Mistake Fares: Airline Sends Clear Message After “Epic Deal”

On the sidelines of many mainstream travel conversations exist some of the most passionate discussions, and they’re often about mistake fares. As you may have guessed, these are prices that weren’t necessarily ever intended to exist — and are often missing a zero or two.

Despite leaps in airline technology, they still happen and for obvious reasons, each new opportunity is as exciting as the first. I’m living proof of the potential benefit and have enjoyed ludicrous deals like $559 round trip business from North America to Australia, or $700 round trip business from Europe to Tokyo.

Sometimes these delights extend to points too, where someone means to put 150,000 points as a price for business class and ends up with 1,500. Oops!

That happened just recently with Air France and KLM, and Ben Lipsey, President of Flying Blue, the loyalty program behind these great airlines offered some unique insights, as well as a clear message.

Some Fun “Error Fare” Stats

In a must-read interview with Brian Sumers of the Airline Observer, Ben Lipsey shared some great numbers around this particular “mistake fare” and how the airline handled things.

In total, Air France KLM received 2,500 bookings of their points “error fares” which offered business class from North America to Europe from just 1,500 points one way and many similar opportunities under 15,000 points.

In a way, it’s a relatively small number — hardly the millions who participate in loyalty. But in another way, with most business class cabins at around 40 seats, all these bookings would represent over 60 flights full in business class with people who basically didn’t pay.

It would’ve been the steal of the century for many, and fascinatingly some actually got to hold onto the deal! Despite this, the airline set a clear precedent for most.

According to Lipsey, the airlines considered honoring all these mistake fares and in the end, ended up honoring a number of the deals for people who had previously shown loyalty to their loyalty program Flying Blue by earning elite status.

Yep, many passengers made away with 13,500 point business class deals, but only those who had built up a tier of loyalty prior to the mistake fare offering. Very cool.

Setting A Precedent For Mistake Fares

Mistake fares have been a very mixed bag for customers who jump on the opportunity. In 2018, Cathay Pacific honored mistake fares that sent people into the lofty delights of First Class to Vietnam and beyond for under $1200 round trip.

They honored and for the rest of the year, Instagram was saturated with proof. As I mentioned earlier, I’ve been on the winning end of a few other deals too. But lately the tides have been turning. Airline software is faster at identifying them and systems are also better at rejecting these mistake, or error fares.

Since the issue doesn’t really have a legal ground for customers to stand on airlines really make a decision as to the balance between fun press, goodwill and on the other side, financial ruin.

“But the thinking was, we wanted to set the precedent that a mistake fare was a mistake fare.”

Ben Lipsey, President of Flying Blue

Honoring mistake fares can create amusing short term headlines for airlines, but the thrill of getting in on the next big bank run also creates added pressure for the future. If people believe an airline is likely to honor a deal made in error, they’re more likely to try their luck.

As much of a bummer as it may be for chancers like us, you can’t help but agree that Air France and KLM did themselves some favors here, because if this happens again in the future, many people who ended up being refunded aren’t likely to dive in head first again.

In a truly impressive move, Flying Blue even offered to do something airlines hardly ever do, which was to reverse points transfers into the program from banks for those who wished. This is highly manual, time consuming and costly, so it was an impressive gesture. For what it’s worth, Flying Blue is a phenomenal program and had I taken part, I’d have just kept the points parked in Flying Blue.

So, Are Mistake Fares Over?

There’s always been a question about whether all mistake fares are truly mistakes.

Deep discounts are a great way to generate overall exposure, interest or goodwill with the broader public. I think more US consumers heard of Cathay Pacific during the wall to wall TV coverage from their error fares than the entirety of coverage for the brand beforehand.

For this reason alone, I’d argue not entirely. But — it’s a race against time. Airlines are constantly deploying sales optimization software and A.I. to monitor unusual activity.

With more airlines setting the precedent of refunding these opportunities, the chances of an airline taking a punt and letting it ride with customers becomes less likely. Once it’s normalized to cancel, others will feel less conflicted about cancelling.

One thing is for certain — not all fares that seem like errors are, and taking advantage of shoulder season, or off-season travel can really work in your favor. Airlines are all about offering deep discounts for early bookers who are willing to trade away flexibility for a price.