
United Airlines: A first-class cock up - edward
http://www.economist.com/blogs/gulliver/2015/02/united-airlines-0
======
arcticbull
CFR Title 14 § 399.88 (a): Prohibition on Post-Purchase Ticket Price
Increases.

[http://airconsumer.dot.gov/rules/EAPP_2_FAQ_01-11-2012final....](http://airconsumer.dot.gov/rules/EAPP_2_FAQ_01-11-2012final.pdf)

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 [...] even when the fare is a “mistake.”

This is done specifically in case an airline decides to publish a $1
transpacific business class sale, too many people jump on, and then the
airline retroactively decides the price was too good and voids peoples tickets
out or comes knocking for more money.

It will be interesting to see which side the DOT takes this time around.

~~~
coldcode
If the bookings were on United's website (it doesn't say exactly) then they
should be liable regardless of how it got that way. If the bookings were on
another website then the DOT will likely agree with United. Having worked for
a large travel OTA, the rules for the taker of money are different than for a
third party who only collects the data but not the money.

~~~
arcticbull
I think you're conflating consolidator/unpublished fares with published fares.
These were all published fares. Even OTAs have the plating carrier collect the
money on published fares. Either way, point of sale doesn't matter for DOT to
apply, just that you're flying to or from the US.

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Someone1234
> “And even more so it is not fair to revoke the tickets that were already
> purchased.”

I'm always amused when people whine that a company didn't honour an OBVIOUS
pricing error. It is one thing if the price was 10% off, but in this case it
is like a 90% reduction if not more (depending on which first class fare class
the tickets were in, £52 instead of £1000-1500).

The only thing I will add as far as fairness goes, is that customers are often
held to a different standard. If a customer makes a mistake in their booking,
they have approx. 24 hours to fix it for "free." If a company makes a mistake
they often have near unlimited time to fix it (until check-in?).

But as far as cancelling mistakes in general? I have much more sympathy when
the company takes too long to do so, or the pricing error is more subtle than
in this case.

~~~
nimblegorilla
> an OBVIOUS pricing error

How does the average person know when something is an obvious error? Pilots
and other airline personnel often fly standby at ridiculously cheap rates.
Sometimes airlines fly planes almost completely empty:
[http://www.cnn.com/2015/01/13/travel/man-alone-delta-
flight-...](http://www.cnn.com/2015/01/13/travel/man-alone-delta-flight-feat/)

It seems plausible that United could offer extreme discounts for some unknown
reason.

~~~
reverend_gonzo
When you can buy something at a 90% discount that is at an unadvertised price
by buying it in a different currency than it was quoted, it should be
completely obvious that it is a pricing error.

As for pilots flying standby, it's a perk of being an employee in the
industry. Every single industry has perks for those within it.

~~~
nimblegorilla
Why is it obvious? Many goods and services are sold discounted for pennies on
the dollar.

I might have thought it was a pricing error or I might have thought it was
some sort of bizarre Danish Groupon-esque marketing ploy.

bookingbuddy.com is currently advertising 80% off sales. I don't see how 90%
becomes unreasonable compared to that.

~~~
reverend_gonzo
1) It wasn't for Danish customers. It was English customers who were trying to
paying using Danish currency.

2) Booking buddy is advertising the sale.

3) "Bizarre Groupon-esque marketing ploy" depends on marketing.

Companies don't intentionally, and without advertising, discount shit for 90%
off, but only when you find a backdoor method to get there.

You're either really grasping at straws to legitimize this, or you're
completely clueless about how the world works.

------
discardorama
Talking about switched prices: I read recently about Amazon and Squaretrade.
Apparently, Amazon pulls in the Squaretrade warranty price dynamically when it
renders the page for an item; and Squaretrade uses some sophisticated model to
determine the price. So if you add it to your cart when you're buying the
item, you are not guaranteed to get the same price you saw; the price of the
warranty in the cart can often be much higher.

~~~
Someone1234
That's pretty damn shady if true.

Also likely illegal in Europe at least. There have been cases of prices
magically increasing as items are moved to the cart/checkout, and companies
have been fined (see EasyJet for one example).

~~~
discardorama
Here are screenshots: [http://imgur.com/a/qGLAc](http://imgur.com/a/qGLAc)

Seems like a legit case of bait-n-switch to me. Granted, it's not a lot of
money, but still something to lookout for.

~~~
Someone1234
I was able to reproduce that. In fact I witnessed THREE prices, one of the
item page, another on an "add coverage" popup and a third in the basket.

That's really shady.

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maxmcd
Airlines make less than a dollar per traveler per flight correct? They expect
little year-over-year growth, and likely see little more than the baseline
return on their marketing spend.

If that's their worldview, I can't see how they would ever justify such a
large comparative loss for a little PR bump.

~~~
draugadrotten
> Airlines make less than a dollar per traveler per flight correct?

No, that is wrong. Very wrong.

United: $1.13 Billion Profit 2014

The so-called ancillary revenue alone — fees for everything from checking a
bag to more legroom — amounts to more than $22 per passenger.

~~~
mseebach
It's hardly _very_ wrong. United carried 139m passengers in 2013, that's just
over $8 per passenger.

If they do indeed make more than $22 per passenger on ancillary revenue, that
means they loose $14 per passenger if you look at the fare in isolation.

~~~
jklein11
Profit != Revenue

------
Gaussian
The article's conceit assumes there will be a measurable PR hit from this, a
dubious assumption at best.

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jkot
$80 for 5 hour flight seems like reasonable price. Ryanair has similar
distance for $40 (London Athens). 1 hour flights are often for $12.

Edit: NY to London is actually 2x distance between London and Athens

~~~
eridius
For a first class ticket?

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pbreit
So what was the total value of the "loss"? And could that not have been made
up in creating some goodwill around the incident or avoiding bad will?

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zeusk
ughh! Paywall article, apparently I've exceeded the 'article limit'...

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tomcorrigan
Surely an article like this belongs on reddit, not here?

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mikeash
I can't believe that people are so shameless that they will actually complain
when they attempt to rip off a company and their trick is discovered. I can
kind of sort of understand making the attempt in the first place, but surely
one should have enough human decency to let it go once you get caught.

Edit: the points history on this comment is interesting so far. Up, then quite
a bit down. I wonder what you're downvoting. Do you just dislike the
straightforward language of calling a spade a spade? Do you actually somehow
think that it's OK to rip off a company like this?

~~~
spiritplumber
When the cable or water company does it to me (overcharging on a bill), it
takes months to get solved, and they make you feel like you're trying to rip
them off, so, no - it has to go both ways or none.

(Cue me last year walking into a Comcast office with my lawyer in tow to
discuss them charging me a modem rental fee whereas I have my own modem - in
truth, we just were in the neighborhood)

~~~
mikeash
Two wrongs don't make a right, especially when they're unrelated companies.

