How thousands of people were sold first-class tickets across the Atlantic for $80
By B.R.
WHEN Matt and Emil, a couple of expat Americans living in London, were invited to be groomsmen at a friend’s wedding in New York, they feared they would not be able to afford to make the transatlantic trip. And then fortune intervened. They heard about a glitch on United Airlines' British website. A computer error meant that the airline was offering trips across the pond for just £52 ($80), as long users selected to pay in Danish kroner. Even more remarkably, the tickets were for the first-class cabin.
Naturally, the two men jumped at the chance. And then fortune slung an arrow. United announced that the price was a mistake and that it would be voiding not only their tickets, but those of several thousand others who had got wind of the deal. United had “properly filed its fares”, the firm said, and a fat-fingered third-party software vendor had made an error with the pound-to-kroner exchange rate. In other words, although the tickets were purchased on the airline’s own website, the cock-up had nothing to do with the company.
“Clearly it's not the customers’ fault that the third-party providers they use made this error,” says Emil, who will probably now have to put his tuxedo back in mothballs. “And even more so it is not fair to revoke the tickets that were already purchased.”
In fact United’s action raises three distinct questions. Not only whether voiding the tickets was fair, but whether it was legal. For the airline, there is also a purely economic consideration: is the potential loss of revenue that it could expect worth more than the bad publicity and customer anger it is now facing?
The first two questions are bound together somewhat, and hinge around whether the customers who flocked to United’s website did so knowing full well that they were taking advantage of a mistake. The fact that so many Brits suddenly decided to pay in kroner suggests that they did. It was not long after the glitch was uncovered that people took to blogs and social media to spread the word. “The traditional rule at common law,” says Peter Cartwright, a professor of consumer law at Nottingham University, “is that if one party has made a mistake as to the terms of the contract and the other party knows of that mistake, the contract is not binding.”
There is also the question of whether the contract had already been formed. “Usually the terms of an online contract will say when this takes place, or the consumer may get a communication which makes it clear that the contract is formed,” says Mr Cartwright. It is not simply formed when a customer hits the buy-tickets button. There may be a case to answer that United gave a misleading price indicator—that it was drawing customers in with a low price before raising it. But that is a matter of regulation, not contract, and in any case arguing it simply made a mistake could again be made in mitigation. Nonethless, the United States Department of Transportation says it is looking into the affair.
So is it fair? If customers were not themselves acting in an upright way—gleefully jumping on an error by United—can they really claim that the carrier is in turn being caddish by voiding their tickets? There are some who would no doubt argue that, given how badly big airlines treat their passengers, any such minor victory is justifiable. But that is hardly going to wash with United, which in this case is making the decision about who flies.
So the real question is whether the cost of a public relations own-goal outweighs the financial saving. That is more difficult. The airline says that “several thousand” customers booked the £52 tickets. These might normally cost £3,000. One could mischievously argue that as the reputation of United is already so bad, the airline would always be right to err on the side of saving revenue (the hit could have amounted to several million dollars). But the firm did have a brief opportunity to show itself in an unusually positive light. Had it said—with forced jollity—that it had made a mistake but had decided to reward its customers with a feelgood present, then it could have expected reams of positive coverage. But that plane has now left the terminal. The damage is already done: no matter what it does now, the miserliness is probably all that people will remember. Maybe next time it will employ some thinner-fingered software suppliers.
