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Thai Airways pricing blunder: The plot thickens
"Thai Airways International is planning to offer complimentary tickets and heavily discounted tour packages..." So why aren't they honouring them?

By Will Sturgeon

Published: Friday 02 May 2003

Last week silicon.com reported on a 'too good to be true' online offer from Thai Airways which appeared to be giving away free flights from London to Bangkok. All that customers were asked to pay was the tax.

However, despite sending out confirmation emails, Thai Airways subsequently reneged on the offer, claiming it was an "obvious mistake", which is a legal defence many companies have hidden behind in the past when making similar pricing errors.

However, one silicon.com reader believes this claim is unfounded as he had good grounds to believe there were bargains to be had from Thai Airways.

The following appeared in the Bangkok Post on 24 April and can still be read online: "Thai Airways International is planning to offer complimentary tickets and heavily discounted tour packages to 20,000 travel agents worldwide in a bid to woo back passengers. The move comes amid declining flight occupancy rates and regional fears over the Sars virus."

While the article makes specific mention of these deals being offered to "travel agents", it was enough to convince UK holidaymakers that there were still bargains to be found online. Similarly, while we're told not to believe everything we read in the papers, once silicon.com reader Anthony Booth saw Thai Airways was indeed giving flights away for free, he had no reason to doubt what appeared on its website wasn't a genuine offer.

Booth told silicon.com: "I had planned to take my girlfriend to Bangkok to propose to her. I had received the information [above] which led me to believe that Thai Airways would be offering very good deals, and so I visited their site. To then be told that they were unable to complete the booking is totally unacceptable."

The fact that Thai Airways allowed such a blunder to occur at a time when consumers where entitled to believe there were bargains in store is a problem which the company must now address.

David Naylor, partner at law firm Morrison and Foerster, said: "The company's terms and conditions could be improved for use in the European market, but on the face of it, they do appear to have entered into a binding contract. They almost certainly would have done under European law, in any event."

However, Naylor commented that one of the most difficult areas in internet law at the moment is the question of 'jurisdiction' - in other words, which country's laws apply to the legal issue at hand. In this particular case, Thai Airways could have an argument that the contract should be governed by Thai law, although Naylor pointed out that the current booking terms on Thai's website fail to address this issue.

Naylor also believed that Thai Airways was unlikely to have much joy pleading "obvious mistake".

He said: "First of all, the company appears to have specifically acknowledged the bookings.

"Second, the courts tend to be unwilling to allow sophisticated businesses to escape their contractual obligations by pleading their own 'mistake', and will be difficult to convince if they think any mistake was made negligently.

"Third, given that the company appears to have specifically publicised the fact that heavily discounted flights were being offered, it reduces the scope for it to argue that purchasers should have been aware that the prices quoted were wrong, rather than part of the special discount offer."

The largest problem facing the consumer in such instances is a lack of time and resources to fight the claim in the courts, according to Naylor. "Individuals are unlikely to litigate, and I think that is what a lot of companies rely on to get them through these situations. This is where consumer groups and watchdogs are really getting in on the action."

Naylor advised that companies doing business globally over the internet still have a long way to go in terms of minimising their own legal exposure, at the same time as ensuring that they provide consumer-friendly, legally compliant terms and conditions. "We see a lot of work in this area, and I like it because it's win-win for both parties - companies get to ensure they are trading legally and effectively. At the same time, they reduce the risk of disappointing their customers. This is key on the internet, where competitors are just a click of a button away."

Thai Airways failed to return calls for comment.