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

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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.

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