balogoIf you booked a British Airways ticket from North America to India between 6:30 p.m. and 8:30 p.m. last Friday evening, you already know the bad news: Your trip has been canceled.

But this morning, there’s some good news. The airline is planning to compensate customers who were affected by this fare error, and at least one online travel agency is offering more than just an apology.

British Airways customers began receiving the following notices yesterday:

On Friday October 2, 2009, British Airways updated its air fares between North America and India.

Unfortunately there was an error and the fares that resulted were incorrect. This error was corrected within a few hours.

Due to the error, British Airways is unable to honour your booking.

If your credit card was charged, British Airways will refund in full the cost of your ticket and apologies for any inconvenience.

That pretty much sums up the problem. I have a few more details here.

The incident triggered something of an ethics debate. I argued that occasional passengers who did not see the ridiculously low $40 base fare, and didn’t know any better, were the real victims of this fare error. But those who were aware that this was a likely mistake and took advantage of it by buying dozens of tickets and betting they could pressure BA to honor them — I believe their behavior was inexcusable and immoral.

So I have mixed feelings about the decision to compensate affected passengers. Some deserve it, some don’t. (And I’m not sure if it will be enough for people who had already made their vacation plans, only to find their flights canceled.)

A British Airways spokesman on Tuesday evening said the airline will make amends. “We are going to try and resolve this with some kind of compensation to those affected,” he told me. “Watch this space.”

Meanwhile, Orbitz last night began sending vouchers to those affected by the fare error. “As a gesture of gratitude, Orbitz will offer impacted customers $100 off next hotel or package booking, good for 3 night stay minimum,” a spokesman told me.

Here are the exact terms:

Book a qualifying hotel or flight + hotel package between October 7, 2009, and March 31, 2010, for 3 or more nights for travel between October 7, 2009, and December 31, 2010, via Orbitz and instantly receive $100 off your booking through the use of the promotion code. Limit one discount per hotel room and one promotion code per booking. Discounts are not redeemable for cash for any reason.

I have checked with other online agencies to see what their policies are, and will update this post when I have that information.

We still don’t know how many travelers were affected by this fat-finger fare. I’ve asked BA numerous times, and it says it is still trying to determine the exact number. Orbitz is said to have sent more than 1,000 of these offers to customers with confirmed tickets and requested reservations.

This is an unfortunate situation, and I might be tempted to end this post by saying that if a fare looks too good to be true, it probably is. But for those of you who paid more than $500 for these tickets, after taxes and fees, that wouldn’t have helped.

To be honest, I’m not sure if this could have been avoided at all.

One final note: Many of you have pointed out that if the tables were turned — if a passenger had made an honest mistake while booking a ticket — then BA wouldn’t have been as lenient. In fact, it would have imposed a change fee at best or made the customer pay for an unusable ticket, at worst. This is completely true. It is also utterly unfair.

Update (10 a.m.) Priceline plans no compensation. “It was a BA pricing error,” a spokesman tells me. “And we would, of course, cancel any hotel rooms booked along with the tix.”

Update (11 a.m.) From Travelocity: “We still haven’t decided what we’re going to do.”

Update (5 p.m.) Here’s what Orbitz has sent to customers who made a reservation request and weren’t ticketed –

Dear Orbitz Customer,

We’re contacting you about a British Airways flight to India that you booked on Orbitz on October 2, 2009.

British Airways canceled the reservation, after discovering it had provided an invalid fare. We are issuing a refund that should post to your account within 21 days. Any insurance policies will be refunded too.

If you need a refund for a hotel, attraction or service that was part of your reservation — or just have further questions — please call 1-888-656-4546. If you are outside of the US, please call 001-312-416-0018.

We apologize for the inconvenience, and you should expect to receive an e-mail with details about a discount for future travel on Orbitz.

We look forward to assisting with your travel plans.

Sincerely,

Orbitz Customer Care

Update (5:30 p.m.) Here’s the letter BA has sent to travel agents:

On Friday October 2, 2009, an error occurred during the updating of British Airways fares between North America and India. In a two-hour time frame, World Traveller (economy class) fares from all cities in the US to all cities in India were displayed on reservation systems incorrectly. (At $40 to $100 round-trip, excluding government taxes, fees, and surcharges) BA immediately moved to correct these fares. However, because the system update is not immediate, these incorrect fares were available for approximately two hours in some reservations systems. As a result many bookings were made using the incorrect fares.

As the fares were so clearly below the normal fare levels, British Airways is unable to honor these bookings. We have cancelled all affected bookings made during this two-hour window, and will make a full refund for any paid for and issued ticket. (In addition, we will refund any fees associated with the rebooking of other airline segments that may have been part of the same reservation and issued on BA stock)

We ask that you please take the necessary steps to contact any of your clients booked under these fares and advise them of the error and the cancellation of their booking. The cancelled bookings have been queued back through your GDS system for your action.

You will be able to process refunds on any of these affected tickets issued on BA stock yourself, or BA can refund for you within the usual 7 day turnover time. Debit memos will not be issued on any affected non-refundable tickets that may have been issued.

We sincerely apologize for this error and the inconvenience it has caused both you and your clients.

Update: (Thursday, 6 p.m.) Travelocity has matched Orbitz’ offer –

As you know, BA canceled those reservations and will refund the passengers. We’re still waiting to hear if BA is going to offer these passengers additional compensation. In the meantime, in the spirit of the Travelocity Guarantee, we have decided to offer our customers who booked one of these fares a $100 promo code that can be redeemed the next time they book a GoodBuy Hotel or vacation package (2 night minimum) with us. We’ll be sending those passengers an email shortly.

(Photo: mattingham/Flickr Creative Commons)