Mistake fares: how they happen and whether you get to keep them

On New Year’s Eve 2018, Cathay Pacific loaded a fare for flights between Vietnam and North America that priced business and first class seats at roughly the cost of economy. Round trips that should have sold for around $13,000 went out at about $675. Several thousand tickets sold before anyone noticed.

Two days later, the airline said it would honour them anyway. That decision was remarkable enough that people still write about it, which tells you what the normal outcome looks like.

What a mistake fare is, precisely

A mistake fare is a price the airline did not intend to publish. That distinction matters, because a sale is also a low price, and the two are handled completely differently once you have booked.

Fares reach booking systems through a chain of filings, currency conversions, tax and surcharge rules, and distribution feeds. There are a lot of fields, and each one is a place for something to go wrong. Three failure modes account for most of what you see.

Data entry. Someone loads a fare into the wrong fare basis, drops a digit, or attaches an international fare to the wrong route pairing. The Cathay case was reported as exactly this: fares entered incorrectly for flights between Vietnam and North America.

Currency conversion. A fare filed in one currency gets converted at the wrong rate, or converted twice, or treated as though it were already in the destination currency. These tend to appear on routes sold in an unusual point-of-sale market, which is why mistake fares are often bookable only when you set your country to somewhere you do not live.

Missing surcharges. Long-haul tickets carry fuel surcharges and taxes that frequently exceed the base fare. Where a rule fails to attach them, the ticket sells for the base fare alone, which can be a small fraction of the intended total.

None of that is a deliberate promotion, and none of it survives contact with someone in revenue management who is paying attention.

Whether you get to keep it

For US-sold tickets, the answer changed in 2015, and a lot of advice online still reflects the old position.

Before then, 14 CFR 399.88 prohibited increasing the price of a ticket after purchase, which was read to mean airlines had to honour mistaken fares. Then on 8 May 2015 the Department of Transportation issued a mistaken fare policy statement saying its enforcement office would not pursue carriers that cancel a mistaken fare, provided the carrier does two things: demonstrates that the fare really was a mistake, and reimburses buyers for reasonable, actual and verifiable out-of-pocket expenses incurred in reliance on the ticket, in addition to refunding the ticket price.

The policy names the kinds of expenses it means: non-refundable hotel reservations, destination tours or activities, cancellation fees on non-refundable connecting flights, and visa or other travel fees. It was issued as an interim measure pending a final rule.

So the practical position is: the airline may cancel, but doing so is supposed to leave you no worse off than before you booked. In practice, that protection is a claims process rather than a guarantee, and it is the reason for the advice about hotels below.

Separately, and usefully, the 24-hour reservation requirement works in your favour: for tickets bought at least seven days before departure, US carriers must let you cancel for a full refund within 24 hours. Note that this one does not apply to bookings made through online travel agencies or other third-party agents.

The rules of engagement

If you find one, the difference between keeping it and losing it is mostly about not drawing attention to yourself.

Book online and book direct. Airline websites process the fare without human review. Third-party agents add a party who can void the booking independently, and you lose the 24-hour protection.

Do not call to confirm. This is the mistake people make most. Nobody on the phone can grant you protection you do not already have, and the call routes your booking to a person with the authority to cancel it.

Book only the flight. No hotel, no car, no connecting ticket on a separate airline, not yet. If the fare gets cancelled, the DOT policy points at reimbursement for those costs, and you would rather not test how smooth that process is.

Wait for the ticket number. A booking reference is not a ticket. What you want is a confirmed e-ticket number, ideally still there a few days later.

Then wait longer. The comfortable point is somewhere past a week with the ticket intact. Some cancellations arrive well after that, but the risk drops sharply with time.

Skip the change fees. Do not modify the booking. Any touch on a fare that should not exist is an invitation to reprice it.

Why they favour whoever was already watching

Mistake fares are corrected in hours, sometimes in minutes, and the correction is faster now than it used to be because the fare-monitoring community spots them and publicises them quickly, which is exactly what alerts the airline.

That produces a short and unforgiving window. Being the person who searched hardest after the fact is worth nothing. Being the person who was already watching that route, and who could recognise a $675 business class ticket as absurd rather than plausible, is worth everything.

Which is a version of the same point that runs through judging any fare: the value is not in the search, it is in knowing what the route normally costs, so that an abnormal number registers as abnormal immediately.

A realistic expectation

Mistake fares are the most fun part of this subject and the least reliable. They are rare, they are geographically arbitrary, and they will not appear on the route you need in the month you need it. Nobody should plan travel around them.

They are worth understanding anyway, because the reflexes that let you act on one in twenty minutes are the same reflexes that get you a good ordinary fare: knowing your route’s normal price, booking direct, and understanding what protections you actually have. The unicorn is a bonus. The habits are the point.