By now, you’ve probably heard that Alaska, American, Delta, Hawaiian, and United will eliminate change fees on most nonrefundable tickets next year. That means a policy currently in force due to COVID-19 worries will continue indefinitely. United says “forever,” but you know about airline promises. This sounds like a big deal, but it’s more likely a “meh.” The airlines may be giving up on those fees, but they’ll get it back on ticket prices. Just watch.
Excessive ticket change fees has been a known travelers’ pain point for years, so at first blush, the announcement sounds like a win for consumers. It may be, but maybe not so much. A writer I know was considering a headline along the lines of, “It took a pandemic to get the airlines to stop s----ing their passengers.” Although eye-catching, that’s not really accurate. They’ll still continue to s---w you; they’ll just change the way they do it.
The five airlines differ a bit in their approach:
-- Alaska, American, Delta, and United will eliminate ticket-change fees for all domestic fares except for their lowest, “basic” (or equivalent) fare options.
-- Hawaiian will drop change fees on even its lowest-fare tickets and extend the cuts to include its entire route structure, including transpacific flights.
-- American will also drop change fees on tickets to close-in international destinations — Canada and nearby beach centers.
In all cases, if you cancel a flight, you won’t get a refund; instead, you get a voucher valid for a future ticket purchase, usually limited to one year. And when you use the voucher, you apply it to what is then the going fare, not your original fare. A big difference between American and United is that United’s vouchers are limited to a single future ticket buy: If you apply it toward a ticket with a dollar value less than the voucher value, United keeps the difference. But with American, if you apply the voucher toward a cheaper ticket you can retain the difference to apply toward another ticket. The other lines have not yet announced details on how they will treat voucher use.
American will also introduce a no-fee same-day standby policy. Other lines haven’t copied, but they may. This is truly a benefit, at least for some travelers.
Allegiant, Frontier, and Spirit probably won’t copy the five lines, and Southwest doesn’t assess change fees. That leaves JetBlue yet to be heard from: You’d expect it to copy, but as of this writing, it has not announced any changes to its change fee policies.
Other than Hawaiian, the other lines do not plan to drop ticket change fees on long-haul international travel. Unfortunately, that’s where you find the most outrageous fees — up to $800 in some cases. I don’t look for international fees to change in the near future.
The future domestic fare outlook is cloudy. If you can accept the restrictions on those rock-bottom “basic” or “saver” fares, you’ll continue to see some very low prices. But you have to accept:
-- Complete nonrefundability — use it or lose it.
-- Limitations on baggage, seat assignments, upgrades, and frequent flyer earnings.
Trip-cancellation insurance can protect you from some nonrefundability risks. But the other limitations make those rock-bottom fares pretty difficult to use for many travelers. Industry mavens say that the big three lines’ take from change fees is $500 to $800 million a year, each, and they’ll obviously recoup loss of that income stream by raising fares and fees on their other ticket options.
So, if you can cope with limited checked baggage and live with total nonrefundability, you’ll find that base-economy fares will remain very low. And you can offset total nonrefundability risk by buying bare-bones travel cancellation insurance. But if you want to check bags, select seats in advance, and maybe upgrade to an extra-legroom seats, you’ll pay an increased premium over the base fare.