A few days have passed since many (myself included) took advantage of the JetBlue deal in which you could save $150 off a domestic hotel + flight package. There were no restrictions, originally at least, meaning that if your flight/hotel combo was $150 or less, your trip was free. JetBlue later changed the terms and conditions to require a $2500 minimum for the discount, but not before many booked free trips. Can JetBlue now legally go back and cancel trips like mine?
I am now putting on my lawyer cap.
The answer is yes, it can. But not without ramifications.
After the Danish Kroner debacle with United, the U.S. Department of Transportation suspended enforcement of its airtight rule protecting consumers who purchased mistake fares. Instead, the DOT issued the following–
As a matter of prosecutorial discretion, the Enforcement Office will not enforce the requirement of section 399.88 with regard to mistaken fares occurring on or after the date of this notice so long as the airline or seller of air transportation: (1) demonstrates that the fare was a mistaken fare ; and (2) reimburses all 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 addition to refunding the purchase price of the ticket.
These expenses include, but are not limited to, non-refundable hotel reservations, destination tour packages or activities, cancellation fees for non-refundable connecting air travel and visa or other international travel fees. The airline may ask the consumer requesting out-of-pocket expenses to provide evidence (i.e. receipts or proof of cancellations) of actual costs incurred by the consumer. In essence, the airline or seller of air transportation is required to make the consumer “whole” by restoring the consumer to the position he or she was in prior to the purchase of the mistaken fare. The enforcement policy outlined in this notice is temporary and will remain in effect only until the Department issues a final rule that specifically addresses mistaken fares.
Translation = airlines don’t have to honor mistakes, but do have to compensate consumers if they make non-refundable bookings around those mistakes, like hotels or tour packages.
I recommend you read my entire article if you are interested in this issue.
Then and Now
That was in May 2015 and we still don’t have a final rule. With a new Republican administration coming to Washington, it is unlikely that airlines will see new adverse regulations. Then again, “predictable” is one adjective few would use to describe the President-Elect.
But as things stand now, JetBlue could invoke this policy to cancel all the fares. It could plausibly argue that its discount constituted a “mistaken fare” because under no circumstance would it deliberately offer free vacations.
Alternatively, JetBlue could argue that vacation packages never fell under §399.88 and thus its cancellations are outside the purview of DOT restrictions. This would be a harder argument because there were flights sold and they would be cancelled due to “mistake”. But if JetBlue made this argument and the DOT chose not to step in, it would be up to consumers to litigate in court on contract law grounds. Doable, but hardly worth the effort over $150.
Why JetBlue Would be Foolish to Cancel Vacations
Even though it seems likely that JetBlue did not intend to offer free vacations (because it quickly changed the terms and conditions of the offer), JetBlue’s losses are limited and it would be foolish to start cancelling itineraries.
I booked a couple Vegas vacations that were free. The flight was $90 r/t and the hotel was $60/night. For those who took advantage of the deal between New York and Boston, the flight/hotel breakdown was similar. So JetBlue gives away from free seats on flights that would have left with empty seats anyway. Big deal. The damage is limited and for JetBlue fight every $50-60 loss would probably cost more than $50-60 in manpower to cancel.
JetBlue should proofread its terms and conditions more carefully before it publishes a deal next time. Further, JetBlue should realize that this deal wasn’t so obscenely good that it was crystal clear it was a mistake. How many people are really going drive to the airport for a one night “vacation”? Just the crazy people like me.
JetBlue has not exactly earned goodwill through this promo, but will earn goodwill by honoring it and will certainly squander goodwill if it seeks to cancel these.
The era of airlines mandatorily honoring mistake fares is over. Then again, I predict airlines will often see the mess from canceling “mistakes” will be even more costly than absorbing the hit.
My bags are packed and I am ready for my Vegas trip. Let’s hope JetBlue is too.