American was pricing Brazil-issued tickets with the wrong currency conversion. This was posted on Flyertalk on August 20, and a bunch of people purchased all kinds of tickets at ~ 90% off.
I was offline that entire day that day, the whole day was blocked and I had about 300 miles of driving to boot. I didn’t cover it at the time.
American confirmed through several sources that these fares would be honored.
American Airlines will honor mispriced fares that were booked last week in select international markets. We hope customers enjoy their experience with American and book with us again in the future.
Now I’m seeing a bunch of reports that several folks are having their itineraries cancelled. It seems that’s predominantly tickets with travel not originating in Brazil:
One user reports booking an economy roundtrip from Seattle to Rio de Janeiro for US$175; others are flying as far as Europe and Australia without touching Brazil, and sometimes not even flying on flights operated by American.
I reached out to American to find out what was going on, cancelling tickets after giving a statement saying they would be honored:
American Airlines is honoring the overwhelming majority of fares that were the result of a technical error in currency exchange rates. After reviewing the bookings, a small number have been canceled based on how the person portrayed his/her country of origin.
We price and sell our tickets on the assumption that customers give us honest, accurate information. Some bookings may be invalid because of inaccurate information given to us.
If you disagree with our decision, please provide to us documentation proving that your country of residence is Brazil. We will consider reinstating your ticket.
By ‘honoring the overwhelming majority of fares’ I assume they mean tickets by folks in Brazil who were buying travel every day, prior to the posting on Flyertalk (and perhaps those who booked travel originating in Brazil rather than simply causing an itinerary to be priced in Brazilian real).
And that “how the person portrayed his/her country of origin” really refers to the country listed as part of the billing address rather than actually their ‘country of origin’ or residency. American does not require customers to provide their ‘country of origin’ in order to purchase tickets.
So after giving their initial statement they would honor the fares, American must have received legal guidance (either from the DOT, from Brazil, or both) that they weren’t under any legal obligation to honor these tickets. The especially interesting thing here is the initial statement that travel would be honored, followed by the cancellation of tickets. That’s awkward.
My own view is that how one fills out a billing address isn’t material, as long as the individual provides proper payment for services. Plenty of airlines accept payment in forms that don’t require a billing address at all, although in this case the fares were available when pricing in Brazilian real only which required a Brazil point of sale.
American asks for credit card details to process payment, and information was provided by passengers in order to provide payment for tickets. In other words, sufficient accurate information was provided by customers to process payment. The only entity here that really cares about billing details is the credit card company so that they can decide whether to approve charges or not.
American does not actually care about billing address, they aren’t taking a moral stand over customers providing ‘inaccurate information’, instead they’re using the precedent provided to them by the DOT’s handling of the United Danish kroner mistake fare to dishonor the bookings.
Don’t get me wrong, I don’t actually think an airline should be forced to honor mistakenly-issued tickets. I do, however, think that when cancelling mistake fare tickets they should have to offer prompt guidance and stand by that guidance.
Here customers were offered a price, and accepted that price. I would have been fine with American letting flyers know within 24-48 hours about the mistake. These tickets were ~ 90% off of usual pricing, enough to be broadly understood as a mistake. Waiting 10 days and backtracking on previously issued statements though seems to be problematic, albeit not strictly with the way current law works.
At the very least, for travel that originates or ends in the United States, anyone who make non-refundable travel plans in reliance on American’s assurance about these fares would seem to have a DOT claim — even under the US government’s new approach of not requiring that fares themselves be honored.
For those who do travel on these tickets, remember that American says they don’t have to give miles on mistake fares although to date they have anyway.