Matthewonlive and let's fly

Swiss Int’l Air Lines Cancels RGN Tickets

Last week, inexpensive business and first class fares originating out of Yangon, Burma popped up again to many Canadian destinations and were bookable for about 6 days (from 21-26 September 2012). Many were able to take advantage of the great deal, myself included. Popular routings included Swiss First via Tokyo and Zurich to Montreal, although flights were bookable on all three alliances. One week later, Swiss Int’l Air Lines has begun the process of unilaterally canceling all tickets issued on its own 724 stock. The question now: is it time to fight? In short, yes.

Swiss sent out the following e-mail to some whose itineraries were cancelled (bolding mine)—

Subject: Cancellation of your ticket due to erroneous fare

Dear Sir/Madam,

We are writing in regards to the travel you recently booked with Swiss International Air Lines Ltd. from Yangon (RGN), Myanmar. Unfortunately, as you must have been aware of, the fare you purchased was incorrect and resulted from an inadvertent error that was out of our control. While SWISS honors its commitment to the highest level of customer service and safety in air travel, it must also honor its obligations to its employees and shareholders.

We are not obligated to provide our services for compensation that is obviously erroneously published and commercially infeasible. We are aware that good travel bargains are quickly recognized and booked, however principles of fare bargaining dictate that a service provider does not give away its services for almost free or at a loss.

Because the fare you booked was not valid, we will unfortunately have to cancel your reservation and ticket. We are extremely sorry for this error and we are not increasing the price of your ticket; rather we will promptly issue you a full refund for the total price you paid for the ticket. The full amount will be automatically credited using your original form of payment. In the event that you would like to rebook your itinerary at the appropriate price, please contact your nearest SWISS service center or your travel agent.

SWISS deeply regrets the inconvenience caused by the publication of the erroneous fare to the passengers who may have thought they had booked and purchased a valid ticket for an erroneous cost. We apologize for this unfortunate situation and trust your future travel on SWISS is comfortable.

Sincerely,
Swiss International Air Lines Ltd.

Malzgasse 15, Basel/Schweiz
Registereintragung/Registration:
Handelsregisteramt des Kantons Basel-Stadt

This painstakingly-crafted but incredibly presumptuous letter from Swiss comes as no surprise. After all, Swiss fought tooth and nail against a $400 return fare in business class from Toronto to Delhi via Zurich in 2009.

But let’s be clear about something—this was not a mistake fare. Swiss intended to sell the fare for 130,000 MMK and that is what it sold for. What Swiss did not anticipate—and perhaps IATA shares some blame in this, though that should not be my concern or the concern of any other consumer—is the currency fluctuations that have affected the Myanmar Kyat lately. Swiss Air’s beef should then be with IATA, not consumers.

For reasons of convenience and because of my understanding of the new U.S. Department of Transportation (DOT) regulations concerning so-called “mistake fares” on airlines that serve the United States, I did not include a segment on my trip that touches the USA. I will travel directly from Zurich to Montreal in Swiss First.

Here is the pertinent DOT regulation (again bolding mine)—

Does the prohibition on post-purchase price increases in section 399.88(a) apply in the situation where a carrier mistakenly offers an airfare due to a computer problem or human error and a consumer purchases the ticket at that fare before the carrier is able to fix the mistake?

Section 399.88(a) states that it is an unfair and deceptive practice for any seller of scheduled air transportation within, to, or from the United States, or of a tour or tour component that includes scheduled air transportation within, to, or from the United States, to increase the price of that air transportation to a consumer after the air transportation has been purchased by the consumer, except in the case of a government-imposed tax or fee and only if the passenger is advised of a possible increase before purchasing a ticket. A purchase occurs when the full amount agreed upon has been paid by the consumer. Therefore, if a consumer purchases a fare and that consumer receives confirmation (such as a confirmation email and/or the purchase appears on their credit card statement or online account summary) of their purchase, then the seller of air transportation cannot increase the price of that air transportation to that consumer, even when the fare is a “mistake.” A contract of carriage provision that reserves the right to cancel such ticketed purchases or reserves the right to raise the fare cannot legalize the practice described above. The Enforcement Office would consider any contract of carriage provision that attempts to relieve a carrier of the prohibition against post-purchase price increase to be an unfair and deceptive practice in violation of 49 U.S.C. § 41712.

For travelers like me who do not have a U.S. segment on their itinerary, the question really is what does that mean?  I read it broadly to mean that if a carrier does business in the United States they cannot retroactively increase the fare, no matter what the specific itinerary booked is. In other words, the price of doing business in the USA is that when you sell a ticket at a certain price, you must honor it at that price or face fines from U.S. regulators.

At least so far, the DOT disagrees. They have already sent out this note to a number of travelers whose itinerary does not touch the United States--

We are sorry to hear of your dissatisfaction. However, our jurisdiction is limited to air transportation within, to, or from the United States. Because it appears that your itinerary is for air transportation between two or more non-U.S. points, the regulations enforced by our office do not apply to your transportation. Please contact the carrier directly.

Thank You for Taking the Time to Contact Us,

[name redacted]

Aviation Industry Analyst

US Department of Transportation

I am not willing to accept that shirking of responsibility by the DOT. Take my ticket for example—it was booked on expedia.com, a U.S.-based travel agency by a U.S. citizen (me). Perhaps it should be Expedia, not Swiss, who must be forced to honor the ticket (again, at this point I really do not care who is to blame), but what is the purpose of this new regulation? To protect U.S. consumers from airlines who decide that they no longer wish to honor an airfare because they deem the price paid was not enough? If so, it should not matter what the itinerary is.

This trip will be a special one. My Uncle turns 85 this year and the RGN-KUL-SIN-FRA-ZRH-YUL ticket I booked will link nicely with our trip to Australia in Singapore Airlines’ Suites Class next year. His birthday is next month (he does not read this blog, thankfully!) and this ticket was to be a big surprise for him. Like many, I did not just book these tickets for the heck of it, but with a very specific purpose in mind.

(Not that should really matter in the eyes of the law)

I will deal with the DOT in due time, but my first course of action will be to contact Swiss Air directly and ask them to resolve the issue amicably. I do not expect that will lead to a solution, at least initially, so I will likely have to file a formal complaint with the Canadian Transportation Agency (CTA), which has been helpful in the past in “encouraging” airlines to honor the tickets they have issued.

The point here is not about me. It is not about Swiss. It is about the idea that a company can sell a product to a consumer for a listed price, charge that consumer’s credit card, then decide one week later that the price paid was not high enough.

Even with the United Airlines 4-mile award deal to Hong Kong, which was quite different in that a different price was displayed throughout the booking process up until the final confirmation screen, I ultimately argued that the fare should be honored because United took far too long to respond. Had Swiss cancelled the fare within 24 hours, they would still have had a fight on their hands, but the fact that they have waited a week and only now begun the cancellation process is simply unacceptable. The fact that they just cancelled my ticket with absolutely no notification is likewise unacceptable.

Swiss will be held to account for their actions. At least in my case, it will not be because a spoiled passenger wants a cheap first class seats but because Swiss Air’s actions set a dangerous precedent that undermine consumer rights for everyone and lead to a level of unpredictability that is unpalatable in the fast-paced world of commercial airline tickets.

What I said three years ago hold true today--

"Imagine if I had purchased a nonrefundable ticket and decided 48 hours later that I no longer wished to travel, so I called the airline and asked for my money back," Mr. Klint said. "Do you think they would be receptive? Of course not, they would laugh at me. It sets a dangerous precedent when an airline can unilaterally cancel a contract because they decide they no longer like the terms."

Fasten your seat belts and join me for this ride. It is going to be an interesting one.

This content is not provided or commissioned by the company whose products are featured on this site. Any opinions, reviews, analyses, or evaluations provided here are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by the Advertiser. This site may be compensated through the Advertiser's affiliate programs.

Comments

#1
BR October 8, 2012 at 08:11 pm

Thanks for posting this info. I also have similar flights on LX booked that were canceled. However, my flights leave in about 2 weeks and I doubt a decision will be made by then or with enough time for me to plan relatively cheap positioning flights.

I am in the same boat as you. I do not have a segment that touches US soil. I've already contacted Swiss and am awaiting their response before I contact the CTA. Please keep up posted!

#3
ClearedCustoms October 8, 2012 at 10:48 pm

Funny, if "the fare (we) booked was not valid" then why did Swiss issue tickets and charge our credit cards? Anyway, sorry to hear you don't have a US leg. I'm lucky enough (or not) to have a cancelled Swiss ticket with a transfer at JFK.

#4
JJ October 8, 2012 at 11:01 pm

Hi Matthew,

Thanks for the great post and research, will be fighting Swiss on this. One point, The fare was live and bookable for almost a week, it was filed by IATA on 21st September. First mentioned on milepoint on Wednesday 26th September when people had already booked tickets. Once it became public on FT and other sites it died within 15 hours.

#5
ekruger1 October 8, 2012 at 11:07 pm

My ticket was also cancelled and unfortunately I'm not covered by DOT (no US stop) either. Following your advice I have emailed Swiss. Keep us posted on their response and next steps, I'm out of my depth on what I should do if they do not reinstate the ticket. Thanks!

I think it is important that we do not give up on the DOT yet--it just doesn't make sense to me that a U.S. travel agency can issue a ticket to a U.S. citizen on the stock of a carrier that flies to many U.S. cities, but that somehow we are not covered because this particular ticket does not touch the US, only a city 90 miles north of Vermont...

#7
Jonathan October 9, 2012 at 01:40 am

CTA will do nothing. Bet on it.

#8
Mike October 9, 2012 at 04:26 am

Great post! Don't give up the fight. I got SQ Suites on LX tickets as well. Cancelled as we all know. By now I care more about Swiss illegally canceling the tickets rather than actually flying the Suites...

Just one little thing that got my attention in your post: Was the fare really bookable for only 15 hours? I'd say it was online for more than 1 day?

#9
Carl October 9, 2012 at 09:37 am

Matthew, I booked a trip on travelocity.com which was issued with ticket numbers on LX 724 stock, and my credit card was charged, and my tickets includes JFK, so it does include U.S. transportation (with a 22-hour layover.)

I too received the Swiss cancellation email, and when I go to travelocity the LX segments are gone, though the NH and AC segments remained.

How can I most effectively fight this? I have filed a DOT complaint last Thursday but I haven't heard back from them yet. Should I contact Swiss directly? The tickets were about $730 each (two tickets) so they weren't "almost free".

@Jonathan: Why would you say that? They have helped me twice before, once with a blatant error fare (unlike this one) and I have no reason to believe they would not this time.

@Carl: Hopefully the DOT will come back soon with good news, but just to show that you have exhausted your remedies, I would also send a note to Swiss asking them to re-instate the tickets, saying the cancellation of your ticket violates established principles of contract law, and that you refuse to accept any resolution short of reinstating your original routing in your originally booked class of service at the price you paid.

@Mike: Thanks--I'll update the post.

#11
BRLfly October 9, 2012 at 02:20 pm

Matthew,

I am a huge fan and I wish you posted more often but I know this blog is not your primary occupation. As a tax attorney who reads, interprets and dissects US statutes/regulations for a living, I (unfortunately) think that you are fighting an uphill battle.

The regulation (admittedly I have not read the underlying statute)does start off with "any seller" but qualifies it with the "within, to, or from the us..." blah blah language. Also if I were representing Swiss air, an argument could be made that only the segment that actually touches the US is subject to this regulation (although it appears from past application the DOT has not taken this position). As someone who constantly spars with the US gov't, (and a fan of yours and mistake fares in general) I wish you good luck.

Keep us posted

#12
arcticbull October 10, 2012 at 02:37 pm

So I'm in for one of these also. This would be my third trip to -- er, from :P -- RGN in a premium cabin. I did RGN-BKK-NRT-SFO the first time, I'm in for RGN-NRT-LAX-YVR next month, and was scheduled to fly RGN-(KMG)-PEK-ZRH-YUL next March. What can I say, I love the country ;) I'll definitely take your advice and push back on this cancellation. Please keep us updated on your efforts.

#13
stephan October 11, 2012 at 10:14 pm

Love your blog, but I fear that you will not get much satisfaction on this especially since you have no legs touching US soil. SWISS will take their chances on being sued. DOT may help those with US legs, but the rest are out of their jurisdiction and this administration ain't about to do anything volatile with respect to foreign transactions. Maybe you can sue Travelocity, but again they'll bet you lose interest. What real recourse do you have?

@stephan: CTA. Trust me. I will fly on this.

#15
Joe lee October 18, 2012 at 11:30 pm

Just give up you sound so greedy !!!

@Joe: I don't roll over, like most. No apologies for that. And that is not greed.

#17
ZO October 23, 2012 at 05:22 am

any further developments. With my LX-plated ticket cancelled, all the other segments (like the SQ R-class from SIN-ZRH) are dropping off. I fear that if LX is ever made to reinstate the tickets, there will be no more seats left on the flights originally booked (I imagine they are counting on that too)

No developments yet.

#19
Mike October 24, 2012 at 04:20 am

Hi Matthew, People complaining to CTA got another response from Swiss yesterday:

Dear Mr. X: We have been informed of your inquiry with The Canadian Transportation Agency (CTA) concerning the recent cancellation by SWISS of ticket number...for travel between Yangoon (RGN) and Montreal (YUL) issued to you at an erroneous fare. We first wish to confirm that your tickets have been fully refunded ..., the Acquirer’s Reference Number (ARN) for this refund being.... While processing times can vary depending on your method of payment, please feel free to contact us if you have not received your refund. As already indicated to you in our October 4, 2012 email, the fare appearing on the tickets you purchased was incorrect and resulted from a technical error attributable to third party travel entities unbeknownst to and beyond the control of SWISS. Under Canadian law, SWISS must file a Tariff with the CTA which must contain, among other requirements, its General Conditions of Carriage. Paragraph (F) of Rule 5 APPLICATION OF TARIFF of SWISS’s Conditions of Carriage provides: ERRONEOUS FARES Swiss reserves the right to cancel reservations and/or tickets issued with an erroneously quoted fare by reason of a technical failure prior to said erroneous quote being detected and corrected. Swiss reserves the right to void the purchased ticket and refund the amount paid by the customer and/or offer the customer the ticket at a published fare that should have been available at the time of booking. Rule 5 (F) was approved by the CTA under Special Permission No. 59292 and became effective on February 2, 2011. As offered in our October 4 email, SWISS will be pleased to rebook your tickets at the applicable fare should you choose to travel as planned, space permitting. It would be our pleasure to welcome you on board and to convince you of the service and quality standards SWISS has to offer. Yours sincerely, Swiss International Air Lines Ltd. Customer Service cc. CTA, Air Transportation Complaints

They are claiming now that the mistake was a "technical" one. They didn't do so in their October 4th email. ("inadvertent error"). Also the CoC on Swiss.com don't contain this Paragraph (F) even though they refer to the CoC on swiss.com on their tickets. is that relevant? I don't believe the "error" that occurred was a technical one in the sense of Rule 5 (F)? Any thoughts?

Very interesting. I've been away from the thread the last couple days...

I'll reflect and write about it on Thursday or Friday.

I haven't heard anything back yet.

#21
Mike October 25, 2012 at 03:51 am

It seems to me they are grasping to the last straw. Lawyers misquoting there own words is a strong indication of that ;-) Lets wait and drink some Canadian tee...

#22
Mike October 30, 2012 at 04:19 am

Also have a look at this:

http://www.lexcanada.com/lib-av-1205-01.html

www.cta-otc.gc.ca/eng/amendments-air-transportation-regulations-atr-and-canadian-transportation-agency-designated-provisio

Someone just posted the first link on FT. So it seems Swiss violated subsection 116.1 of the Air Transportation Regulations? The maximum fine is set at $10,000 so this is not going to hurt a lot. Still very interesting.

#23
ZO November 17, 2012 at 06:58 pm

Looks like more tickets are being cancelled, and from earlier rounds too. Thoughts? Predictions?

#25
Stephan November 19, 2012 at 03:43 am

As was said previously, you guys need to move on.

Leave a Comment

Your email address will not be published.

e.g. http://www.example.com/