Something is rotten in the Kingdom of Denmark : sub-$100 UAL 1st class transatlantic tickets are voided.
So all those who rushed out to book First class ticket on United from Europe to US for less than $100 are finding out that United have cancelled every single one of them.
We will void the bookings for those who purchased tickets as a result of a third-party currency conversion error. http://t.co/KBaXBJCwoQ
— United (@united) February 11, 2015
Not surprisingly the jilted ticket holders are upset and ranting away on the interweb.
The background to the story is that someone identified a glitch on the United site where a currency conversion error (Krona to USD) resulted in tickets being severely underpriced on the Danish UAL site. The tickets would only work if flying from Europe to US not the other way around.
Many people are outraged and taking their fury to the
streets twitter with howls of how they are never going to fly United again, how their plans are ruined etc. Others are claiming they will sue or how they are complaining to the DOT.
Let’s see how that will end up especially as the site required you to state your location as Denmark. If so, then the laws of the country of where the ticket was purchased may be the prevalent laws not US.
Either way – US or Denmark or EU law – normal contract laws allows cancellation in this case of a gross mistake such in this currency feed off by a magnitude or so.
However, the sticky point to normal contract law is a DoT law, 49 CFR 41712 § 399.88(a)
§ 399.88 Prohibition on post-purchase price increase.
(a) It is an unfair and deceptive practice within the meaning of 49 U.S.C. 41712 for any seller of scheduled air transportation within, to or from the United States, or of a tour (i.e., a combination of air transportation and ground or cruise accommodations), or tour component (e.g., a hotel stay) that includes scheduled air transportation within, to or from the United States, to increase the price of that air transportation, tour or tour component to a consumer, including but not limited to an increase in the price of the seat, an increase in the price for the carriage of passenger baggage, or an increase in an applicable fuel surcharge, after the air transportation has been purchased by the consumer, except in the case of an increase in a government-imposed tax or fee. A purchase is deemed to have occurred when the full amount agreed upon has been paid by the consumer.
This law was aimed at misleading or deceptive adverts but some argue it applies here. The question now will be if cancelling the ticket is the same as raising prices.
If you read this DOT pdf, you see this.
8. Does the prohibition on post-purchase price increases in section 399.88(a) apply in the situation where a carrier mistakenly offers an airfare due to a computer problem or human error and a consumer purchases the ticket at that fare before the carrier is able to fix the mistake?
Section 399.88(a) states that it is an unfair and deceptive practice for any seller of scheduled air transportation within, to, or from the United States, or of a tour or tour component that includes scheduled air transportation within, to, or from the United States, to increase the price of that air transportation to a consumer after the air transportation has been purchased by the consumer, except in the case of a government-imposed tax or fee and only if the passenger is advised of a possible increase before purchasing a ticket. A purchase occurs when the full amount agreed upon has been paid by the consumer. 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.” A contract of carriage provision that reserves the right to cancel such ticketed purchases or reserves the right to raise the fare cannot legalize the practice described above. The Enforcement Office would consider any contract of carriage provision that attempts to relieve a carrier of the prohibition against post-purchase price increase to be an unfair and deceptive practice in violation of 49 U.S.C. § 41712.
Last time something big like this happened was when airlines mis-priced first class tickets originating in Burma due to Kyat floating. Most airlines then were Asian where the eventual ruling seemed to be that an US bound flight had to do more than touch the US but stay there for greater than one day.
AS for the politics of it all, will the DoT force a major US company to commit a financial hit – that likely benefits non US voters – over a clear mistake that would be otherwise be allowed to be cancelled by normal commercial law? I would be surprised to see US Government championing a situation where even the source for this tip- a post on flyertalk.com – informed everyone that it was mistaken: Everyone who booked knew the price was erroneous as you would unlikely discover this by mistake.
While we understand protecting the consumers is important, forcing companies out of business over an honest mistake is just wrong.
What will be interesting now is even if the DoT pursues them, will UAL just accepts the fine as the cheapest option? Afterall, it will be paid to Govt not the consumer and then some negotiated fine.
So for the people who rushed in to buy the tickets, what will you say if United instead of giving refund, gives a credit to apply to a new flight with an appropriate change fee. Especially if the credit is in Danish Krona.
Check mate. If it is too good to be true, it probably is: Caveat Emptor: