The Other Mile-High Club
How frequent flyers snag cut-rate first class flights, all because of a little computer glitch.
Earlier this month, a member of the online travel forum FlyerTalk reported United Airlines was offering an unexpectedly good deal on transatlantic travel: round-trip BusinessFirst class tickets from Newcastle, England, to Newark, New Jersey, for just 600 Danish kroner, or about $100.
The Copenhagen-based FlyerTalk member, who posts under the name CehofskiMD, had previously shared international flight deals on the site, but those were orders of magnitude pricier: a $1,095 business class route from Copenhagen to LaGuardia, and a $720 round trip ticket from Copenhagen to San Francisco.
Other members of the forum, where members discuss airline deals, mileage programs, and other topics of interest to frequent flyers, quickly discovered the airline was offering cut-rate deals on a number of flights out of the United Kingdom, though apparently only for customers paying in Danish currency. Since the airline automatically selects a currency based on passenger credit card billing addresses, that seemed to limit the scope of the deal, until non-Danish FlyerTalk members realized they could use their real addresses but falsely specify the country as Denmark.
"Leave the US address as the address on the credit card—123 Main St, Anytown, SomeState, 12345," one member wrote. "Or whatever your country's address is. But set the country to Denmark. And obviously the purchase country is Denmark. Should work perfectly."
News of the bargain tickets quickly spread across the travel blogosphere and social media, and thousands of customers bought tickets, according to United. But by the end of the day, the airline announced the deal was the result of a computer error and that it intended to give back its customers money, canceling the mistakenly discounted 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," the airline said in a statement.
The mistake was far from the first pricing error on the part of the airline industry—a blog post by travel search provider FlightFox lists a number of recent errors, some honored by airlines and some not. The mistakes ranged from typographical errors, where missing zeros meant unintended 90 percent discounts, to flights mistakenly booked for no charge beyond taxes and fees.
"It spreads like wildfire now, and the airlines just have to race to reprogram their computers"
But recently, industry experts say, news of these accidental discounts quickly goes viral, leaving airlines struggling to comply with truth-in-advertising rules and avoid antagonizing deal-happy consumers while still making money in a marketplace where customers will rush to take advantage of any apparent drop in prices.
"It spreads like wildfire now, and the airlines just have to race to reprogram their computers," said George Hobica, a travel writer and the founder of deal-tracking site Airfarewatchdog.
Hobica told me his site's deal-searching researchers generally won't broadcast obviously erroneous fares, though he acknowledges others do.
"We tend to draw the line on obvious mistakes that are gonna get somebody fired," he said. "I have qualms about this sort of thing."
Until recently, pricing errors would be discussed primarily on specialized forums like FlyerTalk, but those sites were only popular with hardcore frequent flyers, and their specialized jargon could be daunting for casual users, said Ariana Arghandewal, who publishes the travel deals blog PointChaser.
"Now, it's spread out onto social media," she said. "Pretty much any random person with a Twitter account who follows the right person gets it."
And when fares are sufficiently cheap, the frequent-flyer crowd often adopts a policy of book first, ask questions later, knowing fares might not last, she said.
"Really, the principle is book it, and then think about it later," she said. "I always just book and then figure out if I want to go or not."
When it comes to first class travel, some travelers will even book multiple flights simply to enjoy the luxury treatment they receive at the front of the plane, Arghandewal said.
"Some of these people—especially the FlyerTalk crowd—they just love flying, they just love being on a plane, and getting pampered in first class is like a vacation in itself," she said. "They'll fly six times to a destination if it means they get to fly first class and they only pay $50."
One recent apparent pricing error by Qatar Airlines, which lowered the price of first class travel to some cities in the Middle East to less than the cost of a coach ticket, even saw FlyerTalk members combing through government travel advisories and news reports to weigh the merits of an impromptu trip to Iraq.
"There were IS attacks this week on a town just 40km from Erbil," wrote one commenter, citing UK government warnings about travel to the capital of Iraq's largely autonomous Kurdish region, a possible destination for the deal. "No-one should be considering this unless you genuinely have a reason to be in the region and are fully aware of the risks."
That eagerness to snatch up deals has led to challenges for regulators like the US Department of Transportation. The DOT has previously held that under ticket pricing transparency rules, airlines normally can't simply cancel tickets they've already sold, even if they were offered for less than they should have been, though it has allowed airlines to offer compensation in lieu of actually honoring the mistaken tickets.
"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,'" according to a 2012 DOT frequently-asked-questions page.
But in the recent United case, while the DOT says thousands of consumers wrote complaining of United's decision to void the mispriced tickets, it declined to take any action against the airline. The DOT's Enforcement Office, in explaining the decision, said it ordinarily doesn't regulate fares not advertised in the United States and cited "evidence of bad faith by the large majority of purchasers" in falsely claiming Danish addresses.
That echoes concerns the DOT expressed last year, when it began seeking public comment on updating its ticketing transparency rules, including the provisions dealing with pricing mistakes.
"The Enforcement Office has become concerned that increasingly mistaken fares are getting posted on frequent-flyer community blogs and travel deal sites, and individuals are purchasing these tickets in bad faith"
"The Enforcement Office has become concerned that increasingly mistaken fares are getting posted on frequent-flyer community blogs and travel deal sites, and individuals are purchasing these tickets in bad faith and not on the mistaken belief that a good deal is now available," officials wrote. "We solicit comment on how best to address the problem of individual bad actors while still ensuring that airlines and other sellers of air transportation are required to honor mistaken fares that were reasonably relied upon by consumers."
Unsurprisingly, consumer and passenger advocate groups argued that airlines, with their notoriously arcane ticket pricing policies, should be held responsible for their mistakes.
"Travelers United and [the National Consumers League] have little sympathy for airlines, which, prior to DOT intervention would charge passengers $150 change fees for correcting errors made in destination or name spelling on airline tickets," the groups wrote, calling for the DOT to stick to the current rule.
Airlines, on the other hand, warned the existing law threatened them with financial peril—what Swiss International Air Lines called "the significant and sometimes extremely detrimental financial impact a mistake fare can have on individual airlines (up to and including possible bankruptcy)."
Swiss has said it fell victim to an exchange-rate issue of its own in 2012, when the Airline Tariff Publishing Co., an industry body responsible for disseminating fare information, mistakenly sent travel websites fares from Myanmar to Canada that Swiss had intended to revoke after Myanmar revalued its currency. After various blogs pointed out that first class trips normally costing in the tens of thousands of dollars were selling for mere hundreds, Swiss sold in a few hours more premium-class tickets from Yangon to Montreal than it sold any tickets at all from Yangon in roughly the previous year, the airline told Canadian regulators at the time.
Those officials ruled the airline was within its rights to cancel the tickets, saying customers "knew or ought to have known the fares were a mistake." Generally, the Canadian Transportation Agency said, airlines may cancel tickets within 72 hours of realizing they were sold at an erroneously low price, as long as they give at least 24 hours notice before customers are scheduled to fly.
Swiss has urged the US DOT, which has said it plans to update its regulations later this year, to adopt a similar policy, arguing that other travel industries, from cruise ships to government-backed Amtrak, are generally permitted to revoke mistakenly priced tickets, while airlines are held to a uniquely high standard.
But, as Airfarewatchdog's Hobica pointed out, the American public has developed a particular lack of sympathy for the airline industry.
"People absolutely have no qualms screwing airlines," he said, "because they just hate them."