American Agrees to Honor Big Mistake Fare… Then Cancels Bookings Anyway

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.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. agree completely, DOT should match its consumer protection as an airline protection – both sides get 24 hours to cancel, after that they must honor.

    Country of origin / country of residence / exchange rate mistakes make me feel less sympathetic to customers as most Americans going through this sort of scenario must know it is a mistake.

  2. Actually, AA should care and does care about billing address. Credit card charges that are approved with wrong billing adresses, while approved, incur a higher charge to the vendor because there is more risk that the transaction is fraudulent.

  3. Those affected lied about their country of residence in order to get the mistake fare.

    Why should AA be required to honor a ticket that was falsely purchased?

    Sorry, there is no sympathy from me.

  4. @David they provided partial incorrect data as part of their billing address but it didn’t preclude American from issuing the tickets and processing payment.

    @Charles what makes you think that’s a part of American’s merchant agreement? American does not have a boilerplate agreement.

  5. American took a week to ticket these reservations. Before the reservations were ticketed, American publicly told customers that ALL tickets would be honored. Then, true to their work, American ticketed.

    Then a week+ later, they started canceling.

    At what point could a customer know that reservations will be honored?

    Not everyone has incurred nonrefundable expenses, but I’ve got friends/family who have made changes to their plans to accommodate my travel…which now may be canceled.

  6. What about those of us with reservations from Prague to Mexico, issued by American? They confirmed they would honor the fare and helped me with seat selection – and of course the took my money. Now one is canceled and segments are missing on the others.

    They have not send cancellation emails, refunds, or acknowledged anything except to say “they are looking into it.” In this case, I booked tickets right from my account, with my long-time US address and US credit card. They billed me in dollars, there was nothing fishy. What can we expect with these?

    I am a long-time EXP and pretty upset with how this situation is being handled.

  7. @charels
    Even if AA paid more for mismatched address they would of know at the time of the transaction by the response from the bank and could decide if they will approve a charge or not

    Delta for instance would not approve a charge with a wrong billing address

  8. American is now cancelling similar fares originating in Prague for travel to Mexico. Thing is – there was no requirement that it be in local currency. I purchased mine on Orbitz, fully disclosing my U.S. address. Now, four days later, with no warning or explanation, they cancelled it. Worse, I actually purchased two trips to different destinations in Mexico. One was cancelled outright. The other, only partially cancelled – I still have tickets there, but on the way back, they simply dropped the Miami to Heathrow leg. I guess I’m supposed to swim that part now? Best of all – they still haven’t made any attempt to refund the money. The charges on my CC account are still there, accumulating interest….

  9. @David American Airlines was never required to honor the fare. They were completely within their rights to come out from the beginning and cancel the tickets of those who put in false information. However, they chose to publicly advertise — on social media and through press releases — that their official stance was to honor the mistake fares. And they did just that.

    Where it seems people have a valid argument is that when they were issued their tickets and saw these press releases about American Airlines honoring all the mistake fares, they figured it was a done deal (and why shouldn’t they?). Many of these people made other plans as a result of knowing the issue was settled, and then had their original tickets cancelled because American flat out changed their minds. The worst I saw on Flyertalk are from those who were issued mistake fare tickets, started their travels, and had the rest of the segment cancelled due to this flip-flop – yikes!

    I don’t know what recourse will come from this — I imagine the worst will be a LOT of bad PR for American Airlines, but those that are stuck with the costs they incurred as a result of being told they were good to go, is very poor form by an airline who took advantage of some early publicity to make themselves out to be the good guys.

    That’s my two cents anyway.

  10. My take away from all of this — We now know that both United and American will cancel mistake fares if the person booking had to fraudulently indicate where they lived in order to obtain the mistaken fare. I would assume that Delta will do the same. The airlines apparently consider there to be a difference between an honest mistake and an act of fraud. I kind of have to agree with the airline on this one.

  11. I live in Brazil and had a chance to take advantage from this mistake fare. I would say that according to Brazilian regulations (ANAC, the Brazilian agency and/or CDC – the consumer protection code) are quite stricted related to mistake fares that are considered part of the business and risk of the companies. In this sense, they would be forced by law to honor the tickets as well as the miles (a lot of claims can came from remote courts, and judges will mostly likely judge in favor to the consumer, including miles).
    I am pretty sure AA has had legal advice to honor the tickets, as winning in the legal side is unlikely, as well as the cost to be represented all over the country (Brazilian law ensure consumer the right to claim in the court close to their residence and Brazil is as big as US sizewise). So, it would be cost over cost, over cost, over cost.
    However, for consumers outside Brazil, they would have to came to Brazil to file a claim, as well as prove that the transaction had occurred under Brazilian jurisdiction, so AA would have a strong case and is unlikely people would come to Brazil to file a claim (and if that is the case, AA would probably settle an agreement).

  12. I’m curious if there were any cases of someone from Brazil that happened to be in the US and bought tickets. Or someone from the US, but was in Brazil. I’m sure there are few (if any), but how they treat those cases would be interesting to me.

  13. All I know is that it seems American Will do anything they can to screw their customers. Hands down the worst major airline.

  14. American is a total mess since this ill-fated merger started. I’ve been an American frequent flier since 1988 and I’ve never seen them this bad. I had an incident last month, complained to Customer Service, and got a response that basically said they didn’t care.

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