LATAM sold tickets between Madrid and Santiago, Chile for less than $400 a person and has now decided that the fare was a mistake. After more than 5 days, LATAM and Iberia started canceling tickets. Both LATAM, Iberia, and the online travel agencies are all blaming each other for this error fare. Who is at fault here? Likely, LATAM. Regardless though, hundreds of people purchased tickets at a set price and now the airlines are saying pay more. Another instance of corporation sellers remorse and consumers are paying the price.
The LATAM Iberia Business Class Deal
On June 15, 2022 an airfare deal was available for flights between Madrid and Santiago, Chile. Flights in business class sold for as little as $298 round trip. Some routings and dates cost more, but most dates and routes via Rio, Sao Paulo, Lima, or Buenos Aires priced around $300-$900 per person. The tickets specifically are 045 ticket stock (LATAM) with codeshare flights on Iberia for long-haul segments between Madrid and South America. LATAM was the operator only on the South American segment. Now, several days later cancellations are flowing in and LATAM and Iberia has followed Delta’s lead and canceled paid business class tickets, claiming a fare error.
The issue is that nothing about this fare is an error, other than maybe the base price. For example, the tickets I purchased had a base fare of $317 and taxes and fees of $50.20. Airport fees, taxes, etc all displayed on the reservation. This wasn’t a fuel dump fare or a fare that was missing taxes. Yet instead, it was just ticket with a low price.
Cancellations Begin, Everyone Blames Everyone Else
After several days, flights on reservations started to drop off records. First the LATAM segment. Then the Iberia segments. One my one, segments disappeared until all reservations were canceled. Now, 3 weeks later, there’s still not be a refund, but the claim it’s “processing”. Initially, I contacted Iberia for help, as they are the operator of the flight from Madrid to Rio de Janerio.
Thank you for your notification regarding the incident on flight IB6025
Iberia maintains trade agreements with other airlines to offer a complete network of destinations and facilitate travel for all of its customers.
In relation to the incident you describe, please note that under the terms and conditions of the codeshare agreement, it is not Iberia but the company which is responsible for handling such cases, and we therefore kindly request you to contact them directly. You will find their address on the website.
As expected, I got no where. So I sent an email to LATAM. 3 weeks later, nothing. Last week I did receive an email from the online travel agency that I booked through (Priceline).
We are contacting you on behalf of LATAM airlines regarding your booking.
We regret to inform you that your ticket(s) has been canceled. LATAM works in partnership with IBERIA, which even if operates part of your itinerary, owns the entire fare of your ticket and, unfortunately, processed it at the incorrect rate.
Please find here below the original statement of LATAM airlines:
NOTIFICATION OF CANCELLATION AND REFUND OF THE PRICE PAID DUE TO ERRONEOUS ISSUANCE OF IBERIA FARE
We hereby inform you that, at the request of IBERIA, your reservation has been CANCELED because, as IBERIA has reported, the rate of your reservation responded to an erroneous issuance.
We confirm that the refund of your reservation has been ordered and consequently will be immediately received by you.
We convey our apologies for the inconvenience caused by the existence of this error in the issuance of IBERIA of your reservation.
In the event that you need additional information, do not hesitate to contact us.
As clarified by Latam Airline in the statement above, your entire order, including any additional products, will be fully refunded.
We can assure you that your refund will be handled as a priority by the airline as well as by Priceline.
As we have no control over this issue, our customer support cannot offer you any other information beside what’s already stated above. Please contact LATAM Airlines directly for any other questions you may have.
For the most up-to-date information on your refund, please log-in on the “My Bookings” page.
The refund will be paid to your original form of payment and you will receive an email when it will be processed.
We apologize for any inconvenience this may have caused.
Thank you for your understanding.
Who to Blame
Reviewing the emails over and over again, Iberia blamed LATAM when I contacted them. Yet, LATAM is blaming Iberia. Or At least LATAM claims Iberia requested the cancelations. More than likely, Iberia said, to LATAM, PAY UP. Typically, airlines have an agreed upon rate for codeshare tickets/flights. Since LATAM sold the tickets for lower than the agreed upon price, they are canceling tickets. The blame game continues, yet meanwhile unless I do a charge back with my credit card, it appears as though my refund is “eventually” coming.
Am I surprised by any of this? No. Delta own’s a portion of LATAM and after their own codeshare fare error, LATAM is using the Delta playbook.
Error Fare Consumer Rights
Consumers always have a right. Mistake fares happen. Sometimes airlines do the correct thing and honor them. After all, don’t publish a fare and sell it for less than you want. After all, airlines don’t refund consumers if prices drop after purchase. In fact, most tickets are non-refundable and non changeable. Therefore I am a strong proponent of holding the airlines responsible and making them honor tickets, no matter the price. Especially when nothing about the price is a clear mistake. It’s not a currency conversion error, or a tax issue. It’s just a low fare!
EU 261/ 2004 Protections
There is a lot of talk on the flyertalk forum if EU 261 / 2004 protections apply here. Under the EU 261 rules, the operating carrier is responsible during a cancellation or delay. In this case, the flights are still operating, but Iberia, an EU airline, is denying boarding due to a cancelation of the LATAM ticket. Typically for denied boarding and cancelations, an airline is not liable for providing cancellations if the cancellation is more than 2 weeks in advance. However, the passenger is suppose to have the option for a refund or rerouting. They airline cannot strongarm you into taking the refund.
EU 261/ 2004 applies to all EU airlines and non EU airlines departing from the European Union. Therefore, for those who did take part in this deal, there is the option to file a complain with the Spanish authorities and ask that LATAM/Iberia reinstates your flights. I have filed a complain with AESA, sharing with them the responses of my inquiry from the airlines. Will my ticket be reinstated? That is anyone’s guess.
There will always be two sides of the coin. Some people will say, don’t buy a ticket that you know is a mistake. Other’s will say, buy a good deal when you see one. If airlines are not required to honor these fares, there is no telling what is a legitimate fare and what is not. The sub $400 business class tickets were on sale for more than 24 hours. There’s no reason to not think that Iberia/LATAM were not having a sale.
We cannot reward companies for bad behavior. Airlines should have to honor all fares sold. Just like we do not have the opportunity to get a refund when prices drop. In the world of airfare and flying, consumers are constantly punished by contract of carriages which provide the airline with to many rights. If airlines can cancel a ticket due to a low price, we should be able to cancel one due to a higher than normal price. Mistake fares need to be honored and it’s disgusting that Iberia, LATAM, and the online travel agencies are ALL pointing the blame, but not taking any responsible. Error fare or not, tickets needs to be honored.