American Airlines’ Terrible Systems And Refund Policy by Whitney Tilson
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).
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:
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’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”:
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:
It was only when I spelled out “Apartment” that it finally accepted the information and confirmed my submission – albeit with an obnoxious warning:
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:
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 three weeks ago, as I tried to check in the day before my flight from Zurich to JFK using the American Airlines Android app on my phone. The app is quite rudimentary (for example, if you want to book a flight, it doesn’t do so within the app; instead, it opens your browser and connects you to mobile.aa.com) and I saw this firsthand when I tried to check in. It asked for my birth date, but instead of letting me type it in or select the month, day and year from drop-down menus, a monthly calendar popped up and I discovered to my great chagrin that the only way to enter my birthday was to click backward from this month to the month I was born nearly 50 years ago, which would have required nearly 600 clicks (!), so I abandoned the effort in frustration (and then had to run to my hotel to print my boarding pass, which almost caused me to miss my train to the airport).
To summarize, American Airlines, the world’s largest airline:
- Makes it as difficult as possible for customers to get a legally-mandated, within-24-hours-of-booking refund by requiring both a phone call and then filing an application (as if they’re doing you a favor).
- Has a web site that is so primitive that it won’t accept periods (and commas?) when customers enter their addresses and middle initials.
- Doesn’t lock in the price it quotes you while you’re booking a reservation on its website, meaning that when you get to the checkout, you can get an error message requiring you to go through the entire booking process again and charging you a higher fare. And:
- Has a terrible bug in its Android app that makes it nearly impossible to check in for a flight.
When a company can’t get even the basics right, it really makes me question management’s competence – and has, so far, deterred me from reestablishing a position in the stock.
Disclosure: I am/we are long JETBLUE, SPIRIT AIRLINES.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Funds managed by Whitney Tilson have no position in American Airlines’ stock, but do own stock in JetBlue and Spirit Airlines.