American Airlines’ Terrible Systems And Refund Policy by Whitney Tilson

Summary

I owned American Airlines stock profitably from late 2013 through mid-2015.

With the pullback in the stock since I sold, I considered repurchasing it, but have been deterred from doing so by a series of bad experiences with the company’s systems and refund policy in the past few weeks.

When a company can’t get even the basics right, it really makes me question management’s competence.

I owned American Airlines (NASDAQ:AAL) stock profitably from late 2013 through mid-2015. With the pullback in the stock since I sold, I considered repurchasing it, but have been deterred from doing so by a series of bad experiences in the past few weeks – a cascading comedy of errors – but not the ones you might expect: delayed/cancelled flights, lousy food (or none at all), lost bags, rude gate agents or flight attendants, etc. That story could be written about any airline – and I’d be the last person to write it, as a shareholder of oft-complained-about Spirit Airlines (NASDAQ:SAVE) (see my three articles about Spirit here, here and here).

American Airlines

No, this article is about various systemic and policy failures I’ve encountered with American Airlines that have both irritated me and made me question the level of basic competence within the organization, which is shocking given that this is the world’s largest airline with more than $40 billion in revenue.

(Please understand that, in writing this article, I’m not saying that the minor irritations I describe below are in any way analogous to the travel nightmares friends have experienced, which have resulted in hours or even days wasted, missing weddings, etc. But I fly often, on at least a dozen different airlines every year, and my recent experiences with American are definitely not the norm so I thought it was worth writing about them. Maybe someone at the company will read this article and fix these silly problems.)

A Time-Consuming, Multi-Step Process to Cancel a Reservation and Get a Refund

The most irritating and customer unfriendly policy I discovered was when I tried to cancel a reservation, which every airline is legally required to offer, within 24 hours of booking, for any flight more than seven days out, as long as it was booked directly with the airline (which mine was).

I can’t speak for every airline, but I know that, for the first 24 hours after booking, Delta (NYSE:DAL) allows a customer to cancel a reservation and automatically receive a full refund via a simple process on its web site. So on Saturday morning, when I decided to cancel an American flight I’d booked the night before, I went to the company’s website, logged in, and pulled up the reservation. But while there were options to do various things like change the flights, as much as I searched and searched (I even tried Googling it), I couldn’t find the Cancel Flights option.

After wasting 5-10 minutes, I called American’s 800 number and, after getting through to someone, learned that American doesn’t allow you to cancel your reservation online – they force you to waste your time (and theirs) with a call – how irritating!

But wait, it gets worse! The agent said she could cancel the reservation, but if I wanted my money back, I had to “request a refund” by going to https://prefunds.aa.com/refunds and entering in the “document number” (which is not the confirmation number; rather, the ticket number) and passenger last name – even more irritating!

But wait, it gets worse! After I entered this information, rather than accepting my refund request, an error page appeared which said, “Our records indicate that this request cannot be automated. Click Continue below to have this request reviewed by a Refund Specialist.” (Maybe this happened because I was buying a ticket for my cousin, so the payment was in my name, but the ticket was in his.)

This process became so surreal that I wasn’t sure anyone would believe me, so I took screenshots of each page. Here’s the initial error page:

American Airlines, AAL, Whitney Tilson

Then it took me to a page where I had to enter all of my cousin’s contact information – even more irritating! Here’s the page:

American Airlines, AAL, Whitney Tilson

American’s Website Won’t Accept “Special Characters”

As I was going through the process of entering my cousin’s address, as well as entering my middle initial, I discovered that American’s website won’t accept periods and commas – which is insane.

For example, the web page wouldn’t accept my cousin’s address: “1661 Pearl St., Apt. 214”, giving me the error message: “Please remove any special characters”:

American Airlines, AAL, Whitney Tilson

I don’t consider a period or a comma as special characters, but after a bit of trial and error, I spelled out “Street” and moved “Apt. 214” to the Address 2 box. But that didn’t work either:

American Airlines, AAL, Whitney Tilson

It was only when I spelled out “Apartment” that it finally accepted the information and confirmed my submission – albeit with an obnoxious warning:

American Airlines, AAL, Whitney Tilson

OK, maybe I understand this “special character” bug on these customer service web pages, in which it’s perhaps in American’s interest to harass its customers so they give up and don’t file refund claims, but surely such a bug couldn’t exist on its booking website, could it?

It does. When I went to book another ticket, when I was entering my full name in the First Name, Middle Initial and Last Name boxes, the web site wouldn’t accept “R.” for my middle name – I had to remove the period:

American Airlines, AAL, Whitney Tilson

Changing Prices in the Middle of the Booking Process

As I was in the last stages of booking the flight for my cousin on Friday, American’s website suddenly went to an error page and I had to start again, which was a huge waste of time as I had to search for the flights and manually enter all of my cousin’s information again (on a slow internet connection). Worse yet, the price of the ticket had risen from $255 to $276 – GRRRR!

I understand that there are a limited number of seats at any given price on a flight and that, if a customer doesn’t book a ticket immediately, that the price can change. But there was no delay in this case: I had selected the flight and fare I wanted and was simply entering in basic information and doing seat selection when I was kicked out (and then quoted a higher price). I’ve heard from friends that this can happen with other airlines, but I’ve never experienced it. To me, it would be like going into a supermarket, picking a product based, in part, on the price and then getting to the checkout and learning that the store had jacked up the price.

An Irritating Bug in American’s App

My final negative experience was

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