allow the airlines an “out” because they did show the full price but never charged it? If they post the price but never actually collect the cash then does it really count? I’d bet not.
  
  And I’m certainly not providing legal advice, mostly because I’m not a lawyer.
TJ 15 July 2012 at 9:41 pm | Permalink

Do you know for which other routes the deal was/is available?
BOShappyflyer 15 July 2012 at 9:57 pm | Permalink

I actually saw this deal come through this afternon, but in between things I was doing, I thought it was earn 4 miles for every dollar for a travel ticket to HKG. I didn’t book iti, needless to say, but I think I’d sit on the sideline to see how it plays out.

I could be totally wrong on this, and even though it was the confirmed price, the two arguments (which may or may not have enough leg to stand on) are:

1) One would reasonably expect that this is indeed a mistake. 4 miles to book a flight to HKG.

2) It is the IT glitch. Clearly, united website lists out the mile required to travel to specific region. And the chart is pretty clear, so unlike regular fares (where one may think it is an actual sale), this is evidently a mistake fare.

Who knows, maybe it will all work out for the consumer though I highly doubt it. It reminds me more about the Cartera shopping mistake.
Bluto 16 July 2012 at 12:13 am | Permalink

If you were united and you were going to void all of the 4 mile bookings on Monday, would you have taken this nuclear approach?
Kris Ziel 16 July 2012 at 1:15 am | Permalink

@Bluto
I think you would do it as quickly as possible. It is better to annoy a few hundred people than a few thousand.
Hendrik 16 July 2012 at 2:00 am | Permalink

This reminds me of the Lufthansa F PRG-CPT deal. LH mis-priced the A fare and lots of people jumped on it. They tried to fix it and made it even worse ($10 base for F return).
Lots of people bought tickets and A class availability went down. To prevent further sales LH decided to remove A class availability completely – that is paid First and not only awards 🙂
And so it goes; the 4 mile awards are to be revoked - The Wandering Aramean 16 July 2012 at 7:31 pm | Permalink

[…] Closing a huge booking loophole – going nuclear […]
Following the revocation of the United 4 mile awards the crazies come out - The Wandering Aramean 17 July 2012 at 7:14 am | Permalink

[…] Closing a huge booking loophole – going nuclear […]
United survives DoT scrutiny on the 4 mile Hong Kong "sale" - The Wandering Aramean 12 October 2012 at 7:52 am | Permalink

[…] Closing a huge booking loophole – going nuclear […]
United's booking troubles and systems shutdown. Again. | The Wandering Aramean 13 September 2013 at 1:02 pm | Permalink

[…] from the valid city pairs list, blocking them from being booked. At the time I called it “going nuclear.” Compared to the incident this week that is now looking like a rather small issue […]
Is there such a thing as too much consumer protection? | Wandering Aramean 15 November 2013 at 1:27 pm | Permalink

[…] Closing a huge booking loophole – going nuclear […]