Thursday, July 19, 2012

United's Four Mile Mania Lingers On

Update 2: Got my email from United a few hours after seeing that my itinerary had been cancelled. Dear United: You got the order wrong on that one.


Update: No official contact from United, but it looks like the cancellations are starting to roll in...

For anyone not in the know, the latest story making it's way around the frequent flyer community is a glitch that happened on the United website this past weekend, which allowed award tickets to be booked to Hong Kong from anywhere in the US for just 4 miles + taxes and fees, including tickets in first and business class. A round-trip business class ticket is supposed to be 120,000 miles, and a round-trip first-class ticket is supposed to be 140,000 - and those figures are subject to capacity controls (the no restrictions awards are 300,000 and 320,000, respectively!). Needless to say, as soon as word started to spread, people went nuts. I happen to need to be in Hong Kong in September, so decided to join the party:

My itinerary: round-trip from EWR to HKG in Business Class
Total price paid: 4 miles and $63.70
Countless other people got in before United figured out what was going on and shut things down. Since then, there's been a lot of pontificating about whether they were going to honor the tickets, or just cancel them en masse. Obviously, the thread on FlyerTalk has exploded - at the moment, the thread is over 1500 posts long, and has over 140,000 page views! It's also been dissected on all the major blogs - see here, here, here, here, here, here, and here (to name a few). In fact, word spread so much that the story eventually got picked up by major news outlets like ABC News, USA Today, NPR, The Wall Street Journal, and many more. Despite all the discussion, the matter has yet to be settled - and many believe that that is due to this being one the first major goofs that is really testing a new DOT policy (emphasis mine):

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.”
Personally, I actually kind of hope that it doesn't end up working out. A number of people have said that a strict enforcement of the policy by the DOT would be a good thing for consumers, because it would force airlines to invest in their IT in order to avoid these costly mishaps. I'm all for improving the IT systems, but at the end of the day, I would expect those costs to get passed along to consumers in the form of higher ticket prices. The policy impacts any route that has a US city in one of the legs, so it's not like foreign carriers would be immune, and the notion of paying higher fares to eliminate minimize the possibility of something like this happening again doesn't sound all that appealing to me.

What's your take?

2 comments:

  1. I can't imagine the airline honouring these purchases. I anticipate some sort of "out" based on the fact that this was clearly an error.

    What is the penalty if United refuses to honour the purchases? Would it cost them more to pay a penalty? What about the cost to the reputation of the airline if they refuse to allow customers to use the tickets they purchased?

    ReplyDelete
  2. I agree, but I've seen penalty figures cited as high as $25,000 PER TICKET

    ReplyDelete