The Most Impressive Handling Of An Airline Mistake Fare, Ever

Several days ago Hong Kong Airlines published some outrageously cheap business class fares originating in the US, as you could fly roundtrip to Asia for under $600 roundtrip.

I think it goes without saying that this was a mistake fare, and not surprisingly, tons of people took advantage of it. Back in the day the US Department of Transportation would require airlines to honor mistake fares, though that’s no longer the case.

So the reality is that the airline didn’t have to honor these fares. I’ll actually take it a step further — I don’t think that ethically airlines should have to honor mistake fares, at least in a case like this, where it’s extremely obvious. They should have to let passengers know very quickly if they won’t honor them, and they shouldn’t be able to cancel them in situations that are non-obvious, in my opinion.

Less than a day after the mistake fare “died” Hong Kong Airlines publicly confirmed that they’d be honoring these cheap fares, and that’s of course great.

However, what has really impressed me is the way they’ve communicated regarding these fares.

Here’s what the official Hong Kong Airlines Twitter account wrote after the mistake fare:

Then here’s what Hong Kong Airlines’ CMO Tweeted after the airline said they’d honor the fares:

Color me very impressed. Again, for me this isn’t about ethics, or about whether or not they honored the fare. For me this is just about plain good marketing.

Sometimes we see airlines honor mistake fares reluctantly, which seems counterproductive. If you’re going to honor a fare like this then at least take advantage of the good publicity associated with it. If you’re not going to generate goodwill from a potentially costly mistake, then it’s truly a lose-lose.

What impresses me so much here is the quick response and positive attitude from Hong Kong Airlines. They’re quickly owning up to the mistake, are saying “oops,” are reminding people they keep their promises as a brand, and are telling people to enjoy their product.

If you’re going to honor a mistake fare, that’s exactly the way to do it.

Very well done, Hong Kong Airlines!

For those that got in on the fare, be sure to check out our post on where to credit Hong Kong Airlines miles, and your options for redeeming them.

Comments

  1. Out of interest, where would be best to credit miles to as they don’t seem to be in any alliance?

  2. Except good intentions won’t pay off. Most of the bargain hunters will continue to be price conscious and will not fly business class at $2k/3k price point. What it does show however is that hk airlines is in it for long haul as they clearly think people will go back and brag how good business class was etc.

  3. This was fantastic but allow me to push back on ‘ever’. United used to put out great statements on mistake fares in the pre-DOT enforcement era. They called honoring their mistakes ‘the right thing to do’. They wished fabulous trips to those who got in on the fares.

    Perhaps my favorite response came from Independence Air which offered a statement to the Washington Post to the effect of, ‘you never know what kind of deal you’ll find at flyi.com!’

    Those days were so much more fun.

    Meanwhile the worst bungling of a mistake fare ever belonged to Alitalia and their Toronto – Cyprus deal in spring 2006 [$39+tax for business class].

    * Airline starts unilaterally cancelling tickets
    * Then they agreed to honor but were refusing to allow stopovers in Italy, so itineraries were being unilaterally changed – new travel dates without consulting with customers
    * That doesn’t work, so Alitalia tried to recreate original itineraries, but since Italy – Cyprus segments were codeshares on Cyprus Airways they didn’t always have available inventory to recreate itineraries with those segments. Customers wound up with missing segments, they could fly to Cyprus and couldnt get back (we called them ‘the swim team’).
    * So Alitalia set up a process where customers could make a one-time change of any kind, whatever they wished. As long as you began in Toronto and touched Cyprus, you could change travel dates, change routing, create stopovers (multiple!) in Italy.
    * But these were paper tickets. You dealt with one man in New York, he set up the new itinerary, Fedexed him your paper tickets along with a return Fedex envelope and he sent you new paper tickets. I personally spoke to him 25 times to reissue tickets for people in my office who took advantage of the fare.

  4. Why “very quickly” and not the specific 24 hours that passengers have to cancel tickets? What’s good for the goose…

  5. “I don’t think that ethically airlines should have to honor mistake fares, at least in a case like this, where it’s extremely obvious. They should have to let passengers know very quickly if they won’t honor them, and they shouldn’t be able to cancel them in situations that are non-obvious, in my opinion.”
    Where, exactly, do you draw the line between extremely obvious and non-obvious? Who is going to make that decision? To some, a fare listed at 25% of the normal fare is just a really good deal, to the next, it obviously a mistake.

  6. @vlcnc you can basically only credit it to their own mileage program (run by Hainan, the parent company of HK Airlines). Technically you can credit it to Virgin Australia as well but only for flights not departing or arriving in North America. And if I’m not wrong, you can redeem Hainan miles with a few partner airlines (Virgin Australia, Alaska, Etihad, TAP Portugal).

  7. I do indeed congratulate HK airlines to have done this in a professional way towards pax that got into this fare (I nearly did too, but decided not too since I need to position, etc).
    However I fear what is face value professionalism, heads will certainly go rolling back at HQ in HK as it is in essence a chinese company and someone internally needs to be “sacrifice” and that someone will not be some low level manager, but most probably someone mid-high management.

    Happy flying to all who jumped on this…

    Cheers!

  8. Marketing!!!!! This was probably done on purpose to get their name in the news. Much cheaper than running a marketing campaign.

  9. Glad to see this, and also glad to see the airline publicly rewarded for doing the right thing, as they will hopefully create an incentives for other airlines to do the same.

    But on:
    “I don’t think that ethically airlines should have to honor mistake fares, at least in a case like this, where it’s extremely obvious.“

    Swiss opening First class space was equally obvious a mistake, as it clearly violated their partner award policy, so why was that such a big deal? If anything, airlines should be more closely bound by paid fares than awards because they are legally advertising a purchase price in official currency, no?

  10. Meanwhile Marriott decides to screw over some of their mos rloyalncustomers by completely ripping off category 6 and 8 travelmpackage purchasers. Marriott Starwood merger should never have been approved. Too big to fail is too big to exist!

  11. It’s no secret that Hong Kong Airlines runs light loads on their US flights. They could easily honor these without impacting their bottom line and this will most likely help it out. It’s great marketing for them to sell otherwise guaranteed empty seats to people who probably wouldn’t have flown them for the same price economy.

  12. What’s obvious to one person is not obvious to another. That’s highly subjective.

    I also snicker at the irony of ethics ever being mentioned in a post on this blog.

    Remember, ethics flies coach.

  13. Most of the bargain hunters will continue to be price conscious and will not fly business class at $2k/3k price point.

    But those aren’t the only ones who know about it. If my boss said I need to go to HK next month, previously I’d just think Cathay. But now I have a very positive impression of Hong Kong Airlines.

  14. Cough Cough HNA cashflow.
    Agree with @Mark, I don’t think this will affect the bottom line that much due to light loads for US flights. There might be some issues with HKG-PVG,BKK segment as those are highly competitive.

    This is also some of the things I think many ‘western’ (yes, I mean United) companies forgot, customers come first.

    For $600, if you are making a trip anyways this a good deal. I didn’t jump in cause I have too many trips ahead and can’t make this out more than a mileage run of a less known currency. Let see how if I really missed out on this mileage run.

  15. Some people have it… Some people don’t. (LX F award, anybody?)
    Reminds mer of another goof by SR, LX’s equally arrogant demised predecessor.

    Nairobi – Geneva, in the late 80’s, paid Business Class, I had their “Travel Card”, some courtesy pre-mileage programs goody-goody card, unofficial status but nothing as “Senator ” or “HON” nowadays.

    Boarding: I show my (blue) Business BP. The agent, a 50-ish (old for me, at that time…) heavyset guy, takes it away and gives me a red (First Class) boarding pass.

    Me: “Oh… Thank you VERY MUCH…”
    He (grumpy, borderline nasty): “We are not doing it for you, you know… Just because we have to”.

    SOME PEOPLE WILL NEVER HAVE IT….

  16. I agree with santasico. My first thought was good marketing gimmick. If seats empty and no frequent fliers to award upgrades to then this may be good way to raise revenue with some good free advertising (omaat, points guy etc EVERYONE fawned over this). They may be quietly snickering about the double report from everyone about how they’re such nice guys. Have we been pulled into their web?

    Along the same lines, as a trader, I fail to see how this happens all the time. Write a script with some paramaters saying long haul cannot be listed without at least a price of $x unless you have two people confirming the price. Save yourself $100k? I can’t see how $bn airlines can constantly make this mistake.

  17. @Mick – This was an economy fare that booked into business class if you look at the farebasis code. It wouldn’t have triggered any controls in the pricing system for low business class fares. I’ve worked in airline RM departments and can tell you it’s a lot more complicated than just writing a script to look at one layer of a very complex fare component.

  18. @mark, interesting. Thanks for the color! I obviously am no expert but am always surprised to see this happening.

  19. @Mike I do think someone within HK airlines needs to be held accountable for the mistake fare.he/she made a sloppy mistake that caused the company to lose probably a couple hundred thousand dollars

  20. At least they got to sell those seats rather than have them go vacant or used for operational upgrades. $600 return is certainly very cheap, but it’s not outrageously cheap like if it was $60.00. That might have elicited a different response.

  21. Lucky I think you misstated the DOTs current policy:

    They don’t have to honor the mistake fare but they are obligated to provide credit for any reasonable non-refundable travel bookings made in anticipation of the flight.

  22. The DOT never said that airlines no longer have to honor mistake fares – the DOT said that it was exercising its discretion to not start proceedings against airlines that don’t honor mistake fares.

    The rule and DOT interpretation is still there – but passengers now have to enforce in court (small claims court could work.)

  23. Did anyone book a ticket for their infants through an OTA? HX live chat confirmed that infants are not allowed whether in lap or in their own seat, regardless of child restraint seat or not (contrary to what their website says). But they wont’ give me a straight answer on what my options are at this point or why this is even a policy. They just tell me to contact the OTA. I’m assuming Expedia will have to refund me the tickets since they sold me a ticket that’s not valid?

    My last bit of hope is that if HX launches their new business class product out of LAX, their policy on infants will change, but I’m not holding my breath.

  24. It is good publicity for Hong Kong Airlines new route , they say it was not intentional …………….. I wonder ?.

  25. why would they outright lie? obviously someone made a mistake, but they are making the best of it, turning a mistake into an opportunity (especially for a newer, smaller airline), and arguably might even benefit on the whole as a result. exactly as lucky says – best possible way to handle this.

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