DOT No Longer Requiring Airlines to Honor Mistake Fares; Is This the End?

In an interesting ruling by the Department of Transportation, it appears that they’ll no longer be requiring airlines to honor mistake fares, which could come as a major “blow” to those in this hobby.

The ruling, which was announced on May 8, clearly outlines what airlines have to do, and what they don’t have to do in regards to these mistaken fares:

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As a matter of prosecutorial discretion, the Enforcement Office will not enforce the requirement of section 399.88 with regard to mistaken fares occurring on or after the date of this notice so long as the airline or seller of air transportation: (1) demonstrates that the fare was a mistaken fare ; and (2) reimburses all consumers who purchased a mistaken fare ticket for any reasonable, actual, and verifiable out-of-pocket expenses that were made in reliance upon the ticket purchase, in addition to refunding the purchase price of the ticket. These expenses include, but are not limited to, non-refundable hotel reservations, destination tour packages or activities, cancellation fees for non-refundable connecting air travel and visa or other international travel fees. The airline may ask the consumer requesting out-of-pocket expenses to provide evidence (i.e. receipts or proof of cancellations) of actual costs incurred by the consumer. In essence, the airline or seller of air transportation is required to make the consumer “whole” by restoring the consumer to the position he or she was in prior to the purchase of the mistaken fare. The enforcement policy outlined in this notice is temporary and will remain in effect only until the Department issues a final rule that specifically addresses mistaken fares.

Here’s what I especially find interesting about this ruling. Take note about the second bullet point in there: […]reimburses all consumers who purchased a mistaken fare ticket for any reasonable, actual, and verifiable out-of-pocket expenses that were made in reliance upon the ticket purchase.

So, let’s take for example the roughly $450 mistake fare published several weeks ago by American, good for travel between Washington DC and Beijing, China, in confirmed Business Class. Had American not honored it, and I purchased the fare, would they be required to reimburse me for any non-refundable hotels and other travel plans I may have made? I’m doubting American or any other airline would come through in this regard, so I’d love to hear some further clarification on this line item. As a rule of thumb for myself, I hardly ever make non-refundable travel plans (outside of airline ticket purchases), so for me, this ruling really would be neither here nor there for me, but I can imagine for a good chunk of folks, it would apply, since non-refundable, advanced purchase rates are generally cheaper than the daily rates.

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Why I Think Airlines Will Continue to Honor These Airfares Despite The New Policy

It all comes down to PR. Yes, one can clearly understand that it doesn’t coset $450 to China in Business Class, but for the airline to cancel it, it risks their public image. Sure, I know a lot of folks are out to grab the fare, willingly knowing about the mistake, but for the airline to go against their published fare and cancel it, might be worse of a disaster. They need to find a fine line between these two, and it’s almost a lose lose situation either way.

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