Must airlines honor mistake fares?

The $227 round-trip airfare from New York to Abu Dhabi on Etihad Airways looked too good to be true for Jeremy Clement. But it wasn't. He could book the ticket through Orbitz, which is exactly what he did recently. He also told several friends about it, and they, too, bought tickets to the United Arab Emirates.

But the offer turned out to be what's known as a "fat finger" fare — a data entry mistake or a decimal point error made by an airline or travel agent, and usually quickly rescinded.

"Within an hour or two they figured it out and locked the bookings," he says.

Clement, who works for a start-up technology company in New York, lucked out. Etihad, the airline with the mistake price, decided to honor the ticket, even though the normal fare to Abu Dhabi is closer to $1,500. At the time, federal regulations left the airline with little choice.

But airlines caught in a fat-finger mistake may no longer have to honor these errors. The Department of Transportation (DOT), which regulates air travel in the United States, is considering a new rule that could let airlines off the hook for fares booked the way Clement, and many others, did. It also recently stopped enforcing a regulation that prohibits an increase in the price of an airline ticket after purchase, in cases of mistake fares, until the new rule is decided.

You don't have to be an airline insider to know which way the DOT is leaning. But the agency's shift on mistake fares raises important questions about ethics in travel, and how they have changed in just a short time.

The government has signaled for some time that they believe the rule, which is intended to prevent post-purchase price increases, is being used for less than honorable purposes. In February, it investigated a $142 round-trip fare from New York to Copenhagen on United.com. United didn't want to honor the fares, but thousands of customers petitioned the government to force United to do so. Passengers claimed the rules were on their side.

The DOT begged to differ. In its decision, the government noted that the erroneous prices appeared on a website that was not marketed to consumers in the United States. "In order to purchase a ticket, individuals had to go to United's Denmark website which had fares listed in Danish Krone throughout the purchasing process," it concluded, adding that there was "evidence of bad faith by the large majority of purchasers."

Fast-forward to late spring, when the government announced it would no longer enforce the post-purchase rule with respect to mistake fares. In a document called a Notice of Proposed Rulemaking, which is the first step toward creating a new regulation, the DOT explained that its enforcement office had several incidents where passengers complained that airlines or ticket agents would not honor tickets that had been paid for in full.

The government, it added, "has become concerned that increasingly mistaken fares are getting posted on frequent-flier community blogs and travel-deal sites, and individuals are purchasing these tickets in bad faith and not on the mistaken belief that a good deal is now available."

Put differently, the Transportation Department doesn't want to be an accessory to what some might consider organized theft. If a fare error is discovered and shared online, where people book a ticket knowing it's an error the airline must honor, the government doesn't want to be involved.

So, are customers who book mistake fares stealing? When I began investigating mistake fares a decade ago, there was a strong consensus among most passengers. It was wrong, no question about it. Only a small, vocal group of loyalty-program bloggers disagreed, but their views were far outside the mainstream.

Not anymore. A short decade of cuts and consolidations have made even the occasional traveler aware of the draconian airline policies, including onerous change fees, ticket restrictions and other "ancillary" charges meant to line the pockets of airline shareholders. Airlines have developed technology to extract every last penny from passengers. And, predictably, the tide of public opinion turned.

"Why can't consumers take advantage of whatever opportunities they can to save money?" wonders Talaya Waller, a branding consultant and frequent traveler based in Washington, D.C. "Companies can charge however much they want to make a profit. If their expense was $2 and they knew they could get away with charging $20, most would."

There's also a double standard, notes Kyle Stewart, who edits the frequent-flier website Upgrd.com. "If I make a mistake in booking a fare, whether it is an incorrect date, time, or even destination, I am stuck with massive change fees and no opportunity to refund the ticket and correct my mistake," he says.

In addition to sites like Upgrd.com, which often tell readers about fare errors, there's a cottage business of star-up sites dedicated to finding and disseminating fat-finger fares. For example, Travel Noire claims it was one of the first sites to discover and share the United Denmark fare. Amazing Airfare, an email and text message alert service that lets people know when there's a "crazy deal" on airfare, also sends out mistake fares, although it's not exclusively focused on them.

"As far as the ethics goes, you have to understand that airline pricing is incredibly complicated," says Amazing Airfare founder Zac Cohn. "Most people in the airline industry don't even understand how it works. If they don't understand it, how could a consumer be expected to?"

This isn't easily resolved. My moral compass points me away from booking anything that even looks like a mistake fare. But I can understand how someone would justify not only finding an obvious fare error, but encouraging friends to book it. In some small way, it feels like leveling the playing field.

Whatever the DOT decides to do, it will likely treat the symptom without curing the problem, which is the growing resentment America's air travelers feel toward the airline industry. The only solution to that — better customer service and fairer policies — may be beyond the grasp of the federal government.

A cheat sheet for fare errors

• Tell the government what you think. You can leave a comment at regulations.gov. (The ID is DOT-OST-2014-0056-0001.) While the comment period for this rulemaking has closed, the department will consider late comments filed to the extent practicable. The earlier, the better.

• Err on the side of caution. If you even suspect a fare is too good to be true, ask the airline before booking it. Fares found through websites or blogs that specialize in fare errors should be particularly suspect.

• Don't let the airline off the hook. Even though the DOT won't enforce its old rule fare mistakes, it still requires that airlines reimburse consumers who purchased a mistaken fare ticket for "any reasonable, actual, and verifiable out-of-pocket expenses that were made in reliance upon the ticket purchase." In other words, your airline might be on the hook for non-refundable hotel reservations, destination tour packages or activities that you do not use, says the government.

Christopher Elliott is a consumer advocate and editor at large for National Geographic Traveler. Contact him at chris@elliott.org or visit elliott.org.