Like many others I watched the drama yesterday surrounding the United “sale” on tickets from Denmark. I also bought one. I did a bad job in buying it as I could have actually made use of an open jaw with a return to London for next November but I messed up on that front. So I just have my one way trip from London to Dallas. Or, I suppose I should say I did have that trip. As has been well publicized, United cancelled the bookings, citing a problem with currency conversion and a 3rd party vendor.
United is voiding the bookings of several thousand individuals who were attempting to take advantage of an error a third-party software provider made when it applied an incorrect currency exchange rate, despite United having properly filed its fares.
So, no extra time in the Lufthansa First Class Terminal for me. And I’m mostly OK with that, though I’m also not entirely sure that the DoT will allow this unilateral move to stand.
How it happened
The early reports of this mistake fare showed up with screenshots of ITA search results. Those results had the mispriced fares across multiple airlines and multiple routes. Once I got a ticket issued I reviewed the receipt online and checked the fare construction. The details there look to be correct for the filed fare.
/FC LON LH X/FRA M 981.90J77 UA X/DEN UA DFW M 10517.68F77OW NUC 11499.58 END ROE 0.638555
Combine that with United blaming a vendor and my guess is that ITA is at least part of the cause of the issues.
The fare construction above shows a total price of 11499.58 NUCs. A NUC is a Neutral Unit of Construction used by airlines to be able to price fares once and have them automatically convert to the local currency for pricing. In this case the Rate of Exchange (ROE) applied to that transaction is 0.638555 which results in a price of ~7,350 DKK, a number which appears to be off by a factor of 10; the price should probably be 73,500DKK to get to the $11,500 equivalent price. On top of that, however, something somewhere managed to make the 7350 DKK actually show up as 74 DKK in the fare construction via ITA. Similarly all taxes & fees were not what they should be.
United uses ITA as the back-end for its website and this is not the first time that bugs in the ITA code have carried over to the United booking engine. The part where United was actually able to process sales originating in London from a Danish point of sale is a great feature for customers, except when it exposes bugs like this. And that feature is rare to find online which is likely part of why United was the main avenue through which this error was exploited.
I also wonder a bit about Errors & Omissions insurance and indemnity between United and the unnamed vendor. Does United’s contract with the vendor hold said vendor liable for screwing up transactions? If so, should United even bother to care about the mistake? And if not, why not?
How the DoT will react
The DoT has indicated previously that an airline making a mistake in pricing fares is not an excuse which justifies cancelling the tickets. In this case United’s claim is that it did nothing wrong but that a vendor it relies upon screwed up. One colleague suggested that United might try to claim that cancelling the flights is not the same as a fare change per the DoT’s rules. I think that’s an approach likely to fail. Another possibility is that the DoT agrees that because United didn’t directly mess up they could be exempt from the rules. But that opens up a Pandora’s Box of potential claims thanks to outsourcing anything and everything. Does the 3-hour rule no longer apply if the ground handlers are outsourced and that company makes a “mistake” in staffing levels?
One possibility here is that United is using the initial cancellation to rid itself of liability for all of the tickets booked to destinations other than the USA. The DoT has previously held that a trip between two other countries but via the USA (e.g. London to Sydney via SFO) is not covered under its policies. Getting those off the books but allowing trips to/from the USA would help a bit, even if it does not wholly solve the issue.
Or maybe the DoT will agree that it was an “honest mistake” and that the company should be let off the hook. I would be surprised if United took action without first consulting the DoT so the company probably knows what to expect much more than passengers do right now.
The DoT also issued a Notice of Proposed Rule Making (NPRM) in May 2014 which, in theory, talks to this topic. Among things covered in the NPRM is the issue of deals spreading and “bad faith” bookings:
Since then, the Enforcement Office has investigated a number of incidents where passengers complained that airlines or ticket agents would not honor tickets that had been paid for in full because the sellers of the air transportation erroneously let them book flights for less than the actual value. The Enforcement Office has become concerned that increasingly mistaken fares are getting posted on frequent-flyer community blogs and travel deal sites, and individuals are purchasing these tickets in bad faith and not on the mistaken belief that a good deal is now available.
While that clearly covers “deals” such as this one, regardless of whether anyone is calling it a “mistake fare” in writing about it, it also seems that the DoT is not actually ready to act on this issue yet. The NPRM continues:
We solicit comment on how best to address the problem of individual bad actors while still ensuring that airlines and other sellers of air transportation are required to honor mistaken fares that were reasonably relied upon by consumers.
In other words, no changes are being made because the DoT is unsure how to correctly qualify the rules. At least that’s how I’m reading the NPRM. Especially as there are no further details offered in the document which would actually change the rules.
Why I’m a hypocrite
I bought one. I was thinking about possibly buying more, but I got one. And I planned to use it. The trip was less convenient than the coach flight I had previously booked but it would have been much more comfortable. And fun. But I also know that, at some level, it is wrong. This was not a legit price war/sale where the carrier meant to offer up cheap flights. But I booked it anyways.
I read the thread on FlyerTalk and saw posts about people buying 4 or 7 trips and I thought to myself, as I often do when mistake fares happen, “Pigs get fat, hogs get slaughtered.” I use that line a lot when talking about mistake fares, as though somehow it is OK to only book one but booking seven is wrong. And that’s hypocritical. But that doesn’t mean I won’t fly on my ticket should it be reinstated. At least I think I will. It does mean missing the last night at a conference and getting to my ultimate destination much later the following day than I wanted to.
Read more: My $20 worth of fun with British Airways
I think that airlines had the upper hand for far too long and abused that position. And the DoT stepped in to shift the balance of power far more towards the consumer. Probably too far. And now the airlines are fighting back, trying to move the pendulum a bit closer to center. Unfortunately, however, outside of this one tiny section of the rules, the airlines still hold almost all the power in the relationship. Schedule changes are fine for the airline to initiate but not for the passenger. Ditto swapping an aircraft which might not have the same amenities as the one booked. Or, if the above mentioned NPRM goes through, altering any ancillary fee other than checked baggage costs. The airlines still have all the control in the relationship and as a customer I never get a “whoopsie” card to play. And that sucks.
And so, in my own little hypocritical way, I justify booking the one flight for a trip I need to take anyways on this mistake rate. And I wonder if the DoT is going to protect me or not. It certainly was not a “bad faith” booking in that I intend to fly the trip. But I certainly knew the fare was too good to be true.
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