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Korean Air Bungles Palau Fare Mixup

by on November 15, 2011 · 38 comments

in Mileage Runs, Travel Industry

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Airline pricing is a science that I’ll probably never understand. Most of the time I’m frustrated with how much tickets cost (especially last minute tickets), but once in a while amazing deals come along that finally make you feel like you got a great bargain. This year alone I went to Stockholm and Copenhagen on Delta/KLM for $149 total roundtrip and Madrid for $260 on American (and upgraded to business class with systemwide upgrades!).

In early September of this year Korean Air had a fare listed from the US to Palau (Pacific Island nation for those geographically challenged) on certain dates for as low as $560 roundtrip from NYC and $485 from the west coast. While I didn’t get in on this deal (frankly way too long in coach for me!), it was available on popular booking sites like Expedia and Travelocity for more than 4 days and hundreds of savvy travelers got in on the deal and got ticketed and confirmed reservations.

Fast forward two months and Korean Airlines ends up sending a letter to those who purchased this fare letting them know they wouldn’t honor the fare, but they would refund and give $200 towards future Korean Air travel (plus pay for any non-refundable hotels/incidentals).

“”At the beginning of September, an erroneous fare was briefly published for travel on Korean Air from North America to Palau. We regret to inform you that Korean Air is unable to honor this erroneous fare for travel and has cancelled all tickets, including yours.”

In my opinion this is completely unacceptable for a number of reasons:

1) Two months to make a decision on a “mistake” is totally ludicrous. I would understand their position if they caught it right away and let people know within days. However, holding hundreds of thousands of dollars of passengers money for months and then offering a pittance for people’s troubles is corporate irresponsibility at its finest. I mean, who the heck would want to fly Korean Air again after their vacations were ruined?

2) This fare was not a mistake fare in the sense that it was something ridiculous, like 2 cents or missing a digit. It was an actual fare, albeit for travel agents, but it was mistakenly published for anyone to buy. From my perspective, if you are a company that does not invest in technology or the audit process to catch such mistakes, then you should eat the cost when those mistakes happen.

3) Airlines charge an arm and a leg when passengers want to make changes. Why should an airline be allowed to unilaterally cancel valid tickets because it’s no longer in their best interest to honor them? I understand this may be legally allowed via the contract of carriage that they created, but it still doesn’t make it right.

4) There are more damages than just directly related non-refundable hotels and incidentals. Some people were supposed to fly as early as this week.  Not everyone has extreme flexibility when requesting vacation from work, so there are now people stuck with time off and nowhere to go – and good luck finding a last minute ticket for any reasonable price these days. Some people also spent hours planning their Palau vacation and now all of that time was wasted for nothing. Some people purchased diving certification and bought other related items that will not be refunded by Korean.

In fact TPG reader Daniel emails me, “My fiance and I had booked this trip for our honeymoon. Now, two months after it being ticketed, we were emailed that the tickets were being cancelled. Now if we can’t get Korean to honor, we’re stuck starting from scratch with less than two months to go to plan a new honeymoon! This was by no means a free flight that we booked (~$700/per person) it just worked out to be a pretty good deal with good timing for us to what seems like a beautiful place … we thought at least.”

I’m not a lawyer and I’m not trying to say that Korean Air violated any laws here. What I am saying is that I think their actions are irresponsible and completely customer unfriendly. As consumers, especially in the social media age, I think it’s important that we demand corporate responsibility. Even though I didn’t book one of these fares, I still support the group of people who are now stuck in a really bad situation.

If you feel so inclined, Korean Air can be Tweeted @KoreanAir and their US based VP who emailed everyone with their cancellation notices is Johnathan Jackson, @kalman_jj. TPG reader Leigh put together a handy media toolkit for those who want to complain in a constructive way (this is good to have bookmarked for any future flight issues you may encounter).

In general, I hope Korean and the online travel agencies that sold these tickets can work together to do the right thing and honor this fare. I’ve never flown Korean, but their current advertising campaign portrays them as a classy, sleek and customer-focused airline and unfortunately I’m not seeing any of that based on how they’ve handled this situation.

Should Korean Air honor the Palau fares?

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  • notsosmart

    Going back ten years (or roughly as far as I have been active on FT), 90% of fare mistakes have been honored. Asian airlines are the ones most likely not to honor such mistakes (TG!!!), and generally, unless the mistake is $0 base fare or an outrageously cheap F ticket, the fare gets honored. I’m surprised that KE decided on this route… perhaps some bad publicity might have changed their mind. But, as I always say, c’est la vie, on to the next one. ;-)

  • http://www.thedivingblog.com David

    If I was an airline competing with Korean Air for routes, I’d step in now and work with those passengers left hanging to see if we could still get them to Palau for a decent price. Unfortunately, airlines are not generally in the business of “wowing” people like this.

  • Goo Jun

    Another disappointing fact is that Korean Air proposed to sell tickets with the same itinerary if people pay additional ~$350, using the $200 voucher they proposed. If they can accomodate people on the route, why should the customer pay additional money for KE’s mistake?

  • Bill Silverstein

    I have flown Korean air in 2002. While the flight was nice and I liked the food, I had problems with them keeping their word about miles promised. I have no faith in Korean Air keeping its word and believe as a company Korean Air has no honor.

  • Mitch Cumstein

    How could Korean Air do this? I thought that one’s honor (NOT money) was most important to Asians.

  • S2spero

    im still fighting with them. im hoping they change their mind too. really screwed up our trip. and if we werent going to palau, we would have jumped on the megado for sure. so now we’re even more pissed off!

  • Nathan Keirn

    I agree, this is totally unacceptable!

  • Nathan Keirn

    Welcome token racism!

  • Bill Silverstein

    I’d say sue them. To me, IANAL, it is simple breach of contract. I would argue that their terms of contract are unenforceable contract of adhesion. Where it had been months, it can’t be claimed to be a mistake.

    The imposition of a term that says, that you must pay for changes, but that Korean Air could change the flights or cancel them without consideration to you is clearly unfair and against public policy.

  • REL

    As an impacted customer. I hope Korean Air realizes a customer will provide worth of mouth and reference of a great flight, service, and ideal path to return to AsiaPac region. Sometimes your best advertisement is new diverse customers. Instead, they wish negative ostings on their FaceBook demonstrating you never have a confirmed seat because it can be taken away at any point not because of flight irregularities but due to corporate management decision. I was told via email they will cancel and issue me a $200 voucher for one year for each ticket on Nov 10th but the voucher was issued on Nov 7th so decisions/choices were made before courtesy to advise the customer.

  • REL

    As an impacted customer. I hope Korean Air realizes a customer will provide worth of mouth and reference of a great flight, service, and ideal path to return to AsiaPac region. Sometimes your best advertisement is new diverse customers. Instead, they wish negative ostings on their FaceBook demonstrating you never have a confirmed seat because it can be taken away at any point not because of flight irregularities but due to corporate management decision. I was told via email they will cancel and issue me a $200 voucher for one year for each ticket on Nov 10th but the voucher was issued on Nov 7th so decisions/choices were made before courtesy to advise the customer.

  • http://twitter.com/WanderngAramean Seth Miller

    BA basically did the same thing on their India “mistake” a while back, with a similarly crappy apology offer. Can they do it? Yes. The laws are in their favor. It is a horrible customer service move, but they can do it and they will so long as they feel it isn’t going to hurt their brand sufficiently. And my guess is that, in this case, Korean is correct that it won’t.

    Take the deals you can get honored and run with them. The won’t always be so great.

  • Conway Park

    There are so many ways that Korean Air has messed up. Their actions show that they are incompetent and callous. It is one thing to make the mistake….but to take TWO MONTHS before acting on it is just wrong.

  • mike a.

    I too am in the same boat. Bought 2 tickets (lax-icn-ror) and now am stuck with nothing.

    I swear after this over I’m never flying KE again.

  • http://pulse.yahoo.com/_7Q2PN6NMEVMYRA3DDDPTMAC24I Robert

    I hope the affected passengers challenge this in court, if necessary. Waiting 2 months to cancel an airfare as a “mistake” — especially a $500 airfare — is mind-boggling insensitivity and stupidity. I didn’t buy this ticket (frankly, it wasn’t cheap enough for me to drop everything and head to Palau), but I was impacted by BA’s decision to cancel their India fare a couple years ago. At least they did that within a week (I had already invested time in planning my itinerary, and had made some refundable hotel reservations). It would be unimaginable to me that I could get an airline ticket cancelled for a “mistake” 2 months after booking it. The hardship is likely to be significant for many travellers, like the honeymooners quoted in your story.

    Seems to me we might need some legislation that limits airlines from claiming “mistake” more than a week after ticketing. That seems fair to both airline and customer.

  • Guest

    How could they do this? Even if it’s not illegal, it’s highly immoral… I’ll have to remember to un-check the “Korean Air” box the next time I’m looking for Asia flights.

    I travel to Hong Kong and Singapore a lot on business, and try to work in stopovers when I have the time. I guess I won’t be stopping over in Seoul any time soon!

  • thrive

    those fares definitely border on reasonable. anyone who purchased anything else that is non-refundable in anticipation of his palau trip would win a suit for those damages on the theory of detrimental reliance. this is not legal advice, merely travel advice.

  • http://drcredticard.weebly.com Dr. Credit Card

    Very bad decision from Korean Air! I think it is downright stupid doing this: irate customers who will never fly them, bad image and reputation, plus paying non-refundable hotel reservations. Recently they are spending quite a bit on advertising their A380 non-stop to Asia but the decision like this will certainly negate any potential customers once caught on social media. Good job TPG!

  • JohnnieD

    I hate to disagree, but the deck is stacked against the purchaser. Take the deals that are honored and move on when they are not.

  • Anonymous

    Right but don’t you think less deals will get honored if we allow airlines to make customer unfriendly decisions with no repercussions?

  • Anonymous

    But are the laws really behind them? Didn’t you take BA to court and win?

  • JohnnieD

    There is no doubt that this is a short sighted decision. I now include Korean with BA and will avoid them completely. As bad as Delta availability is, I like going to Copenhagen for $151 ai …….

  • MW

    So essentially what this means is that if I book what I think is a great fare for a flight – and later there is a huge demand for my seat, any carrier can just randomly decide that they made a mistake, cancel my booking, and put the seats back into inventory so they can sell them at a much higher fare? This so wrong on so many levels. I hope KE gets hand slapped in a big way for this. Absolutely outrageous and a really bad precedent if they do get away with it. We should all be outraged – one day this could end up happening to all of us – and not necessarily on a ‘mistake fare.’ If it was 2 days/even 2 weeks notice – possibly understandable. But 2 months? Scary and so wrong.

  • Josh_brooks

    So they are willing to go through this publicity nightmare and also refund tons of passengers costs, but they won’t suck up a $150 ($350-$200) loss per ticket?

  • Mbklandmark

    Can I sue them in the jurisdiction I reside in? Or do I use the venue in which KE has the U.S. office in?

  • Guest

    Josh, to be clear, it was $350 = $550-$200 per ticket.

  • Dave

    Exactly, TPG.

  • Andycheung

    After 75 days of confirmations my 4 tickets were canceled by Korean Air yesterday but still no monetary refunds. Holding $2,300 hostage is just ridiculous.

  • Pathguy123

    Sorry to everyone that’s affected. I don’t think I’ll be flying Korean Air in the future. This is a dumb mistake on their part.

  • Asfasdfa

    DOT should give KE a massive fine of at least 7 figures

  • Mbklandmark

    나쁜 사기꾼놈들. 이번일때문에 대한항공 이제않타. 환불즉시하고 상황을 빨리 적절하게 해결하라.

  • Asiansm Dan

    In my opinion , KE and the OTA are co-responsible for the screw-up. Let them equally divide and swallow their error so, they will learn, pay attention and there will be less fat finger fare in the future. Why penalize the consumers who feed them. Only 300 tickets, how many empty seats KE fly a day ? Why KE make a fuss for a bad reputation ? Or just some yield managers at KE are afraid to lose their job and try to shovel their errors to the OTA and the consumers to save their face.

  • AE

    Please join the new facebook group ‘Korean Air Palau Class Action Lawsuit’. Together, our voice will be heard.

  • AE

    Check to see if they have a presence in your city, including offices at airports, and they do in NYC. Please join the new facebook group ‘Korean Air Palau Class Action Lawsuit’. Together, our voice will be heard.

  • AE

    Please join the new facebook group ‘Korean Air Palau Class Action Lawsuit’. Together, our voice will be heard.

  • AE

    Please join the new facebook group ‘Korean Air Palau Class Action Lawsuit’. Together, our voice will be heard.

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