I had previously discussed the issues with fare price protection for both consumers and brands. I outlined how fares have been priced so competitively that they rival genuine mistake fares and that the need for legislation protecting both is an immediate concern. Air New Zealand just made my case.
Air New Zealand Cancels Tickets
On the day of a post I released regarding the CFR 399.88 consumer protection rule from the DoT, Air New Zealand offered business class roundtrips from Sydney to Los Angeles for just under $1000 roundtrip. They have recently announced they will “not honor” those tickets. From the time of the first post I saw regarding the sub $1000 tickets it took nearly 48 hours for the brand to decide they would not honor the exceptional deals. Gary Leff pointed out in his post on the matter that the airline was advertising great deals to Australia around the same time.
While several other blogs (linked above) covered the original sale of the tickets and the cancellation, I found it precarious that there was never a statement listed from Air New Zealand from their press department on their own website. For those that will state that fares of this kind of course are mistakes and of course will not be honored I think they could have made a statement. One might think that the airline cancelling hundreds if not thousands of business class tickets would be at least as important to list as a new language availability of Moana on their aircraft which did make the press release list.
The Ticket Price Was Not An Obvious Error
While sub $1000 roundtrip tickets from Sydney to LAX are cheap, certainly, it’s not an obvious error. Let me explain that by giving some alternative market examples.
Qatar recently sold tickets in business class from Vietnam to the US for around $1500 on the same day they had a fare sale planned for “golden tickets”. They later claimed that these were an error but the tickets would be honored. I’m not so sure. I previously booked a non-promoted fare sale (it was not a mistake) for $1474 from Bangkok to Los Angeles via Doha in business class. These were more expensive prices and some of the routes much shorter distances (east coast destinations were more than 5,000 miles shorter than west coast). You can see why I recently wrote that we need more clarity on mistake fare rules when more expensive tickets are mistakes and cheaper tickets are correctly priced promotional fares.
These fares weren’t $450 fares in business class from Washington DC to Beijing. They weren’t $5 tickets from Hawaii, these tickets were within 40% of recent market rates. There has also been a great deal of additional competition into the market place over the last few years, it’s possible that Air New Zealand was simply ready to recapture some of that share.
When looking at amazing deals (but not mistakes) these “mistake” prices were actually well within range.
Air New Zealand mistake fare
- Sydney to Los Angeles via Auckland
- Route distance: 15,700 miles roundtrip
- Price by distance: 6.01¢/mile
Qatar valid sale:
- Bangkok to Los Angeles via Doha
- Route distance: 23,120 miles roundtrip
- Price by distance: 6.37¢/mile
British Airways Sale
- Los Angeles to Istanbul
- Route distance: 14,000 miles
- Price by distance: 8.57¢/mile
What about coach tickets using similar metrics?
- Los Angeles to Hong Kong
- Route distance: 14,460
- Price by distance: 2.95¢/mile
- Los Angeles to Barcelona
- Route distance: 12,300 miles
- Price by distance: 2.01¢/mile
- Los Angeles to Washington DC
- $120 (not Basic economy)
- Route distance: 4,560 miles
- Price by distance: 2.63¢/mile
My Case on Consumer and Carrier Protection
Let’s give Air New Zealand the benefit of the doubt that this was a genuine error – everyone makes mistakes, some are costly some are not. The one thing I commend Air New Zealand on in this process is that they declared within 48 hours of the ticket sales beginning that they would not honor the tickets. Air New Zealand didn’t wait around to calculate the extent of their exposure, whether or not it was a sale or mis-priced item. They simply cancelled.
As MeanMeosh commented on one of my posts regarding mistake fares,
“To me this seems like the most reasonable compromise. On the one hand, I strongly believe that since airlines have constructed their fare rules to severely punish consumers for the smallest of mistakes on their end, the airlines should also be forced to eat mistakes on theirs.”
He underlines my point. Consumers in the US have 24 hours to fix any errors and refund the ticket purchase in full as long as those tickets are booked more than seven days in advance. Carriers are not held to the same standard. I booked a cheap fare a couple of weeks ago that I trust will be honored but really don’t know. While 48 hours is fast for airlines, consumers don’t have the same flexibility – there is a hard and fast deadline and carriers won’t let customers off the 24-hour hook, why don’t those carriers do the same?
The case I’ve been making is that mistake fares and sale fares are nearly indiscernible and without clear rules in place consumers do not know if the price offered will be honored. Brands have a blank check to publish fares they never intend to honor and as good as legitimate deals have been – it’s impossible to know what is valid and what is not, and no timeline to determine such.
When I first saw the Air New Zealand fares, we gave the deal a pass because we didn’t want to position to Australia and the deal wasn’t that great. Somehow it seems both funny and frustrating that fares are so cheap that even sub $1,000 didn’t seem worth booking it immediately, and that I didn’t want to mess with whether or not they would be honored.
What do you think? Does the Air New Zealand mistake fare cancellation of legitimately priced tickets make my case stronger? Or am I just crazy?