The Airfare to China is $0. Do You Take It or Leave It?
On St. Patrick’s Day, American Airlines set round-trip business class fares from several U.S. cities to Beijing and Shanghai at $0 and $20 for five hours.
Nearly 1,200 people who weren't preoccupied with shamrocks and green beer jumped on the fares, about half of them buying immediately and half putting the reservation on a hold, per federal rules allowing people to cancel a ticket at no cost within 24 hours. The airline canceled the itineraries on hold, prompting some 100 complaints to the Department of Transportation.
Today, regulators announced that they had settled the case with American. The airline will offer the 605 holders of the past reservations a free economy-class flight to China or a business-class seat discounted by $1,500, with no AA miles. All travel must be completed by Oct. 26, 2016, a year from when American sent them its offer.
When it comes to “mistake” fares, the use of Twitter and Facebook can quickly lead to a surge of bookings exploiting a glitch ordinarily caused by a human or a technical failure. The 1,194 bookings to China on March 17 far surpassed the typical 100 or fewer bookings made in the prior five days during the evening hours, the airline said in its argument to the DOT.
Are social media helping people indulge their worst instincts as consumers?
“In American’s view,” the DOT wrote in the consent agreement, summarizing the airline’s argument, “social media posts acknowledging or recognizing that the fares were offered by mistake yet urging readers to rush to book them shows an intent to cheat, as many consumers knew the fares were not valid.” Further, the airline "believes that the proliferation of social media sites publicizing mistake fares has resulted in individuals purchasing mistaken fare tickets in bad faith, and not on the honest belief that a good deal was available.”
Fliers may have won this round, but it appears that the larger issue isn't settled yet. In May, the DOT sided with United Airlines, which had mistakenly sold some first-class seats for $50 three months earlier, signaling that airlines probably wouldn't be required to honor fares offered because of a glitch. A final rule on the issue is pending.
As for the ethics, what can we say? Look in your heart.
(Updated to clarify that the fares in the first paragraph were for round trips.)