In March of this year, American published a ~$450 roundtrip business class fare between Washington and Beijing.
American’s “old” 777-200 business class
That was a heck of a deal, and an amazing way to earn miles, given all the premium cabin bonuses American is offering this year.
American honored the fare for those who had ticketed their reservations, which they had to do given the DOT regulations at the time regarding post-purchase price increases.
The DOT has since changed their policy on that, though I’m not convinced airlines will act differently in the future. That’s because under the new rules airlines can cancel mistake fares, but have to reimburse consumers for “reasonable, actual, and verifiable out-of-pocket expenses that were made in reliance upon the ticket purchase.” That seems like it could get really messy for the airlines.
One thing American did as a result of the mistake fare is update the terms for mileage accrual, stating they don’t have to award miles on mistake fares (bolding mine):
Certain airline tickets are not eligible for earning mileage credit. These include, without limitation, the following: all tickets issued as AAdvantage awards or other free ticket promotions including free or reduced rate tickets; companion tickets; charter flight tickets; travel agency/industry reduced rate tickets; infant tickets; items occupying a purchased seat; unpublished fare tickets, including consolidator fares, tickets issued as a result of a fare published inadvertently or by mistake and tickets issued subject to special provisions.
Anyway, while most of us were thrilled with American honoring the fares, that sentiment wasn’t universal. There were also many people who were disappointed. Specifically those who held tickets with American, as non-ticketed reservations were subsequently cancelled. American allows a guaranteed 24 hour hold on tickets, which they have to offer in lieu of a 24 hour refund (since they don’t offer that).
Some people filed complaints with the DOT regarding American not honoring those tickets on hold. Anyway, it has been months since the mistake occurred, but a reader who was in that situation just forwarded the correspondence he received from American yesterday, on which they CCed the Department of Transportation. The email reads in part as follows:
Thank you for your patience in our responding to your complaint regarding the cancellation of a reservation for travel to China which you placed on hold earlier this year.
The reservation you placed on hold was for an extremely low fare offered by American in error, and the mistaken fare was offered for only a few hours. Because the fare was offered in error, we cancelled those reservations, such as yours, that had been made but not ticketed.
In our view, given the fact that the fares American offered for China travel in those few hours were so low that it was obvious they were offered in error (a fact widely acknowledged in the social media posts which prompted many of those who reserved the fares to do so), we were justified in cancelling those reservations that were made but not ticketed, and accordingly will not honor the fare associated with your cancelled reservation. However, we will offer to you two options for reduced rate travel to China, one for business class and one for coach class. The two options are as follows:
Option A – Business Class: We offer you a $1,500 discount on any roundtrip business cabin fare to Shanghai or Beijing.
- Reservation must be booked by AA and operated entirely by AA (including AA’s regional partners).
- Travel may not be upgraded, by upgrade certificate, AAdvantage status, or any other means, to a higher class of service.
- Travel will not be eligible to earn AAdvantage miles or Elite Qualifying Miles or points, and will not count as Elite Qualifying segments in the AAdvantage program.
- Travel may be ticketed immediately and must be completed within one year of the date of this letter.
- Travel to PEK or PVG should originate and end in the same U.S. airport(s) as in the original PNR with the same passenger(s) (or subset of passengers) traveling as were listed in the cancelled PNR.
- Must be ticketed within six weeks of the date of this letter.
Option B – Main Cabin: We offer you the opportunity to receive a $0 fare basis main cabin fare to Shanghai or Beijing, subject to taxes and fees of approximately $450 (varies slightly by routing)..
- Reservation must be booked by AA for any Q or O class fare to PEK or PVG, and operated entirely by AA (including AA’s regional partners).
- Travel may not be upgraded, by upgrade certificate, AAdvantage status, or any other means, to a higher class of service.
- Travel will not be eligible to earn AAdvantage miles or Elite Qualifying Miles or points, and will not count as Elite Qualifying segments in the AAdvantage program.
- This offer is subject to Q or O class inventory availability for travel outbound starting November 15, 2015.
- Travel must be completed within one year of the date of this letter.
- Travel to PEK or PVG should originate and end in the same U.S. airport(s) as in the original PNR with the same passenger(s) (or subset of passengers) traveling as were listed in the cancelled PNR.
- Must be ticketed within six weeks of the date of this letter.
If you would like to accept one of these offers, please contact American Airlines at the following number to make your flight reservation.
So in other words, American is willing to offer a $450 ticket in economy, or $1,500 off a business class ticket. In both cases they’re not eligible for mileage accrual and not upgradable.
American 777
Bottom line
This is an interesting offer on the part of American, especially as it’s more than six months after the mistake fare occurred.
American seems convinced they don’t have to honor the fare for those who had the tickets on hold. I’m not sure how they came to that conclusion. Airlines legally have to offer a 24 hour guaranteed hold or refund option, so they do have to offer the hold option, and they can’t change the fare during it.
I guess the question comes down to whether the contract of carriage gives them the discretion to not ticket mistake fares. The DOT covers post-purchase price increases, but a ticket isn’t purchased if it’s only on hold.
If they’re going to pretend to throw people a bone while trying to discourage them from taking advantage of the offer, I think what they’ve done is pretty smart:
- They know most people who booked the mistake fare are after the miles, so won’t fly economy without earning any miles
- While the business class discount is nice in theory, in practice I doubt many people will take them up on it, especially without earning miles or being able to upgrade to first class
American’s “old” 777 first class
But I did think this response was interesting enough to warrant a post, as it’s not often we see airlines make such offers in response to a DOT complaint more than six months after the fact.
What do you make of American’s offer to those who had the mistake fares on hold?
Membership is free and takes no more information than commenting as a guest. Earn status points for good contributions, and see fewer ads as your status grows.