In rapid-fire fashion, over the last two days, the “Big 3” U.S. international airlines announced an end to change fees for domestic travel. They also made it easier to stand by for a different flight and eliminated the fees. It sounds great, but airlines have a nasty habit of giving with one hand and taking away more with the other. Southwest Airlines, which is the U.S. airline carrying the most total system passengers, never charged for ticket changes or baggage.
United started the ball rolling on August 30. That is somewhat unusual because United and American have a habit of following Delta’s lead.
United is “permanently” (i.e., until it changes its mind) eliminating change fees on all standard economy and premium cabin tickets for travel within the U.S.,
Puerto Rico and the U.S. Virgin Islands, effective immediately. Then starting on January 1, 2021, any United customer can fly standby for free on a flight departing the day of their travel regardless of the type of ticket or class of service, a first among U.S. carriers, while MileagePlus Premier members can confirm a seat on a different flight on the same day with the same departure and arrival cities as their original ticket if a seat in the same ticket fare class is available.
United also is extending a broad waiver of change fees, including for international travel, through Dec. 31. Customers who pay the lowest fares, called “basic economy,” can also change tickets free because of the extended waiver announced Sunday.
You can hear United CEO Scott Kirby, an American Airlines defector, explain it in this video.
Delta Air Lines
Not to be out done by the likes of United, on August 31, Delta announced its new policy. Eliminating change fees is effective immediately for tickets purchased for travel within the domestic U.S., Puerto Rico and U.S. Virgin Islands in Delta’s First Class, Delta Premium Select, Delta Comfort+ and Main Cabin, with the exception of Basic Economy tickets.
Additionally, Delta will extend its waiver on change fees for newly purchased flights, including international flights and Basic Economy fares, through the end of the year and will extend its expiration on travel credits through December 2022 for tickets booked before April 17, 2020.
Hot on the heels of Delta’s announcement, today American joined the party. American saved the best for last and expanded on the policies revealed by United and Delta.
American matched the elimination of change fees but expanded the area covered to include Canada, Mexico and all of the Caribbean. American
- No more change fees. Change fees for all flights between U.S. states, Canada, Mexico, Caribbean, Puerto Rico, the U.S. Virgin Islands flying on Premium Cabin fares and most Main Cabin fares will be eliminated.
- Standby for free. All customers (not just top tier elites) will have the ability to fly standby on earlier flights for the same destination on the same day at no charge starting Oct. 1, 2020.
- Basic Economy Enhancements. Starting October 1, 2020, Basic Economy fares will come with the ability to tailor your travel experience including upgrades, Preferred and Main Cabin Extra seats, priority boarding and same-day flight changes.
- AAdvantage® benefits apply no matter the fare. Later this Fall, AAdvantage® elite members will be able to use their current travel benefits such as complimentary upgrades on all tickets, including Basic Economy fares. On January 1, 2021, elite members will lose the one-half credit for miles flown and fare paid on Basic Economy tickets.
The ability of American elite frequent flyers to now receive all applicable travel benefits when flying on a Basic Economy fare is a big improvement. Not being able to get a first-class upgrade or to select preferred seats in coach was the reason I never flew on slight cheaper Basic Economy fares. I gladly trade that for losing counting half of mileage flown and dollars paid for elite qualification credit.
What Do These Changes Mean?
Eliminating fees for ticket changes and standing by comes as airlines try desperately to lure people back to flying despite the ongoing coronavirus pandemic. US air travel has recovered modestly since April, but passenger traffic remains down sharply from a year ago.
Airlines are starving for passengers, but the pandemic is also causing serious financial problems. While these changes may generate some increased demand for domestic air travel, they will probably hurt airlines financially.
American, Delta and United charge $200 for changing domestic tickets and $75 for standing by for an earlier flight. Eliminating those fees eliminates revenue. And fees for changing flights and standing by would seem to be pure profit because changing or canceling tickets with a few keystrokes costs the airlines little.
Last year change fees collected for United, Delta, and American amounted to $625 million, $830 million and $819 million, respectively according to Transportation Department figures. Since they were initiated in 2008- 2009, the Big 3 airlines have collected billions of dollars in fees for changing tickets and standing by.
Airlines aren’t charities. There is more than likely another shoe to drop that won’t be as customer friendly. What it is remains to be seen.
The pandemic has affected business travel the most. Business travelers and generally less price sensitive compared to leisure travelers. So charging higher fares may not be an option in the immediate future.
These policy changes may make airlines appear to be kinder, friendlier, and more worthy of a second round of taxpayer bailouts. Airlines will try new ways to add even more seats to existing aircraft. Service cutbacks in catering on board and in lounges will likely continue long after the pandemic. Airlines will increase other fees and cut costs on other items (like checked bags, food, headphones) and find new ways to charge passengers for things included in ticket prices today.
The recent announcements that American, Delta, and United are eliminating fees for changing tickets and standing by for earlier flights is a welcome improvement for the majority of passengers. Members of the upper levels of the frequent flyer program have these benefits already. So for them (me) it can be viewed as a devaluation of their status. I’m waiting for the presently unknown but inevitable claw back of the revenue these changes abolish.