Unfortunately I was driving home from Miami last night when the news hit that United wouldn’t be honoring the four mile pricing glitch they had to China over the weekend, so I realize I’m a bit late tot he game here. My mom always taught me not to text and drive (though she hasn’t told me I can’t email or blog), so I decided to listen to her in this instance.
UA Insider posted the following statement last night on FlyerTalk and Milepoint:
Hi Everyone, over the weekend, we discovered a united.com programming error that allowed customers to obtain Mileage Plus travel awards to and from Hong Kong for as little as four miles roundtrip per person, substantially below published levels, which we disclose to customers. We have since corrected the error and will be in contact with customers who have tickets issued at the incorrect award amounts. Customers will be given the choice to redeem at the correct mileage amount or re-deposit their award with all fees waived. We regret any inconvenience this has caused you, and appreciate your understanding.
Director, Customer Insights
Let me start by saying that I don’t think any of us are (realistically) “out” anything here, so I’m hardly in the “we deserve 50,000 miles compensation” camp. I think a lot of people get in on these deals in part because it’s fun to be part of these. It’s always exciting to see how the airlines handle them, and if they honor them it makes for one hell of a story 10 years down the road. If you’re the type that easily gets worked up and needs immediate closure, mistake fares probably aren’t your thing.
With the above in mind, here are some thoughts and outstanding questions:
Clarification on the DOT rules
Obviously for many people this isn’t over, and I’m sure we’ll see plenty of arguing back and forth, maybe threats of lawsuits, and possibly even a lawsuit or ten. In my last post on this pricing glitch I posted about the new DOT regulations, which in part read as follows:
Therefore, if a consumer purchases a fare and that consumer receives confirmation (such as a confirmation email and/or the purchase appears on their credit card statement or online account summary) of their purchase, then the seller of air transportation cannot increase the price of that air transportation to that consumer, even when the fare is a “mistake.”
A contract of carriage provision that reserves the right to cancel such ticketed purchases or reserves the right to raise the fare cannot legalize the practice described above.
In a way this situation is the first of it’s kind since the new rules, so it would be great to get some clarification regardingthe regulations as they apply to award tickets. Confirmation emails were received and for the most part credit cards were charged for the taxes, so that does seem to meet the above guidelines. The question is whether the DOT regulations apply to award tickets, and also whether the above guidelines only apply to raising the cost of tickets or also apply to outright canceling tickets.
Clarification on United’s stance on honoring “mistakes”
A Wall Street Journal article from a while back cites both United and Continental as saying they honor mistakes, no matter how large the error:
UAL Corp.’s United Airlines, Continental Airlines Inc., Southwest Airlines Co., JetBlue Airways Corp. and Singapore Airlines C6L.SG all say their policy is to not cancel tickets even when a mistake is discovered, no matter how large the error.
“That is the right thing to do,” says United spokeswoman Robin Urbanski. In 2007, United honored a business-class fare from Los Angeles or San Francisco to destinations in New Zealand that was missing one zero: it was sold as $1,062 plus taxes and fees instead of $10,620 plus taxes and fees.
While there’s a “new” United, it’s interesting to note that both Continental and United had this stance, so it seems like the new airline would have the same, no?
When will members be notified?
In the world of mistake fares, with each passing minute of not hearing from the airline, the chances of the ticket being honored go up substantially. While United has posted a statement on FlyerTalk/Milepoint, that doesn’t really qualify as contacting members. It has now been 48 hours, and I don’t think most people have been contacted by United yet.
What happens to those that already flew?
The most interesting aspect of this has to be those that booked a ticket for a same day departure and have already flown on their tickets. What happens to them? Will United just deduct the miles from their account? What if they don’t have enough miles in their account? Will they cancel the return portion of the ticket if they’re presently in Hong Kong? Now that’s a sticky situation.
Playing armchair CEO — what I would have done
If you got in on the deal, chances are your “solution” is United honoring the fare and creating “goodwill.” But I put quite a bit of thought into what I would do if I were United. I came up with 100 different solutions, and most of them just didn’t put United in a “winning” position. So I thought of what would make United look good and at the same time cause most people to voluntarily cancel their tickets, which I suspect is what they want.
I suspect that most people that took advantage of this deal booked several tickets. And I suspect that a vast majority of them did so because it seemed like a fun way to fly first class to Asia for a weekend, at least for those people that ticketed 10+ reservations. So from United’s perspective I think it would have made sense to honor the tickets, but only for coach travel. I’d be willing to bet it would cause 90%+ of people to cancel their reservations, and at the same time it would’ve made United look good. The average consumer reading a new story about this would think United is an “airline of their word,” while a vast majority of people that got in on the deal would have canceled. Again, it just seems like it would have mitigated the back and forth on their part, since they would at least give the consumer an option.
Anyway, while it’s over for me, I suspect it’s far from over for some, and I’ll certainly be sitting on the sidelines with my popcorn seeing how it plays out.