Purely from a legal point of view KLM can (at least by Dutch law) revoke the tickets. There is a law to protect companies from precisely such pricing errors. This law does point out that the customer should have been able to know this was a mistake. This does lead to a large grey area though, as the law does not mention specific percentages and/or numerical values. In this case however I feel confident that KLM could easily prove beyond reasonable doubt that the customers could have known that the price was in error. Especially considering that, according to the article, a statement was send out prior to the mistake that the prices would be increased with 40 to 80 NZ$.
Of course revoking the purchase will lead to bad publicity. Therefor more often then not a company will still agree to the original price. This could even lead to some good publicity. For instance through consumer watchdog TV and print media.
KLM claims that a lot of these bookings where made after the error was announced, mainly by industry insiders. If that where indeed to be the case I would revoke those tickets. However, I would keep the tickets purchased prior to the announcement, as well as tickets purchased by people outside the industry valid. Perhaps increase them a bit to cover the taxes and surcharges which after all are mandated (and verifiable!), but no more.
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