American Airlines filed $0 fares in 31 different domestic market on Tuesday. They spotted it quickly and did not ticket the fares. This is an internal memo from Americans about how the fares were handled.
American appears to mislead customers about their legal obligations
Americans wrote to their agents to complain about the mistake fares. This seems to indicate that they only have a legal obligation to refund customers if there is a mistake fare. This is false. The Department of Transportation requires that airlines honor misplaced fares, but only if certain conditions are met. These conditions include reserving tickets or making the customer whole by paying any other expenses he may have incurred due to the sale.
The Obama Administration's Department of Transportation stated in 2015 that it would no longer enforce the rule that airlines must honor all fares sold. Instead, they would create a new rule. A new rule was never issued. They have just ignored section 399.88 at their discretion. However, the airline must reimburse all customers who bought a wrong fare ticket for reasonable, real, and verifiable expenses. These expenses include hotel reservations, activities and destination tours, as well as cancellation fees for connecting flights.
DOT states that the airline must make the consumer right by restoring him or her to the same position he/she was before the purchase of the wrong fare.
American is Reasonable in Not Honoring These Fares
My view on mistake fares is that I am happy to book them. Airlines will either honor the deals or not, but if they are going to fly people to Paris for $28, then I would like to be among those people. It is reasonable to me that an airline would not honor a mistake fare if they did not act quickly. This is at least true for fares that are so clearly incorrect ($0 airfare plus taxes).
Sometimes it's not as simple as that. American Airlines offered a $479 roundtrip business-class fare to Brazil for the same price as Delta's. Although they didn't make a mistake, it was a good thing that they did. The DOT would probably have accepted if they had claimed that it was an error.
The DOT has promised a new rule for 6 years without any action. Here's an easy way to do it. To avoid making a mistake, here's how to fix it.
A company should be able to prove that they have made a mistake. Submitting a submission to the DOT certifying that the fare was in error under penalty of perjury
Submitting a certification to the DOT under penalty of perjury certifying that the fare was in fact an error. The error must be obvious, and it must be egregious. It seems reasonable to accept an error if an airfare offers a discount of 80% or 90% on the lowest price (inclusive all fees surcharges) for the route within the last 30 days.
If the airfare was not offered in error, it is reasonable to assume that it was an error. It is important that the submission be received in a timely fashion. According to DOT rules, customers have the right to place airfare on hold for 24hrs or cancel within 24 hours. Airlines should be able cancel an error within 24 hours.
Current DOT rules allow customers to place airfare on hold for up to 24 hours or cancel within 24 hours. Airlines should be able cancel an error within 24 hours. Customers should be able to communicate with them clearly. Within 24 hours of purchase, contact individual customers to inform them that they have submitted to the Department of Transportation (DOT) that the tickets were invalid and will not be honored.
In other words, airlines should be subject to the same rules as consumers. American Airlines appears to meet the requirements here. I think it is fair for them cancel these fares. The fares may not always be correct and airlines are not always as prompt as they should.
