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What’s “Up In The Air” With the United Asia Mistake 4 Mile Awards?

by on July 19, 2012 · 42 comments

in United

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Update: As a Thursday evening around 7pm, all tickets for travel after July 21, 2012 have been canceled by United. If you had enough miles in your account, they may still show, but United pulled the correct amount of miles, so if you want to cancel and redeposit, you can do so with no fee. I’ll update more when I have more details. In the meantime, check out United’s post on Flyertalk here.  I’m not shocked, but I do think it was poor form for United to cancel the tickets without ever communicating directly with the people who bought them.

Well it’s been a roller coaster week! The fun we had on Sunday with the United mistake 4 mile award tickets to China has officially developed into a national news story that is still developing. For anyone who is unaware of whats going on, here’s a quick rundown of what happened:

Sunday afternoon: View from the Wing blog reports that a reader was able to purchase an award from China to the US in United First Class for 4 miles and $29.60 cents. What a steal! I was able to book a Hong Kong- JFK First class ticket at 1:33pm ET on Sunday and posted about my success as word began to spread through the blogosophere and social media. Shortly before 3pm ET, United disabled the error and even took out Hong Kong as a destination on united.com as they sorted the issue out. Everyone who was able to book was officially in “wait and see” mode because you never really know how these will play out. Several people booked travel for Sunday evening and they were able to print boarding passes and fly without issues. A promising sign.

Monday July 16, 2012 9:08pm: United’s offical rep on frequent flyer site Flyertalk makes a statement:

UAs Official Response to HKG Ticketing/IT Error: Redeem @ Correct Amount or Redeposit

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.

Shannon Kelly
Director, Customer Insights
United Airlines

At this point,most people pronounce the deal dead (myself included) and wait for the inevitable email/call from United explaining the mistake. I said all along that I wouldn’t fight this- if it worked out great, if not- move along to the next deal.

Tuesday: No word from United and my reservation still shows ticketed and confirmed. I start getting calls from national media outlets asking for details on the story.

Wednesday: Still no word from United and my reservation still shows ticketed and confirmed. This officially becomes a national news story with outlets like the Wall Street Journal, ABC News and MSNBC running stories stating that the Department of Transportation is looking into the issue.  United updates their statement to include “We have corrected the error and will cancel tickets at no cost and waive all fees for customers who were issued tickets without sufficient miles in their accounts to complete their transactions. However, if those customers have already begun their travel, we will provide return air transportation.  For customers who had sufficient miles in their accounts to complete their transactions, the correct number of miles was deducted at the time of booking and their travel is not affected.” I only had 11,000 miles in my account and to date none have been deducted for my trip and it still shows confirmed. By the end of day, still no contact from United and I even called to change a separate flight and asked about my Hong Kong ticket and the agent said she had no idea what was going on. Seems about right.

Thursday: The national news story continues and still no word from United, but I’m still showing my reservation as ticketed and confirmed, although my travel isn’t until November so I’m not really worried about it. Many people are supposed to travel this week and are anxiously awaiting a response, but so far so good- those who have flown this week haven’t had any issues.

I have to think that United ran into legal issues with the DOT, or else we’d have been contacted by now and the tickets canceled. The most important part of this story isn’t whether I’ll get to fly in first class for just a few bucks (I do that all the time on award tickets), but whether the Department of Transportation’s new consumer protections actually have any teeth. They state:

Section 399.88(a) states that it is an unfair and deceptive practice for any seller of scheduled air transportation within, to, or from the United States, or of a tour or tour component that includes scheduled air transportation within, to, or from the United States, to increase the price of that air transportation to a consumer after the air transportation has been purchased by the consumer, except in the case of a government-imposed tax or fee and only if the passenger is advised of a possible increase before purchasing a ticket. A purchase occurs when the full amount agreed upon has been paid by the consumer. 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. The Enforcement Office would consider any contract of carriage provision that attempts to relieve a carrier of the prohibition against post-purchase price increase to be an unfair and deceptive practice in violation of 49 U.S.C. § 41712.

Last year I bought a $3,700 first class Cathay Pacific ticket on AA.com, that apparently was a mistake fare. Nine days later American told me the fare was no good and that I’d have to fly AA via Japan or get a refund. I didn’t like either option for various reasons, but in the end they canceled it and basically told me “tough luck”. I think that situation was much more of a grey area and I wish the DOT rules were in place back then, because I’m sure American would have been forced to honor the fare. Same thing with the Korean Airlines fares to Palau, which they canceled two months after they ticketed and confirmed passengers! I though that situation was really messed up – the fare was cheap, but nowhere near “free” and people had made plans around the airfare.

This United case is very interesting, because it’s probably the most extreme example we could ever ask for and will set a powerful precedent. The flight I am ticketed to fly is currently selling for $11,764 and I got it for 4 miles and $35.50. If the DOT makes United honor these fares, you can be assured that any future mistake or “amazing deal” in the future should be honored, which will be a big win for consumers.

That being said, I totally understand that this could be a huge financial hit to United and they have a responsibility to their shareholders and employees. But they also have a responsibility to their customers and if their IT systems are so poor that they can’t catch pricing errors, they should probably invest in better technology. Sometimes it takes big mistakes like this for companies to fix their internal issues, of which United had plenty during their Continental systems merge in March when customers had to wait hours to get through to customer service agents and many itineraries were error ridden.
 

Stay tuned as this saga develops. If you want to see me speak about it I’ll be on CNN Headline News at 4:15pm ET today to share my thoughts! Feel free to share yours in the comments section below.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Mommy Points

    GL on CNN! I’ll be sure to tune in. ;)

  • dhammer53

    TPG,

    You left out your interview that I heard at 0600 this morning on NPR.

  • HoKo

    @TPG I have a flight departing this Monday and am starting to get antsy since I haven’t heard from UA. I booked the ticket from an account that has 260K miles (the price would’ve been around 320k since it was a standard award). I am worried that they may zero out my account retroactively after I’ve already flown. What do you think, should I fly on it if I haven’t heard anything by Mon?

  • Gabrielexposito

    I’m also flying on Monday/also getting antsy!

  • thepointsguy

    You raise a very good question. If they don’t contact you before you fly, I’d find it hard to believe they’d be able to retroactively debit you the miles after you’ve flown since they’ve let others fly on the deal. I’d wait and see- I imagine we will know more by Monday, but I know that doesn’t help ease your nerves now!

  • Brooks

    Nice summary, thanks. It’s been interesting following this saga, especially with a trip at stake. I wish I had the flexibility and courage to have booked a flight for earlier this week!

  • Jeff Rose

    I’m no fan of (most of) the airlines, but this story really churns my stomach, and I’m going to side with United for probably the first and last time of my life. This was no “deceptive or unfair” practice. This was a clear, obvious, and extreme mistake. This is different than a $3,700 first class Cathay Pacific ticket. That was a mistake, but could reasonably seem like a bargain or a promotion to someone coming across it online. In that case, the consumer protection practices should kick in when the airline later says no dice, given that people reasonably relied on that price and probably scheduled plans around it (perhaps non-refundable hotels, etc). But this one? Anyone looking at this had to know that 4 miles was absolutely positively ridiculous and a clear mistake. So I fail to see how anyone was deceived when later on United says, guess what — it was a mistake. It’s like having dinner at an expensive restaurant and getting charged $14 for the porterhouse vs getting charged $0.14 for the porterhouse. One may have you thinking you got a good deal. One has you thinking the waiter needs more sleep. Applying deceptive practice safeguards to this 4-mile case will only give ammunition to those who want to get ride of such safeguards. So a ‘win’ today could turn into a big loss tomorrow. For all of us.

    And while Brian’s “maybe this should be an example for United so it can fix its IT” argument is easy to understand, let’s understand, too, the implications of making United absorb this example. United isn’t going to lose money on this. They will fire the guy in IT who made the mistake, and raise some fees and fares to square things on their books. Everyone other than United will pay in the long run.

    Look, if you got in on this ‘steal’ (and I’m not even sure the quotes are needed here), and it ultimately comes through for you, more power to you (though personally, I’d still wonder about who was *really* paying for my flight). But the error was found, United will ultimately square the reservations, and everyone (including the national news media making something out of nothing) needs to move on.

  • http://twitter.com/mgalicki Mike Galicki

    BBC World Service covered this as well this AM(GMT-8) The reporter mentioned that the DOT might not be able to help because the item was priced correctly at 120,000 miles it was only the shopping cart that was broken. So United could basically say we are adjusting to the correct number of miles.

  • Alan

    Hi TPG, I booked the ticket while I am enough miles in my account. All that I wanted now is to have the miles redeposited to my account without incurring the redeposit fee. Since the flights are schedule tomorrow, should I no-show the flights and wait for further announcement from UA? Please advise, thanks man!

  • thepointsguy

    Id call and tell them you want to cancel. They should redeposit the miles at no fee- if not, escalate to a supervisor and point then to United’s statement on the issue

  • Art

    The DOT rules may say they can’t raise the price, but I don’t see anything about canceling tickets.

  • TPG Intern Ryan

    The DOT says, “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.” This means they can’t use the clause, “we reserve the right to cancel any ticket” in this situation.

  • CJ

    I’m starting to wonder if they’re just going to let everything continue quietly, just to avoid setting a precedent by announcing that they’re honoring the tickets.

  • hkflyer

    I am no fan of airline company too, but I don’t think they should honor these. If it is a mistake fare due to missing fuel charge or so, I would believe that the airline company should just honor it since the general public may not discover that due to complicated price structure. However, these award tickets have a very clear price structure, and I believe United has every single right to cancel the tickets.

    It was fun for me to ride along at the beginning, but it becomes very disgusting when people starts suing the airline for not honoring this obvious mistake. I feel a bit ashamed now to be in this community (as some of my friends think I am super greedy), and hope all bloggers can start moving on to other travel topics.

  • Guest

    At either of those prices, you are eating a very bad porterhouse.

  • Alan

    I called UA, asked for the redeposit and requested the waiver. The agent was aware of the 4-mile glitch and put me on hold for about 10 mins. She then redeposited the miles to my account while waived the 100 USD fee(as I am an Premier Gold). The new balance was refreshed right away and according to the agent, the fees/taxes related to the issuance of the tickets will be debited back to my credit card soon too.

    Thanks for your advise!

  • Jason

    Jeff Rose, couldn’t have said it better myself!

  • kidsmeetworld

    Why couldn’t United contact each person, explain that it was a mistake and offer a voucher — many will have already made plans and not be able to take them up on it, but many will be reasonable and accept it.

    Personally, I can’t imagine NOT seizing the offer if I came across it, but I also can’t imagine refusing to compromise if United came to me and treated me respectfully. Ya know, like a human being. We’ll see if they are capable of that anymore.

  • tringuyen82

    i agree totally. treat me like a human being and ill act like a responsible individual. i havent heard a word… but perhaps DoT has their hands tied? and posting on FT isn’t a response.

  • Jim

    Nice job with your interview!

  • Mwwalk

    I really don’t think United is losing that much money on this. Pretty much everybody I’ve heard of that got in on this deal went for first class seats. Most (~90%) of first class seats don’t get sold for cash, people use miles and upgrades. So how much cash are they actually out? Maybe a few million. But I bet it’s less than all of their ticketing and last minute redemption fees from the last year, so I don’t feel too sorry for them. To a company like United, a few million is almost nothing. However, if they agreed to use the money they save to upgrade the IT systems and increase the number of carriers bookable online, I’d cancel my 4 tickets right now and with a smile on my face.

  • HoKo

    Looks like all tickets have been cancelled. Bummer

  • mattolo

    According to Flyertalk these tickets are being cancelled as I type this. Have to say I’m siding with United on this one. Congrats to those few who already flew.

  • Will

    My itinerary was just cancelled by UA, might want to check yours.

  • Davis

    Mine were just cancelled a few minutes ago – no email or heads up, but they now show cancelled when I login to United…

  • GKS

    Checked my booked trips today and United cancelled the Hong Kong booking. But didn’t send an email explanation or anything, just cancelled it. Can they do that?

  • emajy

    Looks like the flights are being cancelled. Mine has disappeared :-(

  • Andrew L

    Gone.

  • Jason

    Extremely well said.

  • thepointsguy

    Mine were canceled too- pretty bad customer service considering they never contacted their customers directly or offered the option to use the full amount of points

  • Sharon Miro

    Just found that United has canceled my reservations. No email nonotification of any kind.

  • Chrisbaxter22

    Hilarious. They aren’t treating you respectfully or like a human being if they don’t send you a personal email explaining why they are canceling a ticket which you tried to scam them for bt taking advantage of an obvious computer glitch. Pots and kettles come to mind here.

  • Fishesswim

    I just noticed flights that were ticketed for end of Sept and Mar next year have both been cancelled. Still no word from United though.

  • Mooper

    The DOT regs cite mistake fares, but this is moot when the mistake isn’t remotely believable. Had they charged half the miles they were supposed to, people could invoke the DOT regs, detrimental reliance, or use a similar approach. However, charging 4 miles was no different than charging a unicorn, as neither was a believable offer by a reasonable person, meaning that the customers were knowingly entering into an invalid contract.

  • HikerT

    Exactly.

  • Phonetime07

    very well said

  • Poroto

    So we need to start categorizing errors?
    So, if Cathay lost around 7k is okay, but if United looses 10k is not okay?
    I get your point Jeff, but a mistake, is a mistake, is a mistake.
    This are my 4¢ or 4 miles.

  • Poroto

    What scam?
    Last I read they made a mistake. Nobody is scamming United, if their IT people/software sucks, not my problem.
    Nobody did anything illegal.
    And btw, if this error is costing United, zero.
    Then this should cost nobody their jobs!

  • Happytraveler

    Just return frommy HK trip.
    The trip 4miles can buy.
    Plus I got some extra free hotels nights because of he typhoon.
    Awesome.

  • http://www.facebook.com/umguy Victor Warren

    Did anyone ever hear from the DOT regarding this?

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