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UA mistake award redemption rates for China travel [UA says will void tickets]

UA mistake award redemption rates for China travel [UA says will void tickets]

Old Jul 16, 12, 2:46 pm
  #541  
 
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Originally Posted by iahphx View Post
I guessed 2000 tickets yesterday, but that might be conservative since most folks undoubtedly booked multiple pax/itineraries.

I still think each ticket is "worth" about $5000 to UA in lost revenue (that might be a tad high, though -- without discounts, I think you can buy an EWR-HKG BF ticket for about $6800). So my ballpark bet was that this would be a $10 million mistake if honored.

And that, my friends, is the problem here. $10 million would actually be "material" to UAL's earnings (although less so if the cost were spread out over the next 12 months).
I disagree with this analysis. It makes the fundamental assumption that UA would have sold for revenue all these seats. That is highly unlikely. I would guesstimate that in 80% of tickets all they would end up paying for is the cost of food and extra fuel burden. If you look up availability on their flights to HKG over the coming there are very few where J or F are sold out and in most cases it's J9.

Where it really does become expensive for them is where they were booked on partner airlines. In those cases UA is going to have to cough up real money. We already know of one person who flew yesterday by FRA on LH so there will be some real $$$s there.

But the idea that they are going to be out 2000 x $5k is not right
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Old Jul 16, 12, 2:46 pm
  #542  
 
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Originally Posted by jfhscott View Post
Not necessarily so, depending on the regulatory framework, state law can supplement federal remedies, in other cases, federal law completely preempts.

OK, semantics, the point is that with regard to this particular situation state law can't result in LESS protection for the consumer than federal provides, but may give more. As such, all this stuff about mistake defenses based in contract is literally useless if the DOT decides that mistake fare rule applies to these tickets.

If mistake fare rule does not apply to these tickets, IMO the chances of them holding up are somewhere between slim and none and slim may not have left town, but he's packing.
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Old Jul 16, 12, 2:50 pm
  #543  
 
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Originally Posted by ma91pmh View Post

Where it really does become expensive for them is where they were booked on partner airlines. In those cases UA is going to have to cough up real money. We already know of one person who flew yesterday by FRA on LH so there will be some real $$$s there.
I'll do my part to alleviate the cash outlay for UA: they can cancel my Air China leg from Beijing to Hong Kong. They can just get me to Beijing on UA metal.
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Old Jul 16, 12, 2:50 pm
  #544  
 
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my biggest hope actually is that both united and continental have stated in one of the country's top 3 newspapers that they will honor any mistake fare, no matter what. if they break that promise how credible is the new united, especially given all the other customer trouble they are having right now?

(i know, others have mentioned it before. but i think you cannot mention it often enough).
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Old Jul 16, 12, 2:51 pm
  #545  
 
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Originally Posted by HumbleBee View Post
Any idea what kind of scale we're talking about? 10,000 tickets?
And the glitch allowed the booking to and from HKG, and I assumed many were done from overseas as well (initially discovered from China to HK?).

Even though I doubt it, if UA decides to honor the tickets because of the DoT regulation in the US, what would they do with people from overseas?

The sense of fun and excitement has turned into anger and entitlement... why so many think they are always entitled to get the way they want no matter what... life is not fair to begin with...corporations, same as governments, are also made up by people, and people still make mistakes. And yes, they should pay in part for their mistakes, just as we do if we screw up. For me, I take this one as a lottery. If we get it, great. If we don't, maybe we will get some future credit voucher instead. If not happy, just don't fly with them, and take your business somewhere else.

And we wonder why airlines in the US and around the world are struggling and filing for bankrupcy (besides the obvious oil prices)
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Old Jul 16, 12, 2:52 pm
  #546  
 
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Originally Posted by Frugal Travel Guy View Post
United has a stated policy from an old Wall Street Journal piece they they honor mistakes no matter how big. Smisek and the gang have endured grief about long wait times for reservations, the promo screw up last week and countless others.

They may use this as a positive PR piece saying,

"Yes we are real. Yes we make mistakes, but our customers are important to us and we care about our customers. We will honor this deal."

They may turn this negative into a positive PR situation. On my outbound our two seats were the only two booked in First. On my return there are four of twelve booked. Do you actually think they were going to get $20k per ticket and full first class cabins?

And if we did book up a full first class cabin on some flights, they could be honest and tell us about the lost revenue and offer some in the full first cabin a biz class seat in exchange. Compromise on both parts.

Instead of bashing them constantly here, why not encourage them to admit their mistake and " Do the next right thing" I know I'd appreciate them more if they did

Exactly! Remember, "Planes Change. Values Don't." United has got to honor yesterday's China award flights. Otherwise, they would be demonstrating that their values since the merger have changed. Great quote in the 2007 article from the United representative.
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Old Jul 16, 12, 2:59 pm
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This is how I'd calculate the cost to United:

Average Revenue Tickets x Full Revenue Price. The real $$ loss would be the number of revenue seats that would have been filled that now have us free loaders in them. Then add whatever cost there would be to pay partner airlines for their seats.

Beyond that, you could argue that a small percentage of people getting these 4 mile flights would have paid full price in miles to fly the same itinerary as they'd already been planning it. These people would not only get their virtually free 1st class flight, or whatever class was booked, but would still have 150,000 miles more in their accounts to pay for other award tickets. This category would seem to have a negligible real cost, I would think, relative to the first category.

Last edited by HCSmooth66; Jul 16, 12 at 3:04 pm
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Old Jul 16, 12, 3:02 pm
  #548  
 
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Does anyone know how United would go about rectifying this, assuming they don't honor the "deal"? Would they run a sweep and just cancel all award tickets to HKG en masse? Or can they tailor a sweep towards just those who paid 8 miles? It seems to me if they were forced to individually call each of us, it may not be worth the man hours it'd take to do so, at least for those of us with single reservations.
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Old Jul 16, 12, 3:07 pm
  #549  
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Originally Posted by davidbridgman View Post
I believe the law in the regard is indeed that state law can offer more protection than federal law, but not less. You're right, but it's not relevant to this situation.
That shows a misunderstanding of established constitutional law on the supremacy clause, the commerce clause and application to DOT regulations. The DOT regulations pre-empt state law on the same topic - that is why states cannot regulate airline advertising because DOT has established rules on that subject. The airlines successfully argued that it would be burdensome to comply with more restrictive advertising regulations in 50 states.

However where DOT has not established rules, i.e. mileage programs, state contract law would apply. Many people have successfully sued airlines in small claims court to collect damages for breach of contract, tort, etc. None of these suits were pre-empted by federal law.

Originally Posted by davidbridgman View Post
What it means is that if the DOT determines that this falls within the realm of a mistake fare, that UA has no mistake defense in contract law at any level. So you can throw any state law stuff out the window with regard to defenses based in contract. I mean, could it be any more clear that the DOT intended to preempt a mistake defense? The question is whether DOT mistake rule applies to ISSUED AND CONFIRMED award tickets the same way it applies to revenue tickets. I don't think anyone disputes that DOT has no control over FF programs or awards prior to the confirmed ticket being issued.

I can't fathom anyone arguing with a straight face that it's crystal clear that UA can void these tickets legally. This whole scenario has the makings of a law school exam question.
Your last 2 sentences are correct. Your first two are not. I think the DOT rules you cited are intended to protect consumers from price hikes on tickets that they purchased for cash, not miles which are not a currency as airline rules specifically state that they own the mileage program. But you'd have to go back to the regulatory history of the rule and also to see how DOT has applied the rule in administrative proceedings. You've done none of that here.

I think it is a good law school hypothetical for class discussion but not an exam question. Preemption would be discussed in conlaw, whereas unilateral mistake would be covered in contract law. @:-)

Originally Posted by Jesperss View Post
Love all the e-Lawyers here.

Hopefully not the same ones that were all over the AA/Cartera case.
Was all over that too though somewhat less sympathetic to Cartera. They ended up making a fairly decent settlement offer (was it 2500 or 5000 miles per purchase) which no doubt warded off most of the threatened litigation.

Originally Posted by flyinghigh77 View Post
my biggest hope actually is that both united and continental have stated in one of the country's top 3 newspapers that they will honor any mistake fare, no matter what. if they break that promise how credible is the new united, especially given all the other customer trouble they are having right now?
But this is not a mistake fare, it is a computer glitch that resulted in contradictory information being displayed on the screen for those who redeemed mileage for an award ticket. And I don't think this can hurt United's credibility any more than the other heinous things that have been done since the merger... most people don't care about this stuff except for a few hardcore FT junkies.
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Old Jul 16, 12, 3:07 pm
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Originally Posted by SFO777 View Post
70% of United F seats are revenue?? Can't imagine there are anywhere near that many people willing to fork over $$ for an inferior product, unless these are deeply discounted corporate deals.
Sorry, I was trying to draw a hypothetical example and totally butchered it, so I had edited it quite a bit. You read it prior to editing. My bad
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Old Jul 16, 12, 3:08 pm
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Originally Posted by GMUJD06 View Post
It seems to me if they were forced to individually call each of us, it may not be worth the man hours it'd take to do so, at least for those of us with single reservations.
It's not worth a 5 minute phone call to save thousands of dollars for a bogus reservation?
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Old Jul 16, 12, 3:12 pm
  #552  
 
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Originally Posted by GMUJD06 View Post
Does anyone know how United would go about rectifying this, assuming they don't honor the "deal"? Would they run a sweep and just cancel all award tickets to HKG en masse? Or can they tailor a sweep towards just those who paid 8 miles? It seems to me if they were forced to individually call each of us, it may not be worth the man hours it'd take to do so, at least for those of us with single reservations.
Believe me, even if they have to individually call, the amount of money spent is very small compared to all the F/B/C tickets issues for 4 miles.

And nowadays with technology, they find all the reservations and cancel quite easily if they want to. The hard part is the PR and dealing with regulations.
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Old Jul 16, 12, 3:12 pm
  #553  
 
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Originally Posted by colpuck View Post
Credited, I emptied my acct this morning.
Hi colpuck, wonder what you mean by crediting? The most I can transfer is 15k per person and that costs alot.

Do you just credit by booking another flight. Just like another post said, I thought about UA can always cancell any other bookings to get the miles back to my account and deduct for this event, any comment?

getting very anxious as now already past the 24 hours purchase mark and now within 24 hours of travel time
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Old Jul 16, 12, 3:12 pm
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Originally Posted by GMUJD06 View Post
Does anyone know how United would go about rectifying this, assuming they don't honor the "deal"? Would they run a sweep and just cancel all award tickets to HKG en masse? Or can they tailor a sweep towards just those who paid 8 miles? It seems to me if they were forced to individually call each of us, it may not be worth the man hours it'd take to do so, at least for those of us with single reservations.
If they decide to cancel they'll probably be able to do something automated or via email. If they don't cancel, I wouldn't be surprised if FT is the only source of confirmation on that.
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Old Jul 16, 12, 3:17 pm
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Originally Posted by Jesperss View Post
It's not worth a 5 minute phone call to save thousands of dollars for a bogus reservation?


But you're assuming my reservation is actually costing UA thousands of dollars in lost revenue. Granted, I've never flown to HKG on a 747, but other FTers indicate that the GF/BF cabins are rarely, if ever full. If my "bogus" reservation indeed costs them thousands of dollars in lost revenue, then yes, its likely worth their time to get in touch with me to offer me miles/certs for a cancellation (again, assuming they don't just cancel en masse). But I doubt that's the case. If I'm taking up a seat that otherwise would have gone unfilled, then I would argue the impact on their revenue is minimal. Multiply that by however many thousand of people who booked this, and perhaps its not worth all the phone calls.
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