Mistake fares really are mistakes in Canada


Remember the Yangon premium cabin mistake fares from late 2012? For relatively trivial amounts of money one could fly from Yangon to many places in first class and business class for pennies on the dollar. The deal came and went a few times and it was one of the early tests of the DoT rules protecting customers in such scenarios; every ticket to the USA was honored as far as I know, even though some (including mine) were initially cancelled by airlines. Swiss Airlines was on the hook for a number of such tickets sold at the end of September 2012 and has been the subject of numerous complaints brought to the Canadian Transportation Agency (CTA) based on their unwillingness to honor tickets booked between Yangon and Montreal. After much back and forth, appeals and hearings the CTA has issued its ruling: Swiss won.

Unlike the US rules which explicitly state that the airlines cannot say “oops” and claim a fare is a mistake as a basis for not honoring it the Canadian policies are based more on traditional contract law. In the ruling filed Tuesday several references are made to prior cases which have nothing to do with airlines and everything to do with whether the contract can be binding if one party made a mistake and if that mistake is fundamental. Essentially, if the CTA believes that the fare offered was a fundamental mistake then “the contract would be void ab initio as there is no meeting of the minds.”

image

And it also recognizes that many of the 83 claimants (passengers) covered in the ruling made the same claims heard many times before about mistake fares. These claims include:

  • Suggesting that the bloggers didn’t know for certain that these were mistake fares despite the fact that they were publicized as such;
  • Noting that the base fare numbers cited by Swiss ignores the all-in pricing which is what passengers actually judge fares on; and,
  • Identifying other, similar fares and routes and suggesting that this may have been a similar sale.

The CTA took these ideas under advisement and pretty much kicked them to the curb. Ultimately the CTA found that Swiss was not negligent in allowing the tickets to be sold.

[G]iven that the mistaken fares were approximately one percent of the correct fare, it is clear that Swiss did not intend for the fares to be made available for sale and that their release was indeed a mistake.

Moreover, the CTA found that the purchase pattern overall was indicative of predatory behavior on the part of the passengers.

CTA-ruling-1

I’m not a huge fan of anyone suggesting that it is possible to know what is reasonable and what is not in the world of airline pricing, but I suppose there is possibly enough in different areas here such that the claim is reasonable in this particular case.

OK, so if there’s an obvious mistake then the airline can back out of the deal. Surely they cannot do so at any time though, right? Maybe. The CTA did define parameters of what it believes to be reasonable behavior for airlines in such instances:

image

Essentially a full refund and notification within 72 hours of when the “carrier becomes aware of the publishing of a fare” assuming the trip is more than 72 hours away. There is not a ton of clarity on what becoming aware means in this context. That leaves open the potential for an airline to change their mind at some point well after the ticket was sold should they “become aware” of the mistake made. At least that’s how it reads to me.

There’s more in the ruling (you can get a copy of the PDF here) but the overall sense is that consumers are not protected unconditionally in Canada like they are in the USA.

As an aside, the ruling filed has some interesting insight into the source of the fare: ATPCo apparently wasn’t supposed to file fares from Yangon to Montreal in late September and did anyways at which point they became available for sale:

image

h/t to The Colonel for sharing the filing this afternoon

Related Posts:

Never miss another post: Sign up for email alerts and get only the content you want direct to your inbox.


Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, LinkedIn and .

10 Comments

  1. I’m not ok with this; customers should then be allowed 72h to cancel after purchase if it is an obvious mistake.. I’m all for airlines getting 24h, but 72h is an absolute joke and the Canadian consumer should be pissed!

    1. I agree that something resembling equal reciprocity would be more reasonable, but I don’t get to make the rules. Then again, I’m not sure how many customers would be able to claim that their decision to purchase XYZ ticket is an obvious mistake.

      I do not believe that this ruling gives the airlines carte blanche to revoke fares anytime they want. But it is a more clearly defined amount of flexibility than was previously offered to them.

      1. This is where ticketing RULES should come in. If you want to have cancellable fares, then change the delayed ticketing rules or build refunds into the fare rules. If a ticket was issued and nothing broke the fare rules, I don’t see how one-way cancellation is right.

  2. There’s a PDF circulating that Swiss filed on this matter. Their lawyers dug up quotes from various somewhat popular blogs indicating that this was actually a mistake fare and that readers “shouldn’t call the airlines.”

    That said, I have to wonder how much Swiss spent fighting this to what it would cost to actually honor 83 tickets (cabins don’t always go out full, etc.).

    1. At some point there is value in fighting for what you believe is “right” even if it costs more in the long run. Setting precedent and establishing a position to hold for future instances can have some long-term value. There are several examples of companies fighting patent cases, for example; NewEgg is the most visible and vocal about it.

      I have no idea if Swiss will ever truly get there on this one, but I can understand the decision to fight.

    1. I must agree. In must industries, if a company advertises a price that is obviously wrong they can retract it. Airlines should be able to do the same when it´s an obvious mistake, though there need to be requirements about promptness of action, and probably some limitaton on what can be claimed to be a mistake. I think Canada generally has it right.

Comments are closed.

BoardingArea