United has upped their standard domestic change fee on a non-refundable ticket from $150 to $200 (and has also gone from $250 to $300 as the standard on their international tickets). This applies to tickets purchased from April 18 onward, purchases before then would incur the change fee in effect at time of purchase if making a change. Other airlines have not yet matched this change that I have seen.
When my business travel life started in earnest domestic change fees were generally $50. Sometime in the late 90s they moved to $75, and in 2001 the standard became $100.
When JetBlue started flying their change fee was $25 and flight credits were cancellable — if you weren’t going to take the trip you would cancel your reservation and for that $25 fee the balance would be usable by someone else.
Another change that several airlines have put in place in recent years — US Airways, and then United with the change to Continental’s reservation system March 3 of last year — is that the change fee must be paid separately from the new ticket. If you bought a $500 ticket with a $150 change fee, and applied your credit to purchase a $350 ticket you would still have to pay the change fee rather than using the credit to cover the fee.
United claims the change is ‘to better compensate for the costs incurred when a traveler elects not to fly in a reserved seat.’
I wish that airlines (and business generally) wouldn’t feel the need to justify changes on the basis of costs. In other words, I would prefer they didn’t lie.
Now when someone cancels a ticket at the last minute that’s costly indeed if the seat ultimately goes out empty. Of course sometimes that means a cheap ticket is replaced by a much more expensive last minute ticket in which case the change is actually very profitable to the airline indeed.
But an airline’s opportunity cost is hardly constant, as Matthew points out there’s virtually no cost to the airline to make a change months prior to departure. And yet the exact same fee is applied. Which is especially ironic since not only does United’s computer system allow it to adjust fees on a dynamic basis, that capability for dynamic upselling was one of the primary reasons they adopted the Continental SHARES system rather than the more user-friendly and reliable United system.
Ben predicts that other airlines won’t match the change fee increase, but that United will stick with theirs.
I disagree. I don’t know whether other airlines will match or not but I would expect change fees, at least in competitive markets, to normalize across most airlines. If other airlines don’t match then I would expect a bit of retrenchment (quietly, not admitting defeat) at least on some routes. People do book on the basis of change fees at some margin, or at least airlines think that they do, because it’s not uncommon to see different change fees in different markets for some domestic carriers. In the past I’ve frequently seen lower change fees from Delta in markets where they compete directly against Airtran , e.g. while i haven’t checked to see if this is still the case one would often find lower change fees from Delta where they compete head-on with Airtran since Airtran’s change fee is $75.
Southwest of course currently has no change fees (though on day of departure the only change option is buy up to full fare). Although they have been expected to start adding more fees and rolled out a $75 change fee on some fares although quickly removed it calling the change a ‘mistake’. It didn’t come out of nowhere though and may have just been premature.
I do think United can charge whatever they want as long as it’s disclosed up front. In some ways I’m surprised that restricted tickets allow changes at all, but that’s the equilibrium in the current marketplace. All things equal I’d buy other airline tickets provided the equilibrium doesn’t change with other airlines matching the higher fees. And indeed, higher change fees on American would make buying up to their Choice Essential fares for $68 all that much more attractive, since those incur no change fees.
For me, a $200 change fee simply means that if I’m changing the return portion of a trip it’ll often be cheaper just to throw away that return and buy a new one-way ticket (which itself might incorporate a throwaway to save money).
UA and it’s board are out of control. What a shame. When this market turns around, everyone is going to remember this as another ‘icing’ on the cake.
My YTD miles flown on United = 0. For reference, I’m a UA flyer since ’88 and MM’er.
Because of this post, I am booking 4 tickets for my family on Southwest instead of UA for a July 4th trip – even though I have $600 in UA vouchers. There’s a chance we have to change the flight, and the prospect of $800 in change fees is enough to tip the balance.
I’m another UA MM who often books domestic travel on Southwest because of their “no change fee” policy (and de facto fully refundable Rapid Rewards points bookings).
Gary, when airlines first introduced non-refundable fares in the 1980’s, tickets were truly “use it or lose it”. There was a lot of abuse (for example, people got doctor’s letters to secure refunds). In the early 90’s, the current system was introduced. Originally the change fee was $25, then $35, 50, 75, 100….up, up and away!!
For most of my travel, I won’t need to change my flights (I have twice in the past 30 trips or so), and unless I know there will be a good chance that I will need to change my ticket, I don’t worry about change fees. If I were to never buy tickets on United now, I would end up losing money by buying more expensive tickets that I don’t need to change.
I do remember $25 change fees… and even advertising of tickets for resale in the newspaper!
@Chris: Let me know if you’re not going to use that $600 voucher…seriously.
Sorry Matthew – I’ll likely end up using them myself or giving them to my parents for a visit.
I agree it’s hard to imagine an eqm with the legacy change fees differing substantially.
BTW – WN doesn’t refund EBCI if you cancel, so not totally free. But they will carry it forward if you change the ticket.
“I wish that airlines (and business generally) wouldn’t feel the need to justify changes on the basis of costs. In other words, I would prefer they didn’t lie.”
Devaluations hit our wallets. The lies insult our intelligence.
Why does anyone at any company believe that telling customers obvious lies is good for business? Do they think their bosses believe the cover story?
As a UA Premier 1K, I find this change disturbing but, candidly, the previous $150 change fee pretty much meant I was going to have to eat most of the cost of changing my domestic leisure tickets anyway. $200 just means I’m going to eat almost all the cost.
Fortunately, like most folks, I rarely change my leisure tickets. But stuff DOES happen. Earlier this year, my wife needed a fairly minor “emergency” surgical procedure. I wasn’t going to high-tail it out of town. I actually sent UA a copy of her hospital admission papers, but they didn’t waive the fee for me.
Emergency changes are bad for everyone (perhaps UA couldn’t sell my ticket the day before travel), but I do wonder about advance changes. Like say you buy tickets for a long weekend in Florida a couple of months in advance and you’re then invited to a social event you’d really like to attend. If it’s $400 to change the tickets for you and your spouse, you’re likely to sent your regrets (even though you’d really prefer to attend). But wouldn’t it be BRILLIANT for the airline to offer a 60-day-in-advance cancellation penalty of only, say, $50 — which would likely convince me in this situation to cancel my ticket, which the airline could likely re-sell for more money? And why not raise that fee to $75 for cancellations only 30 days out, and $150 for 2-week-in-advance cancellations.
Seems like an enormous win-win for everyone. Right?
UA management seems intent on pushing more advance purchase leisure travel to WN and perhaps to a lesser extent to AS. Maybe that is the strategy – to downsize so that it can fill more planes with high rev business customers.
The only problem with this strategy is that UA has so thoroughly gutted its customer service that biz travelers are fleeing to other carriers in droves. I don’t see a happy ending.
No doubt UA also figures that it can keep elites loyal with perks like free baggage, E+, etc. But the same elites are also more likely to get hit with change fees due to last minute business trip, etc.
Of course this could just be a prelude of a rollout of UA’s version of Choice Essential. CO computer system seems well designed to handle add-on fees.
@iahphx Actually, UA does it the other way around. There is a “close-in booking fee” for award tickets booked less than 21 days in advance. Ouch!
I have had emergencies where I had to change plans at the last minute and it hurt (financially).
I do think it’s a great idea to make the change fees depending on the amount of time left prior to flight, as that would help others who have changes early because yes, the airline will resell that seat. But all of my changes would be at the last minute on the day of travel, or maybe the day before, so it won’t help me.
Don’t throwaway segments, that not recommended.
There’s absolutely no reason why tickets cannot be transferable even taking into consideration security. Instead airlines have constructed this inefficiency to create revenue. They could even open up a “seat swap” (customer-to-customer resell) and charge for the privilege of successful transactions. This is exactly what sporting events / arenas do to combat ticket scalping. Obviously airlines have complete power here, but still manage to lose money.
I just booked 2 tickets with rewards and 2 tickets at full revenue with UA, internationally. I found out that I could extend my trip by a day and jumped at the chance. I went online and changed the two tickets that were booked with rewards and it cost me $150. Then I proceeded to try and change the two revenue tickets. I was STUNNED when I 1) couldn’t do it online and had to call and 2) she said that will be $600 for the two tickets. WHA?? for the 4 tickets it would be $750 to spend an extra day, same flight, same time, 4 months away. So I said, Ill pass. Can you please change the two tickets that are under my kids names. Panicking that I would have a 10 and 12 year old in Holland a day longer than I was there. She said she would but it would still be $150 to change it back. Back to where I started. All of this in a span of 8 minutes. Ridiculous. 4 clicks of a mouse key and its $150. Im so turned off by this that I am considering not flying United again. They aren’t the only plane in the sky.