The Department of Transportation has a sweeping rule on the books that should require airlines to honor all mistake fares because canceling mistake fares constitutes “increas[ing] the price” of air transportation after purchase, which is forbidden. (It is an increase in the price because canceling the ticket means the only way to fly the route is to purchase a new, more expensive ticket.) Check out all the legalese in 14 CFR 399.88 if you’re so inclined.

However, the Department of Transportation completely ignored its existing rules in allowing United to back out of $100 First Class tickets between Europe at the United States offered in krona through its Danish website in January.

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Now the Department of Transportation is going to change its rules presumably so airlines don’t have to honor mistake fares, and in the meantime, will not enforce 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.

Except…oops! Requirement number two is going to keep mistake fares alive. Look at what airlines need to reimburse you [emphasis mine]:

These expenses include, but are not limited to, non-refundable hotel reservations, destination tour packages or activities, cancellation fees for non-refundable connecting air travel and visa or other international travel fees. The airline may ask the consumer requesting out-of-pocket expenses to provide evidence (i.e. receipts or proof of cancellations) of actual costs incurred by the consumer. In essence, the airline or seller of air transportation is required to make the consumer “whole” by restoring the consumer to the position he or she was in prior to the purchase of the mistaken fare.

Next time you book a mistake fare, immediately book non-refundable hotels, tours, and other airfare related to the trip. (This is the opposite of the advice before the rule change when it was better to wait to see if a fare would be honored before booking any other parts of your trip.)

Now the airline can either honor the fare or reimburse you hundreds or thousands of dollars worth of expenses and refund your ticket. They’ll probably just honor the fare, but if they don’t, you now have a bunch of reimbursed hotel nights, tours, and other flights, and you are free to book alternate transportation to get you to those things. That’s a win either way for the bookers of mistake fares, and a loss for the airlines.

It’s ironic that the Department of Transportation’s attempt to kill mistake fares not only doesn’t kill them, but might cost the airlines more money when dealing with people who are gaming the system. I eagerly await the Department of Transportation’s attempt to close the new loophole it has opened after the next big mistake fare. Mostly because I want to see what new loophole closing this new loophole will create. 😉

I don’t think mistake fares can be killed. As long as human or computer error offers them, we will benefit. It will be impossible to come up with a rule that allows the airline to completely back out the mistake fares that isn’t completely unfair to non-gaming consumers. (For instance, the rule: “airlines can cancel your ticket whenever with no compensation” would solve the mistake fare “problem” but would be extremely unfair to all flyers, so it would never be implemented.)

Your Take

What do you think of the new rule, and do you think mistake fares can ever be killed by airlines or the Department of Transportation?

 

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