Mistake Fare Versus Sale Fare: Can You Tell The Difference?

In the past year, I have taken three trips at exceptionally low fares. Can you guess which one was the mistake fare?

  • Phoenix to Quito return, with an overnight stopover in Mexico City, for $398, in February.
  • A lovely fall trip from Los Angeles to Copenhagen return for $545.
  • Los Angeles to Beijing one-way via Europe (an inconvenient routing, requiring multiple stopovers and the airlines I used can’t get you there otherwise) for $450.

If you’re scratching your head trying to figure it out, I don’t blame you. All of these were good fares, but they might have been either a good sale fare or a mistake fare. Only the last fare I listed, from Los Angeles to Beijing, is widely believed to have been a mistake fare. The airline didn’t include any fuel surcharges on the ticket. But it’d be an entirely normal price–or even a bit higher–for a direct flight between Los Angeles and Beijing. The low fare to Quito? An Aeromexico promotional fare to celebrate their newly launched service. And the Los Angeles to Copenhagen fare? A response by Air France to Norwegian Air Shuttle’s promotional fares, the latter having newly entered the market.

In Europe, Ryanair routinely sells flights for as little as one euro. There are $99 one-way flights from Baltimore Ryanair 33 euro flightto Iceland on sale as we speak. I recently flew on a $59 promotional fare from Los Angeles to Seattle, a route where flights often cost 3 times as much. So, if an airline sells tickets at a really low price, there is plenty of precedent: it’s usually a really good sale fare. This is particularly true on airlines such as Ryanair, who make most of their money on ancillary fees such as luggage charges and advanced seat selection. The fare is cheap because it only includes a seat. Nothing else. Seat assignments and luggage are extra. There is even a fee to buy the ticket!

Yesterday, United Airlines was selling business class seats between London and Newark for about $75 roundtrip. Was this a competitive response to the far superior Club World London City service offered by British Airways? A promotional stunt? Or a mistake? United claims it was a mistake and they aren’t honoring the tickets. They have consistently argued with the US Department of Transportation that they shouldn’t have to honor fares they didn’t mean to sell, even after taking your money and issuing you a ticket. Up until now, the Department of Transportation hasn’t agreed.

In pleadings before the Department of Transportation, airlines have argued that travel bloggers are Evil Incarnate, spreading news of mistake fares far and wide and costing them millions of dollars. When there is a mistake fare, they argue, airlines’ financial losses are greater these days because news of good deals just spreads faster. Well, this is definitely true. However, usually it’s not news of mistake fares. Instead, it’s free publicity for the airlines and I don’t think that they should get to pick and choose which kinds of deals bloggers can communicate, and which ones they have to honor. After all, I have personally helped to hand the airlines a megaphone when there are good sale fares they want advertised. For example, I drove tens of thousands of dollars in business to Alaska Airlines with this blog post.

There is also a fairness issue. After all, if you want to get out of something in the airline’s Contract of Carriage, the airline doesn’t offer you any flexibility. So, why should they get to weasel out of the contract when it would benefit them? Nobody has filed a complaint with the Department of Transportation yet about United’s refusal to honor yesterday’s mistake fares, but it’ll be interesting to see whether they allow United to get out of the contract. I hope the government doesn’t hand airlines a license to gin up all the free publicity they want while not actually having to deliver the goods.

HOT: Save At Least 20% On All Flights Right Now

As you have probably heard, the Russian ruble has effectively collapsed. This has created a tremendous arbitrage opportunity, but only if you take immediate action to leverage it.

ruble chart

The ruble effectively collapsed today

Airline tickets are quoted and priced in GDS systems, and currency conversions aren’t adjusted real-time. With the rapid collapse of the ruble, this means that you can effectively get a discount of 20% or more by paying in rubles versus dollars.

So, let’s look at a nice peak season flight from Los Angeles to Costa Rica on anywayanyday, a Russian travel agency:

lax-sjo price in usd

A typical peak season flight price to Costa Rica

As you can see, it’s $792 in US dollars. This is a typical non-sale fare price to Costa Rica during the peak season. Wouldn’t it be nice to turn this into a good peak season sale fare instead?

Currency selection menuIf you change your currency selection on this menu from USD to RUB, you can pay in the Ruble currency. Note that it’s a good idea to call your bank before you do this, because there is a slight possibility that they might consider it unusual that you are paying for things in rubles on a Russian travel site. By this, I meant that they will panic and block your card, which will cause you an endless amount of hassle. Why use a Russian travel site in the first place? It’ll be very hard for anyone involved to argue later that you shouldn’t be able to pay for things in Russia using rubles.

Now, let’s see what happens after you change the currency:

Yikes, that's a big number!

Yikes, that’s a big number!

The price becomes 41,638 rubles. So, let’s see how much that is worth in dollar terms:

ruble to usd conversion

Well, that’s interesting, isn’t it? It’s $196 cheaper to pay in rubles.

Folks, this sort of arbitrage opportunity almost never happens and it will not last. Take advantage while you can!

UPDATE: Many airlines are starting to correct this by repricing their tickets in the GDS systems. With British Airways, it is actually less expensive to book in dollars or euros now. Double-check the conversion before you book!

Is It Safe To Book A Mistake Fare?

Every time there is a widely publicized and unusually good mistake fare, I end up answering the same question: “Sure, you got a great deal, but will the airline honor it?” A follow-on question is often something like “When I get to the airport, will I be able to check in for my flight?” The answer is usually yes, but there are some cases where the answer is no. Here are 5 simple rules to help you avoid getting tripped up along the way.

trip hazard sign

Rule #1: An itinerary and a confirmation number is not a ticket. You booked your ticket. The online travel agency sent you an itinerary that indicates the price and the amount charged to your credit card. You even got a confirmation number (one of those codes that looks like CNF1NQ). And then you show up at the airport to check in, the agent types in her computer, frowns, and says the dreaded words:

Sir, your reservation is not ticketed on this itinerary. You will need to purchase a ticket to travel today.

So what happened? Occasionally there can be a glitch in booking where you make a reservation but a ticket is never actually issued. You need both a reservation and a ticket number to travel, and without both, you’re not going anywhere. Do you have any recourse? Only if you were charged for the flight. 99% of the time, when you go back to review your credit card statement, you were never actually charged and will be stuck either buying a very expensive last-minute ticket or abandoning your itinerary.

Rule #2: Don’t Call The Airline. While a deal is active is not the time to contact the airline. If they find out that you got a good deal, they will use every trick in the book to void your contract and cancel the tickets. Only after a ticket number is issued and confirmed, and enough time has passed to thwart shenanigans (72 hours to be safe), should you contact the airline.

Rule #3: $0 fares can be voided. If the airline mistakenly gave you a completely free ticket (charging only government imposed taxes), there is some legal precedent that they can get out of the contract by refunding everything you were charged. This is because the airline never actually took your money in exchange for providing a service (they only collected taxes on behalf of the government), so they never actually entered a contract with you. This theory hasn’t been tested lately because airlines decided that the revenue lost from a few seats mistakenly given away wasn’t worth going to court. However, do keep in mind that they could probably go to court and win. One attorney suggested that if there is any airline-imposed charge in the booking (such as a fuel surcharge or even 1 cent in fare), the airline would have a much more difficult legal case to make. Of course, I am not a lawyer and this is not legal advice.

Rule #4: Frequent flier tickets are a whole different ball game. An airline makes a mistake and offers a routing to Aruba via Amsterdam with a free stopover in Europe, but charges you only the mileage for a single-leg journey to the Caribbean. You can’t believe your luck, and the airline can’t either. A few days before you are due to travel, after having already prepaid for hotels in Amsterdam, you are contacted by the airline. They deliver an ultimatum: either cancel the whole journey (losing all of the money you have already prepaid) or alternatively, they’ll essentially wipe out your whole frequent flier account by re-pricing the trip as three one-way trips: one from North America to Europe, another from Europe to the Caribbean, and finally from the Caribbean to North America. “You’re lucky we can’t prove that you did this on purpose,” they say, “or we’d close your frequent flier account.” Your biggest question is whether they can really do this, and unfortunately, the answer is yes, they can. Airlines are allowed to do pretty much whatever they want when it comes to administering their frequent flier programs. They have very wide latitude, so tread carefully when a frequent flier redemption seems too good to be true.

Rule #5: Contracts Rule. By taking your money and issuing a ticket number, an airline has entered a contract with you. This isn’t true with frequent flier or other $0 fare tickets, but if the fare is 1 cent or more, the contract is in place. You can’t get out of a contract with an airline just because you wish you hadn’t entered it, and the same goes for the airline. So, don’t be afraid to assert your rights if an airline contacts you and tries to get out of the contract. Airlines know this, and also would generally prefer not to alert the general public to mistake fares. So, they usually just try to sweep mistake fares under the rug and allow anyone who has already purchased tickets to fly with no trouble.

Mistake fares can offer some incredible values in travel, and take you to some places that you might not consider visiting otherwise. I enjoyed an incredible visit to Ecuador on Aeromexico, which moved to the top of my list when roundtrip fares (widely believed to be mistake fares) dropped below $400. I was even able to upgrade one segment to first class for $40, I squeezed in a side trip to Mexico City, and I received Delta SkyMiles for the entire itinerary! As long as you follow the 5 simple rules above, you should have no problem flying on mistake fares you find!