American Airlines Reverses Course, Agrees to Honor $0 Mistake Fares to China

Under an agreement with the DOT, American Airlines says it will make good on computer–glitch-generated fares to China that the airline had previously canceled.

Business class tickets from the U.S. to China that appeared on the American Airlines webpage for fares of $0 to $20 looked too good to be true, and if those fares appeared on the American Airlines webpage today it would indeed be too good to be true. In May of this year the Department of Transportation (DOT) changed rules that required airlines to honor published fares even if those fares were the result of a pricing error. Since the mistake fares in question were booked during a five hour period on March 17, more than a month before the rule change, American Airlines may have violated DOT when it quickly cancelled the reservations of more than 800 customers who booked, but had not completed payment for the free and nearly free trips from U.S. cities to Shanghai and Beijing.

Quartz is reporting that the legacy carrier has reached an agreement with the DOT to honor the mistake fares that may have been improperly voided. Under the terms of the agreement, American admits no wrongdoing but will offer passengers who had their reservations cancelled the option of either a free economy class ticket to China or a $1,500 discount on business class seats. Passengers will still be responsible for additional taxes and airport fees and will not accrue frequent flyer miles for the flight.

Sources say the airline is hoping that at least some of the passengers in this group were planning to use the rock-bottom rate as a mileage run in the hope of earning elite status without spending big bucks and will decline the airlines offer. Still, it is estimated that American will now be on the hook for upwards of $1 million in free travel. That figure does not include the approximately 800 passengers who had already completed ticket purchases before the airline was aware of the computer glitch. Those fares were not cancelled and passengers were able to use tickets without penalty and accumulate frequent flyer miles for the trip.

[Photo: American Airlines]