Lufthansa has successfully sued a Germany based travel blog after the site actively advertised ‘Error Fares’ to their readers which can also be searched for on their website using a Kayak tool.
The court agreed with Lufthansa that this type of advertisement constitutes unfair trade practices, especially in an antitrust context as the website itself is in the business of selling travel services.
Error Fares or ‘Special Deal Fares’ have been around for as long as fares are filed electronically and available to be booked through either an online portal or actual travel agent.
Hunting for these fares became mainstream only in the last couple of years when certain travel blogs started to publish such ‘deals’ as soon as they were known and then thousands of people from all over the world descend on them like vultures and without a good background of information.
Most of us interested who are in travel might remember that it was much different 10-20 years ago when Flyertalk just started and these fares were circulated there. Even though publicly available it was a much smaller circle and somewhat hidden from the public eye (including the airlines).
Nowadays the attention to a good error fare is so big that it’s counterproductive because for example if an airline suddenly has it’s entire First Class inventory zeroed out over months then they have very little choice but to just cancel everything. In the past ‘Error Fares’ were mostly honored by the airlines but the more mainstream they became it ended up being impossible to extend such goodwill.
Lufthansa has always been known for taking it a step further and actually goes to court frequently with customers when it comes to disputes such as refuting the contract of an error fare ticket. This time they didn’t go after the customers but declared war on websites that publicize these fares and their first target (I assume more will follow) was the popular German site Urlaubspiraten.
Lufthansa argued that the site is in the business of not only giving travel advise but also to sell travel products and services, either offering it themselves or via a search engine available on their page. The court followed this argument and decided that the publication behavior of sites like these (at least under German jurisdiction) constitutes a violation of antitrust frameworks as the practice damages the competitions business model.
You can access the court docket (in German) here.
Here are some bullet points:
- If an operator of a travel website directly animates it’s users/readers to book error fares that constitutes a deliberate action to damage the competitions business model.
- The court considered in it’s decision that the defendant is the leading German website in the field of ‘Travel Deals’ and therefore in direct competition to Lufthansa as a carrier when it comes to ticket distribution.
- If a customer books an Error Fare ticket not to actually use it but instead negotiate a compensation payment through settlement he violates the law per
- Lufthansa claims that they incurred a total loss of 450,000 EUR for the issuance of Business class tickets in September 2017 from Germany to California at 687,- EUR per ticket instead of the original price which they declared to be 3846,- EUR.
Overall I think this is a dangerous precedent that an airline think it’s appropriate to go after publishers instead of investing more resources into their quality control when it comes to filing fares.
Going after the public with legal means to camouflage the inability to deal with incorrectly filed fares is wrong. Lufthansa argues that it’s not possible to deal with such a fare outside normal business hours while on the other hand outlining that the website offers WhatsApp alerts for ‘Error Fares’. This is mutually exclusive and complete baloney in my opinion. You’re talking about a global company where it should be absolutely possible that someone is working in shifts to pull then plug on an incorrectly filed fare. This ‘I only work from 9-5 and what happens beyond that isn’t my problem’ is a typical German attitude and should have no merit in court.
The court decided against the travel portal and ruled that they have to pay a fine of up to 250,000 EUR for each future violation or alternatively 6 months jail for the CEO of the company.
A few years ago when the Cape Town Error Fare was around I booked two tickets and eventually ended up in a U.S. court as well after Lufthansa cancelled them. I had about 3 pounds of paperwork from their attorneys at home and just last December dumped it all in the garbage. Back then Lufthansa sold tickets from Prague to Cape Town in First Class for as little as 800 Euro and the case is also cited in the court decision as a burden for the airline as far as legal procedures and expenses.are concerned.
This will obviously go to appeals court because the defendant has a vital interest of getting this overturned otherwise they’ll be sued by all sorts of airlines and hotel chains in the future which is very costly and destroys their business model. I don’t believe that the law was properly applied here and look forward to the decision on appeal. This was a relatively low court (Landgericht) so there is plenty of ceiling to have this decision overturned.
One of the reasons why we at LoyaltyLobby have made the decision not to cover these ‘error fares’ is that nowadays they often come with a lot of baggage and problems for those who purchased them. This involves loss of time, loss of money, issues such as the ones here and many other things that don’t outweigh the benefit of publishing such fares. In the old days airlines were more generous and the amount of tickets sold was much lower.