This morning flights originating in the UK were pricing in Danish Kroner at a price that’s pennies on the dollar what they normally run.
You could fly from the UK to pretty much anywhere in the world in business or first class at price hovering around $100 or less.
This wasn’t a United-specific glitch, but United.com was the most common place to buy these tickets. That’s because:
- United.com lets you choose your country and thus currency in which to be charged, so it allowed booking UK-originating tickets in Danish Kroner
- It was possible to book there with a US-issued credit card.
- Not all Danish sites were offering this pricing. For instance, Expedia.dk seemed to price much higher.
United’s twitter team was just as excited about this as frequent flyers were:
However United tells Ben Mutzabaugh of USA Today that they won’t honor the tickets.
“United is voiding the bookings of several thousand individuals who were attempting to take advantage of an error a third-party software provider made when it applied an incorrect currency exchange rate, despite United having properly filed its fares. Most of these bookings were for travel originating in the United Kingdom, and the level of bookings made with Danish Kroner as the local currency was significantly higher than normal during the limited period that customers made these bookings.”
United has posted their statement online as well.
Several thousand individuals.
In a unique twist to the story, Bloomberg phoned the airline for comment on the tickets while they were still available.
I have several thoughts on this:
- I don’t have a problem with United’s decision. They acted quickly, rather than leaving flyers hanging out there making plans or with uncertainty.
- The does appear to have been a mistake, and I don’t think United should be on the hook for it.
- The only wrinkle is Department of Transportation pricing rules which prohibit price increases after tickets have been paid for. Cancelling tickets, and leaving flyers to buy them again if they wish to travel, is precisely the scenario that the DOT considered post-purchase price increase.
- I’ll be interested to see the final legal analysis. I’m confident that United must have consulted with DOT on how to handle this today.
- The DOT doesn’t like the rules they put in place just a few years ago. It was 100% predictable that the rules would require airlines to honor mistake fares, but the DOT views that as an unintended consequence and wants to revise the rules.
It’s interesting that so many mistakes have been honored, including in reliance on these DOT rules, but United has been aggressive in some recent cases refusing to honor — such as with United’s 4 mile award tickets to and through Hong Kong and with a systems issue that let flyers book awards with insufficient miles in their accounts.
Hopefully we won’t see too many threats of DOT complaints and lawsuits, although I’m confident we will.
Until next time…
- You can join the 50,000+ people who see these deals and analysis every day — sign up to receive posts by email (just one e-mail per day) or subscribe to the RSS feed. It’s free. You can also follow me on Twitter for the latest deals. Don’t miss out!
‘Tis better to have booked and lost than ne’er to have booked at all. . .
I purchased 2 seats and received e-tickets for them. Not been notified they are voided yet…
People on FT who had flights to the US are already filing DOT complaints. The general thinking is that United cancelled all the tickets (even by actual Danes paid with Danish cards/accounts) but will begrudgingly restore them if people are persistent with DOT.
Another wrinkle is EU 261. Someone had posted that those whose flights were within 14 days may be eligible. Will have to take a look at that as my LHR-IAH was supposed to be February 22.
Correct decision by UA.
I’m really happy for those who actually get the advantage of some of these mistake fares.
BUT, when it’s an obvious mistake and requires fraudulent representations to transact, the huffiness of the “poor victims” is downright laughable.
Try again on the next one. But let this one go.
UA right. Clearly abused by those booking those flights. UA could step game up further and close down the UA accounts of all the abusers for violating terms of agreement…right?
The only thing people complaining about is going to do is get the DOT to actually change the rules back in favor of the airlines. I wouldn’t be surprised if there are exceptions here for foreign transactions or the specific nature of the issue (i.e. not incorrectly filed fares). Whining about not getting something for free because of a third party mistake hardly seems like a winning argument
See, while I’d like to have sympathy for United and to say that they should be let off the hook, I seem to remember the time I was laying in the ER clearly unable to make a flight and they charged me $200 (on a $250 fare) to cancel it. As they were happy to point out to me, a contract is a contract. They were very sorry I was in the ER. I am very sorry their third party vendor can’t set up currency conversions properly.
If they’re smart, they honor bookings made by Danish credit cards or Western Union.
I don’t have a problem with UA’s decision (although those in denmark should be excluded), but shouldn’t the third party who made the error be the ones responsible and pay up to UA for lost revenue?
If you actually live in the EU and have an EU card EU laws guarantee you the same treatment regardless of your billing address, so, you’re not breaking any rules by stating your billing address is in DK if it is actually in another EU country (and if sites T&C’s state that they are not enforceable)
I take another view of this.
There are two party that did nothing wrong: United (who acknowledge in their PR that the fare was filed correctly) and the purchasers (who paid the price quoted). The only party that did something wrong was their FX service provider.
I fail to see why UA should be allowed to go after another innocent party instead of the party that actually caused the issue. I’ve filed a DOT complaint, but I’m tempted to write up a quick civil complaint and make clear that if they didn’t do anything wrong then they should 3rd party whoever did.
@Mike
What makes you think I’m stupid enough to want UA MP credit for a $80 mistake fare (remember, UA credits RDM based on fare paid now) when other *A airlines credit at 150% (or more) of flown mileage for purchased UA GF?
What, should folks be sent to the gulags for purchasing airline mistake fares? Really?
Look, if it doesn’t work out, it’s a #firstworldproblem, admittedly. But sheesh…
They would probably go after the FX service provider but the cost is immense if it’s several thousand people (mind you many probably have multiple F/C tickets). Maybe $40M? I don’t think the FX company could cover $40M. Maybe there’s some insurance that they can claim against this?
Daniel and Ryan…..spot on.
To the airline apologists that comment here, go away..
United apologists say mistake? OK, refund every person who EVER bought a nonrefundable fare but couldn’t fly it (hey, that’s a mistake too).
Everyone on Flyertalk is filing complaints. Why? Because United violated the black-letter law of the validly promulgated DOT regulation. Apparently United thinks they are above the law.
Based on reading these comments, there appear to be a lot of folks who are more than willing to pay full fares in F every time that they fly. Quite a few high moral individuals despite the fact that airlines have been hurting the average flyer and disrespecting their most loyal customers in recent memory.
Give United a break and think about what fun will happen when Delta has a mistake SkyMiles fare.
Instead of relying on charts, Delta Skymiles awards now cost whatever the award calendar says that they do at the time the calendar is presented to the customer. There’s no pricing promise or price list and nothing for Delta to point to say a price was wrong.
One mistake and Delta gets gutted like a pig at a Luau. Get your Hawaiian shirts ready….
Don’t know why some people see a difference in booking the tickets from Denmark. United certainly doesn’t. The price mistake was the same no matter where you booked the tickets from and it’s the currency error that United is citing in voiding the tickets, including those that may have been booked by Danes.
I cancelled mine out of conscience, thinking it was wrong to lie about my billing location. But, having looked at DOT’s regulations, I don’t see how they can do this legally. Regs say nothing about “third party” anything. The key is…once they take your money, they are on the hook.
From DOT website: Does the prohibition on post-purchase price increases in section 399.88(a) apply in the situation where a carrier mistakenly offers an airfare due to a computer problem or human error and a consumer purchases the ticket at that fare before the carrier is able to fix the mistake?
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.
Read more: http://www.theflightdeal.com/2012/08/10/honoring-mistake-fares/#ixzz3RUf8v3WQ
I did not get in on this, but good for people who did the airlines have true monopolies on price and basically can do what ever they want.
Maybe if airlines were loyal to the public we would not take book as many sale flights.
Apparently they won’t be refunding however.
@Nick: They will certainly be refunding or, in many cases, just reversing the payments before they post overnight. No way they’re going to hold on to that money.
I think the DOT regulation is a very good one and shouldn’t be changed.
The problem with allowing airlines to cancel “mistake fares” is that nothing is an “obvious” mistake fare? It was just over a month ago that Delta posted $1 fares to Moscow. At the beginning of February United was pricing mileage awards on partner airlines at the rate of awards on their own flight, but hadn’t made any announcement to say that was their intention. These weren’t mistakes, so who’s to say that any given low fare is a mistake or not? Maybe it’s just a promotion gone wrong? You just can’t trust the airlines to honestly report whether a fare was a mistake or not.
If Airlines don’t like having to honor the tickets they issue, they should put in the safety checks necessary to ensure that the fare paid matches the fares they filed before issuing a ticket.
United is most certainly in the right here. This was not a mistake fare that simply priced tickets at an unusually low price. This was an intentional manipulation of a glitch that required every purchaser outside of Denmark to commit fraud. The legal definition of fraud is “An intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act.” To take advantage of this sale, you had to intentionally misrepresent your billing address (an “existing fact”) for the purpose of inducing the other person (United Airlines) to act (issue a ticket at a deeply discounted foreign currency price). You cannot possibly expect United to lose millions of dollars because a group of people figured out how to temporarily scam them.
@Doug: United has not alleged fraud, nor are they distinguishing among purchasers based on whether they actually have Danish credit cards or not. Their objection is to being on the hook for the currency conversion error –regardless– of where the purchaser was located.
Without commenting on the merits of your position, your position is certainly not United’s position — to them Danes and others are equally un-entitled to have their ticket purchases honored.
@Doug: Right now you are telling strangers on the internet that they have violated a law you created that makes it “fraud” to book a cheap plane ticket. If you were a licensed attorney, you would know that in your state it is an actual (NOT make-believe) crime to practice law without a license. I suggest you steer clear of violating it in the future.
Your attempts to save United’s money notwithstanding, people will exercise their legal rights and civic obligations by filing a complaint with the DOT (Dept of Transportation) because United has chosen to violate the law.
Well, I decided not to get in on this one. Misrepresenting my billing location just didn’t feel right to me. Whether it’s fraud or not, I don’t know as I’m not an attorney, but it struck me as unethical.
I would think that the affected airlines would honor those tickets purchased without any misrepresentation (ie. Danes with a Danish address), but it’ll be interesting to see the developments from this point forward.
Perhaps the airlines should have 24 hours to cancel a mistake fare itinerary (even if ticketed) if their own policy (read: not AA) is to allow the refund of a purchased ticket within 24 hours (for a ticket issued outside of a 7 day window).
All tickets purchased for travel within the 7 day window would be obligatory (by both parties, under fare rules). Only way to get around this for passenger is full fare ticket.
Reciprocity. Thoughts?
@Doug, I did not take advantage of this, but I do expect UA to cough up millions of dollars over their mistake, just as they expect me (and you) to cough up a good portion of our earnings if we made a mistake.
That’s it, I’m suing Dans Deals for booking 14 tickets before he posted about the deal! He’s in it for himself and himself only. I bet he got 14 tickets to Israel in 25 minutes. =) Ok I didn’t get in, but good luck everyone…
I think Andrew wins the award of Stupidest Post of the Month.
Andrew, I hope you are not a lawyer because that is a sincerely stupid comment about what it means to practice law without a license. If you are not a lawyer, you can be forgiven for not realizing how wrong you are. But had you a passing familiarity with irony, it might have dawned on you that you were also advising strangers on the internet that their actions constituted a crime. If you are a lawyer, god help your clients.
I’m with Doug on this one. I’ve gotten in on mistakes before (wideroe, for example). But that’s straightforward — you go online, enter your info, and you have a ticket. This required an affirmative misrepresentation (you were required to indicate country of purchase, and you lied). You can debate what’s a crime or not (spoiler alert, it is) but I’m fairly certain a DOT complaint will get nowhere when the purchaser induced the carrier to sell the ticket only by making a false representation to the carrier. It is virtually always a defense to a claim that one was fraudulently induced.
Anyway, I don’t have a dog in this fight; I don’t have any of these tickets (but not for lack of trying, I just tried a bit too late). Good for you if these had stuck, but I wouldn’t get on my high horse because they’re not honoring these.
Just reading through the comments. It seems like United could have a reasonable case to cancel the Mileage Plus accounts of those who cannot prove residence in Denmark, no?
BTW I agree that if you purchased these from Denmark the analysis is obviously different.
Due to the widespread press, such a on this blog, it was no way it was going to live.
Many individuals took advantage of United today but as others have pointed out, how flexible is United when you make a mistake? Family emergency, schedule change, sickness, you name it, they gouge you to make a change. Hell when you buy a ticket they try to sell you insurance in case you need to make a change. Perhaps they should buy their own insurance policy every time they sell a ticket; What’s good for the goose is good for the gander.
+1 to Doug. Many legal grounds for voiding these tickets under US law. No reason to honor them, particularly when every purchaser lied about their residence and knew the price was a mistake.
Generally I think airlines should honor mistake fares when they involve mispricing of fares. But this was clearly a currency conversion software glitch and unlike other prior mistake was not solely for travel on united – united was no more responsible than any other travel agent.
This hobby turned many of you to pathetic thieves. You are not flyers but flies and cockroaches, free loaders and greedy. You demand and want to sue ? This is disgusting.
These arguments are silly and tiresome, but you guys all know that it is fine and normal to buy things from websites outside your country of residence, right? There is no fraud in selecting a Danish point of sale. Try it with Hertz some time, you might be surprised by what you find…
Boraxo is incorrect in his claim. Lots of the purchases were made in Denmark by people who are living or working in Denmark.
I used a Danish bank and was very close to CPH airport when this opportunity arose, and saw lots of other people living or working in Denmark trying to work this deal too.
Perhaps they should be honored for those folks who actually lived in Denmark before yesterday. The rest don’t deserve a thing.
I don’t know this as fact, but the etihad “sale” was through an Expedia and when one researched it on the actual etihad website, it priced correctly. Clearly this was a mistake fare that thousands took apart of. For all we know, did anyone try to price this in American dollars instead of their true local currency (dkk or aud for example)? Of so, did they price “correctly” or did these indisciudals have to change their billing location to the U.S. to take advantage of the deal. If the change was made, this makes this is very similar case. 3rd party pricing error, changed billing location, 100% different result.
The thing I am curious about is if this was a currency conversion problem then why did it only work on tickets leaving the UK. I mean I’m sure that there might be a reasonable explanation for this but it seems weird. If the currency conversion had an issue wouldn’t it change all tickets booked in DKK?
Good reference for current situation: http://thepointsguy.com/2015/02/do-airlines-have-to-honor-mistake-fares/
Let me guess, the United apologists are all bitter because they didn’t get a taste and are throwing their self-righteous indignation all over the place.
Things like fraud or misrepresentation are terms of art and require a lot more than Law and Order understanding to be properly analyzed and applied. If any of you are attorney’s I fear for your clients and I hope your Bar Counsel gets to you before you do some real damage.
United at least has something resembling intelligent legal advisors, and clearly steered away from such terms, they laid it all at the feet of their third party provider. this does raise the question, can they now mass cancel advance purchase tickets when there are last minute buyers by claiming their ISP and data center providers transmitted your tickets prematurely, or better yet that their refueling provider was late to the plane?
Why should the customer in this instance be on the hook for the acts of unknown 3rd party with who they had no contractual obligation. UA could do the FX in house, but chose to outsource. Can I blame my ISP or the cabbie for my ticket issues in the future?
UA’s website function is more about allowing purchase in specific countries rather than not allowing payment forms outside a particular country. If it were the latter the payment system could easily deny any none Danish cards. Billing information is used for authentication of the payment, and with the payments accepted it was clear that the Country is not part of that authorization.
UA can be made to honor, because if the shoe were on the other foot, they would show no mercy and everyone knows that. I give you fuel surcharges as a recent example.
https://cms.dot.gov/airconsumer/united-airlines-mistaken-fare
DOT is on the right way to confirm whether they will honor the tickets