How Airlines Protect Themselves Against Flight Cancelations - With the Help of Your Wallet

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A plane landing. Make sure you inform the airline if you're going to be a no-show.
A plane landing. Make sure you inform the airline if you're going to be a no-show.

Haim and Shirley (not their real names) couldn’t wait for their vacation in Thailand. They bought flight tickets, booked a hotel and expected to take to the friendly skies. But as often happens during vacation, not everything went according to plan.

They’d booked their flight to paradise on Aeroflot, which was supposed to fly them from Tel Aviv to Bangkok via Moscow. They were then mean to fly from the Thai capital to Phuket.

The first flight, from Tel Aviv to Moscow, was scheduled to leave Ben-Gurion International Airport on a Friday night at 1 A.M. But the couple mistakenly believed there were no flights on Friday nights and that the flight was actually on the Saturday night. That mistake would cost them dearly.

When they realized their error, they were referred to the travel agency through which they’d booked the tickets. They explained their confusion and asked for help getting an alternative flight to Moscow that would enable them to make the connecting flight to Bangkok. To their surprise, all the flight tickets they had booked at Aeroflot had been canceled.

Flight companies routinely cancel all tickets held by “no-shows,” even if they could have used the tickets.

Haim and Shirley didn’t want to lose their whole vacation, so they bought new tickets through a Turkish airline and flew to Thailand as planned. Back in Israel, they sued the travel agency in a small claims court for the 9,800 shekels ($2,770) they’d had to pay for tickets they hadn’t used, arguing that the agency hadn’t warned them about the possibility that all their tickets would be canceled if they failed to show up for the first flight.

In court, the agency argued that the couple’s omissions were what led to the tickets being voided, so they had no one to blame but themselves.

The court accepted part of the couple’s claim and awarded them 4,900 shekels – half the cost of the tickets’ cost, plus expenses. The agency had warned the couple in advance that cancellation costs would be maximal because the tickets were cheap, but didn’t manage to convince the court it had warned them that failure to show up for the first of the four flights would automatically void their other tickets.

Airlines hate no-shows, which result in empty seats they otherwise could have sold. Also – certainly in the case of nonrefundable tickets – if a customer advises that he won’t make it, the airline can resell the seat and make double the money.

No less than three class action motions against three different airlines are currently pending in Israeli courts, all based on this problem of a no-show leading all tickets to be voided. All are being handled by Judge Ofer Grosskopf at Central District Court in Lod (the closest court to Ben-Gurion airport).

Passengers going to the boarding gates at Ben Gurion International Airport, Tel Aviv.Credit: Eyal Toueg

The claimants argue that the sanctions are excessively punitive and the airlines allow themselves to cancel all the tickets without advising the client, even though the tickets were paid for and they could have made the other flights. Not only do consumers get punished by losing the tickets, the airlines don’t return their money.

Ticket ploys

What the airlines really think of no-shows can be gleaned from an economic opinion one submitted to court, which stated that no-shows are fundamental to the airline’s pricing policy. Moreover, as far as they’re concerned, canceling their no-show procedure will ruin their pricing model, which could wind up having negative implications for consumers.

Each ticket they sell is priced differently, though they may be for the same flight. The airlines’ goal is to maximize profitability. For instance, consumers cherishing flexibility will be prepared to pay a premium for tickets bought at the last moment.

According to that opinion, the airlines need a no-show procedure to protect themselves from the “tricks” of travelers who want to lower their flying costs. According to the airline, technological developments now allow passengers to carry out “bypassing practices” (once the fiefdom of travel agents) – they book tickets they won’t even use in order to reduce the cost of the overall flight.

One such ploy is the “hidden city” ticket, where the cost of flying from A to C via B will cost less than flying from A to B. Customers who realize this buy the tickets from A to C via B, but skip the final part of the flight.

Then there’s throwaway ticketing, where buying a return ticket costs less than flying in one direction – so the traveler is a no-show for the return flight.

The third method is back-to-back ticketing, which refers to instances where the customer purchases two round-trip tickets but uses only one of the segments of each flight, since this is lower than the price of the actual round trip ticket on the dates the customer wants.

Obviously, there are people out there buying tickets they know they won’t use. But there are also innocents who, for whatever reason, miss a flight and are baffled by the loss of all their paid-for tickets.

The class action plaintiffs say that even if there is logic to their no-show procedure, airlines could treat their customers more consider. They don’t have to always void the remaining segments of the trip – and, at the very least, they should advise the passenger who paid good money for the tickets and didn’t mean to act in bad faith.

Three years ago, the small claims court found against Italian airliner Alitalia for unreasonably denying a passenger the right to utilize flight segments he’d booked because he missed the first flight. The court disagreed with the airline that it had been caused damage by the passenger failing to show up: it had not been caused any damage, even if it hadn’t managed to sell the seat, because the passenger had paid for the seat in full, the court pointed out. If anything, it added, by voiding later segments that had also been paid for, the airline could resell them and be well in pocket.

In 2015, the appellate court found against Delta, after the U.S. airline canceled three unconnected flights on different days after a no-show.

“The passenger did not wish to change the route of the flight, but merely waived one segment he didn’t utilize,” said the court – and it had nothing to do with the next flight or the one after that. Again, if anything, the carrier could resell the seats. The court frowned on the practice of passengers being told that failure to show up for the second segment would lead to cancellation of the third: they deserved compensation for the mental anguish of not being free to plan their trip as they wished.

Two months ago, the Italian antitrust authority fined British Airways and Etihad Airways 1 million euros ($1.2 million) for disclosure failures. Its position was that there can be a balance between the interests of the airlines and the interests of the passengers – as long as the procedure is clear. The authority decided that the airlines’ policy was unfair to customers, who were not advised of the no-show procedure and its conditions.

Policing the policies

Some airlines even fine passengers who fail to show up for a segment of flights and don’t advise the airline in advance. Korean Air might fine no-shows between $50 and $120 (depending on the destination); Singapore Airlines fines them $75; and skipping a Japan Airlines flight will cost the customer $300.

The Lufthansa group, which includes Lufthansa, Swiss and Austrian Airlines, also fines no-show passengers, but doesn’t have a price list; it depends on the type of ticket they bought.

British Airways and Brussels Airlines don’t fine customers exactly – they recalculate the cost of the segments they do fly. A flight ticket is a contract, explains Brussels’ CEO in Israel, Robbie Hershkowitz: it can’t just be unilaterally changed. The price of the whole flight affects the price for a segment.

El Al claims it doesn’t automatically void the rest of a booking following a no-show; Delta has a flat-tire policy which means that, if you show up at the airport within four hours of the flight taking off (yes, you missed it), it won’t cancel the rest of your ticket.

Basically, if you’re going to miss a flight, make sure you tell the airline – don’t just not show up.

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