Air Fare or Error Fare | Mistake Fare or Sweet Deal?

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Air Fare or Error Fare – Mistake Airfare?

A couple months ago, several consumers stumbled across an airfare too good to pass up between the United States and Palau on Korean Airlines for $450 to $600 USD.  From New York’s JFK airport to Koror’s Roman Tmetuchl International Airport on the island of Palau, the airfare was coming in at $560 round-trip. From Atlanta, it came in lower yet at $485.  Depending on departure city and travel dates, the fares went as low as $450.

As news of this deal spread, over 300 tickets were sold. However, there was a little problem: The too good to pass up tickets were AD75 fares, typically reserved for travel agents.  As a result of an error, the AD75 tickets priced out and were sold via public distribution sites like Travelocity and Expedia.  The nature of the AD75 error was pointed out and discussed in online forums like FlyerTalk.com, but this deal had wings and flew across the net quickly: scuba forums, other travel forums, Facebook, Google Plus, as well by email.  Anyone with a credit card and passport that meets the criteria for transiting Seoul-Incheon and entry requirement to Palau could purchase this fare.

Unless you’re a very frequent flyer, or a travel agent, and you see “Fare Class: SKL14A – AD75,” do you really know what it means?   Many travelers have no idea what their fare designator is or what “class” they’re booked into.  They just want to get from city A to city B at the best possible price.

This excellent deal was a published fare, bookable through several online travel agencies and airline ticket outlets designed especially for the public. Some may have known it was an error fare while others did not, but travelers kept booking with high hopes to visit Palau and to snag frequent flyer points from the jaunt across the Pacific.  The fare existed a few days and was then gone.

Typically when consumers buy such a fare, where a fare error exists, they’re either honored, or they’re not.  If they’re not honored, the airline and/or travel agency immediately notifies the consumer with a refund.

Instead two months passed and travelers were preparing for their trips, assuming all was good. Suddenly, they’re all contacted by Korean Airlines and are told their tickets are being cancelled.  There’s no doubt Korean had known about this error from the day the fare was pulled, but they waited two months to spring the bad news.

In the meantime, travelers had purchased non-refundable airfares to airports like New York’s JFK, Atlanta’s Jackson-Hartsfield Intl (ATL), Chicago O’Hare (ORD), Dallas Ft. Worth (DFW), and Los Angeles (LAX).

Korean will issue received refunds for the fares, a $200 Korean Airlines Voucher, and a promise to reimburse any of the non-refundable expenses incurred with planning their trip to Palau.   Korean even offered travelers to make the trip by applying the $200 voucher to the lowest fare, leaving the consumer to pay the difference, between $150-$250 in many cases, as they were offering to book the lowest fare via their sales office with one caveat: the fare across the Pacific would not earn frequent flyer miles, which upset others looking to make the trip for the mileage.

As to the travelers who booked this deal, many are seeing red; complaints filed with the US Department of Transport (DOT), letters to the BBB, and well, anyone who would listen. According to the US DOT, this is the first time so many tickets have been cancelled as the result of an error fare so close to the travel dates.

This begs the question, should air carriers be required to honor such error fares?

Afterall, when the consumer makes a change to their (restricted) ticket, they’re often hit with steep change fees but should any error benefit the airline, obtaining resolution can become a battle of David vs Goliath.

From a legal standpoint, it appears Korean has minimized damages by offering to refund prepaid expenses such as prepaid hotels or non-refundable airfares people purchased to reach New York, or another US Korean gateway. However, others do not see it this way and are looking at legal options.

According to Korean the case is closed on this error fare. Did they make the right decision?

Update: June 2012: The US Department of Transportation is now going by a new set of rules which require airlines to honor mistake fares in most cases. Recently there was a currency devaluation in Myanmar, also known as Burma. Numerous passengers booked premium class flights out of Rangoon’s Yangon International Airport (RGN).

With recent political changes, the nation of Myanmar, or Burma, is starting to open up and it’s becoming much easier for travelers to obtain entry Visa’s. In this latest fiasco, tickets purchased in the United States for travel out of Rangoon were mostly honored.

Now you might be asking, just why would someone travel to Rangoon for a cheap, premium airline ticket? A group of people known as “mileage runners” will to earn frequent flyer miles at a minimal cost which can then be redeemed for additional premium class travel. To top things off, elite status in airline programs is earned in the process providing perks from free lounge access, upgrades, and double mileage.

Have you come across an “error fare” or “mistake fare”? If so, how did it work out?

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7 Responses

11.20.11

If an airline publishes a fare, they need to honor it, error fare or not. It seems all of the airline contracts are one sided and provide little protection to us little guys.

If I want to cancel a ticket, I pay a fee. If the airline wants to cancel your ticket or change your ticket to meet their needs, they just do it. They should be paying their customers change fees!!

11.20.11

How does a regular person know that it’s an “error” fare? If it’s posted online and you can book it, then why wouldn’t they honor it? And if it’s a huge, glaring error, the airline ought to acknowledge and fix the problem within 24/48 hours. Canceling over 300 tickets two months later is absurd. I can’t believe that the DOT is going along with this.

11.20.11

Well last week I bought a ticket on AA… I found out I was a day off on my return leg (mistake)…. I don’t expect AA to eat MY mistake….
I think was KE is doing is outrageous.

11.20.11

Justin – get everyone to file with the DOT about Korean Air. Make sure you complete their complaint form so your complaint counts.

The DOT is a regulatory agency and each month (or quarter) they publish report indicating the number of complaints for each airline. This will show up as an anomoly of some type and it wouldn’t surprise me if news outlets pick this up when they do their “best/worst” airline stories. The DOT tracks these complaints, “i.e. XY lost my luggage” and they compile the stats per category.

I was looking to goto Palau and got screwed on this. I don’t even care about the miles, it’s all about visiting the South Pacific. This “fare upgrade” Korean is offering is a bait and switch.

I’ve already contacted my state’s Attorney General’s office (Consumer Protection Division) and the FTC. Others should do the same. A don’t think the state AG will do much unless they get many complaints, but they can have influence with the FTC.

11.20.11

What about taking KE to small claims where you live? I don’t see KE having a rep or attorney show up to defend in communities across the US. If they do show, argue your case. Worst outcome, you lose your filing fee.

Get them to deny reimbursement of a cost, like the one person who did dive lessons for the trip. Get creative. Also add on opportunity cost pointing out you (and wife ?) have already taken time off work. I know someone who sued an airline in small claims a few years ago, judge even gave him $500 for his troubles.

What KE did was outrageous. Shame on KE!

11.20.11

This, even if not intended, is a true bait and switch, and KE should be ashamed of their actions, waiting almost 2 months to cancel the tickets is wrong. I know this article states the difference is typically an extra $150-250; however, I can tell you my canceled ticket would cost me about an additional 1900 USD and that’s after the refund + 200 USD voucher is applied.

11.20.11

I heard this might be aired on one of the networks. To me it is bait and switch. KE can call it an error or whatever. I bought a ticket and two months later they renigged. Besides, how many travelers know what the codes mean next to the tickets?

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