Can American Cancel Held Reservations Within 24 Hours?

I posted yesterday about American’s amazing ~$450 roundtrip business class fares between Washington and Beijing, which were available for a few hours.

Tickets were issued and so far we haven’t officially heard whether they’ll honor the fares or not. I suspect they will, since this does seem to fall pretty clearly within the Department of Transportation’s prohibition on post-purchase price increases, and there was no “trickery” involved here.

So far everyone I’ve heard from that issued a ticket has their reservation intact. However, many people that held these tickets are reporting that they’re being canceled. Last night I specifically recommended issuing these tickets rather than holding them if you really do want to take the trip. But then again, a lot of people don’t listen to me, and are surprised this morning. šŸ˜‰

But that raises an interesting question — can American legally cancel a ticket which is on hold?

American-Hold

When you go to hold a reservation on American’s website, the following text displays:

If you are not ready to purchase your ticket now, you may select HOLD to GUARANTEE your reservation and fare for up to 24 hours.

No credit card required for free 24 hour hold.

That’s their bolding and capitalization — not mine.

Of course American doesn’t allow holds out of the kindness of their heart, but rather because it’s a DOT regulation. Airlines either have to allow passengers to hold a ticket for up to 24 hours with a fare guarantee, or allow them to cancel for 24 hours after purchase:

This notice provides guidance to U.S. and foreign air carriers regarding compliance with the customer service rule that requires carriers to hold a reservation at the quoted fare for 24 hours without payment or allow a reservation to be cancelled within 24 hours without penalty.

Anyway, my point is that while I absolutely would have recommended issuing a ticket last night rather than keeping it on hold, I don’t think American can legally cancel held tickets within 24 hours. They’re very clear about the fact that when you hold your ticket you “GUARANTEE” your reservation and fare.

There’s a difference between what the law says and how things work in practice. First let’s see if American honors the fare. If they do, technically the people that held the tickets are just as entitled to the fare as someone that ticketed a reservation… at least as far as I can tell.

And that’s one reason to book through online travel agencies. They don’t allow holds, but they allow refunds for 24 hours. In 99% of cases I prefer American’s 24 hour hold option, but this is one case where it might have made sense to ticket right away and to be able to refund within 24 hours.

So I’d sit tight, I’m sure we’ll hear more from American today…

Do any lawyers have a different take on this? If you held a ticket on this fare, is it still intact?

Comments

  1. We bought ours last night, thanks to you, and we’re waiting with interest to see what happens today.

  2. It seems to me that they shouldn’t be able to *if* they are honoring the purchased tickets. If an airline honors “mistake” fare tickets but doesn’t honor the fare-guaranteed holds on those tickets, the fare-guaranteed holds functionally don’t exist, and it would seem to me that the airline would no longer be in compliance with the DoT rule.

    It’s maybe easier to think of using the “buy and refund” option: if an airline published a fare that they’re honoring generally but because it was a “mistake” would not let you get a refund within the 24 hour window, I think people would generally agree that airline was crossing the rule.

    The real question is whether American allows the fare at all; if it does, it would seem (to me!) that the hold should be valid.

  3. sounds like they did this with all held reservation, but another data point: AA canceled my held reservation–>DCA-ORD-PEK-ORD-DCA

  4. Lucky, didnt you saw in the comments section from last night’s post that the 24H cancel fee-free policy doesnt apply to AA?

  5. You wrote “@ KoolFatKat ā€” No. American allows holds on award tickets, but if you ticket you canā€™t cancel for free.”

  6. @ Andrew — The terms on the site seem pretty clear, though, and the ticketing deadline given to everyone was 11:59PM.

  7. @ Al — Correct, if booking directly through American you can’t cancel within 24 hours of ticketing.

  8. but above you wrote “In 99% of cases I prefer Americanā€™s 24 hour hold option, but this is one case where it might have made sense to ticket right away and to be able to refund within 24 hours.”

  9. @ Al — Correct, you can refund within 24 hours if booking through an online travel agency (Orbitz, Expedia, etc.). NOT when booking through American directly.

  10. Ben- I would be really surprised if AA honors this. It was CLEARLY a mistake fare. AA’s economy fare for the same days in many cases was more than twice as much as the bus. cl fare. Also, for many of us the base fare was $0.0! Also, if you look at the recent history of bus. cl. fares between DC (or anywhere in the U.S.) and Beijing I have never seen a $450 bus. cl fare or anything even close. It would be absurd for DOT to make AA honor a clear mistake fare. Also, AA has an army of internal and external lawyers that they use for things like this. AA’s CEO is a very tough operator. Maybe you’re rt Ben, and they honor this but I would be shocked.

  11. @ John — I don’t disagree at all, but this is a case where the DOT regulations seem pretty straightforward. We’ll see soon, I guess!

  12. Hey Ben, thanks for the advice on waiting for the SWU’s. Are you planning on burning 2 SWA’s to upgrade to first? I have never been in a angled seat before is it worth it to upgrade?

  13. I had a similar experience a few weeks back holding tickets to Hawaii. I held several flights that were similar and they would get cancelled overnight. Not sure what the rules are but aa certainly seems to have some it process that automatically cancels certain held tickets.

  14. @Stuart…AA will cancel similar tickets if you are trying to hold a bunch that are the same travel plans. Say you have a ticket going from ORD-JFK Friday morning, but you forgot you had that flight held/purchased…you then try to book LAX-DEN on that same friday morning…it might let it go through, but the system will catch it and cancel it. I had this issue and couldn’t figure out why AA was canceling, then I found out I had an award ticket booked that I needed to cancel so I could complete my other roundtrip.

  15. Put DCA-DFW-PVG-ORD-DCA for $822 on hold last night. Just logged in to my AA account and the record of my hold was found but an error message states “Your reservation details cannot be retrieved at this time….Please contact AA reservations.” Interested to hear what happened to others who had their flights on hold, and how the conversation went with AA reservations.

    As an aside, as a lawyer, I will definitely fight this if my reservation is cancelled. If AA doesn’t honor the fares for anyone, then it violated the DOT post-price increase regulations. If it honors the fares except for those with holds, then it violated the 24 hour guarantee regulations. Either way, from my vantage point, AA will be in hot water if it doesn’t honor the fares for everyone, including the people that put them on hold.

  16. First, it seems pretty clear to me that the spirit of the rules precludes AA from canceling the held reservations. But if I had to make the argument in favor of AA, it would be that 14 CFR 259.5(b)(4) requires only that they allow the hold with respect to the quoted “fare” and arguably permits changes to other components of the transportation (e.g. fees & surcharges) prior to purchase. This is different than the language in section 399.88, which prohibits an increase in the overall “price” of the transportation. AA would argue that with the focus on the fare, a $0 “fare” is clearly erroneous (or perhaps doesn’t even constitute a “fare” at all) such that it need not be honored under 259.5. Of course, I wouldn’t want to be the guy having to make that argument with a straight face in court.

    From a contract perspective AA will have a problem, as it breached its promise to guarantee the reservation and fare. However, it won’t apply to the extent that the purchaser knew that the fare was a mistake. The fact of the matter is that the number of people who would actually incur damages by subsequently purchasing a legitimate fare AND going through the effort to seek compensation for the difference in price is likely pretty small.

  17. @ Dave – Don’t disagree with your analysis, except that there were plenty of people who had a non-$0 base fare, including me. My base fare was $72, along with another several hundred going to the airline in the form of fees and surcharges.

    Also, this won’t get into a breach of contract action. We will simply file a complaint with the DOT and the DOT–if it agrees with our analysis that AA violated the rules–will use its enforcement authority to penalize AA and require AA to remunerate those who were harmed.

  18. As a “holder”, I suspect that they will not release a statement on honoring the fares until the holds have expired – and by that time it will technically be too late to purchase our tickets.

    It would be a pretty underhanded way to game their own system, but not unexpected.

  19. I put the ticket on a 24 hour hold to confirm details overnight and am being told by American that the fare was not valid and the new fare is over $4,000 per person. The thing I don’t understand is with this 24 hour hold, it clearly states in the email that “Fares are only guaranteed for up to 24 hours” which says to me that this is a GUARANTEE they will hold the fare quoted. On the phone right now, they are telling me the fares were not valid.

    On the phone with American customer service supervisor who is pointing me to T&C’s online and stated that any fares put on hold will not be ticketed. She directed me to the following paragraph on the T&C’s (I told her I wanted to see something specifically in writing that states fares on a 24 hour hold are subject to change):

    (J) MISFILED FARES
    AA, as a policy, does not file nor intend to offer/file fares priced at zero (exclusive of any surcharge). Essentially, such fares do not make any economic sense. AA has introduced warning mechanisms to try to prevent such occurrences; however, occasionally fares such as these mistakenly get loaded into computer reservation systems that are not controlled by AA. Agents/customers should be aware that in these circumstances they are not allowed to ticket at these fares and AA will not honor fares of zero (exclusive of any surcharge). In the event
    that a zero fare (exclusive of any surcharge) is ticketed inadvertently, AA will void such ticket and may choose to waive, in its sole discretion, certain rules or restrictions of existing published fares as a gesture of good will.

    When I told her that my ticket was held with a fare of $20 and that this paragraph didn’t apply to my situation, she stated that the sentence that reads “Essentially, such fares do not make any economic sense.” — which includes $20 fares. When I told her I was not satisfied with this answer, I was directed to call their legal department through their main switchboard at 817-963-1234.

    Long story short, she’s not sure what will happen to fares that actually paid and were ticketed last night. I was told an email went out to the staff this morning and this was the procedure that was in place for these errors. The supervisor said she has been with American “a long time” and has never experienced this issue before.

    Any suggestions on how to push back and get American to honor the prices they clearly state in their confirmation email as “Guaranteed for up to 24 hours”??

  20. Held a dca-dfw-pvg-dfw-dca ticket overnight and pulled the trigger around noon est. Received a ticketed email within an hour….holding off on an swu call for now.

  21. @ Stuart — As Ryan says, that also happens when you hold duplicate/overlapping itineraries. Was that maybe why?

  22. @ Rusty — Yes, totally worth it. The difference between business and first on the 777-200 is much bigger than the difference between business and first on the 777-300.

  23. I’ve had held tickets canceled within 24 hours if the rules of the fare change. Meaning if it goes from a 14 day advanced notice to a 7 day advanced notice fare, they can legally cancel the reservation.

  24. Lucky… im feeling unlucky.. I held the ticket…and its gone… you think HUCA will solve this? I NEED LUCK LUCKY!!

  25. I just got off the phone with AA. I have some interesting information. Supervisor from AA.com told me that company has decided that anyone who purchased a ticket before company-wide edict was issued will have their fare honored, and anyone who did not purchase it before then will be re-priced because the fare was “an invalid fare.” So those who had a 24 hour “guarantee” hold fare who did not purchase by this morning are being told by AA that they cannot purchase the tickets, the fare is invalid, and it must be re-priced.

    In the interest of brevity I won’t get into arguing here whether this “invalid fare” position from AA is internally inconsistent given that they are honoring the fare for some but not for others. Suffice it to say there will be many DOT complaints that AA violated the terms and the spirit of the DOT’s 24-hour rule.

  26. I agree that AA’s wording on holds will cause them some heartache but there is some wiggle room. Basically put, if it ain’t ticketed, you are on shaky ground (because it is so much easier to cancel an unticketed reservation than it is for one that has been paid and processed).

  27. In case anyone’s keeping track, AA first cancelled DCA-XXX-PEK holds and then got around to cancelling other US to PEK trips. I had IAH-DFW-PEK R/T on hold and it got cancelled sometime on Tuesday.

    Will be interesting to see what DOT thinks.

  28. Isn’t this great! The big bad AA is scared of some people who booked a fare THEY LOADED. They control it not us. Let’s see next time you decided “I don’t wanna fly that trip” Hey AA get me a 100% refund OR hey AA I was in a car wreck coming to the airport can I get a refund. I did not book anything but this pisses me off to no end how this scum bag company is handling this. Why anyone want’s to defend AA is beyond me.

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