American Airlines Beats United’s New Change Fee Policy, Improves Basic Economy Fares

The pandemic has forced airlines to offer more flexible tickets, continually waiving change fees so that customers – facing greater uncertainty than ever – would be willing to buy tickets. Southwest Airlines didn’t have change fees (or baggage fees) to start with. United Airlines declared their domestic tickets would no longer have change fees either except for Basic Economy tickets and flights to and from Guam.

Change fees no longer have the same importance they once did for segmenting business travelers from leisure travelers, leaving aside that right now there are almost no business travelers. Segmentation has fallen to Basic Economy fares, and this change at United made the gulf between Basic and Standard economy even wider.

United’s move clearly puts pressure on other airlines to match, and in a little less than 24 hours American Airlines has done so and indeed gone a little bit further.

3 Changes That Go Farther Than What United Announced Yesterday

United’s move to end change fees on most domestic tickets rocked the travel world when it was announced. It led to tremendous speculation about who would follow. American didn’t just follow, they exceeded with an even more generous policy.

  • Waiving change fees immediately (excluding Basic Economy fares), like United, but extending the policy to include Canada, Mexico, and the Caribbean as well.

  • American will give a travel voucher to customers who apply their old ticket to buy one that’s less expensive. United will not.

  • Eliminating fees for standby travel, like United, but doing it starting October 1 – instead of waiting until January 1.

Furthermore American is extending its change fee waiver on all new tickets (including international and basic economy) through purchases made by the end of the year. This includes AAdvantage award tickets.

Restoring Benefits To Basic Economy, But No Longer Offer Elite Credit To These Fares

American is also making Basic Economy more flexible. The change fee waiver won’t apply, but while United – which has the most draconian Basic Economy, banning full-sized carry on bags – is widening the difference between basic and regular economy, American is willing to let customers spend more money for just about anything when flying on a basic economy ticket.

Starting October 1 American will permit Basic Economy customers to buy upgrades, priority boarding, Main Cabin Extra seats, and same day confirmed changes.

Furthermore, “later this fall” elite benefits will be restored to Basic Economy fares:

  • They will become upgrade-eligible
  • Able to access elite seating
  • Eligible for same day confirmed change benefits

Starting next year though Basic Economy won’t count towards earning elite status. This makes sense – decide what you want to count as a good customer (not those buying basic economy regularly) but treat that customers well every time they fly.

American’s Senior Vice President Vasu Raja says they need to offer the product the customers they have today want to buy rather than waiting for the old days to return. Being willing to sell anything a customer wants to buy makes sense.

And treating a loyal customer well each and every time makes sense too – when they buy that expensive ticket for work, or the cheap one on the weekend with their family – at a time when winning each and every customer really matters. It didn’t matter as much when customers were largely replaceable, but there are no longer enough passengers to go around.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Don’t miss the removal of EQD and EQM from Basic Economy. That’s going to make it tough on corporate business travelers to resist BE.

  2. None of this is helpful for awards! Why? Becos saver awards Rarely exists and it costs 50,000 miles for one way coach within domestic and 200,000 miles for one way coach to Asia .

  3. I have an AA flight credit from a cancelled flight in 2019, does this mean that I gain the value back without having to pay the $200 change fee? Or does this new policy not apply to previous flights?

  4. As I read this, American ain’t doing jack for those booking award travel. Compare:

    United: If you cancel or change award travel (including international and partner awards), there is zero fee to redeposit your miles, as long as you do so 30 days before the flight.

    American: If you cancel your award flight, you can CHANGE the flight without a change fee…with restrictions (must be ticketed by Sep 30th for travel THROUGH THE END OF THIS YEAR; then you’ll need to do the travel by end of 2021). This only applies to domestic, Canada, Mexico, Caribbean, PR/USVI – not to international flights. And don’t forget to use it by then end of 2021or lose it. If you just want to cancel an award trip and simply redeposit the miles (so you can use them later) there’s a fee.

    Seems to me, United’s new policy is way much more generous. No?

  5. For those who earned elite status from a mix of business travel and leisure travel (buying basic economy when doing so), hitting gold just became a lot tougher / more expensive. I envision the price gap between basic and regular economy is about to go up.

  6. On American airlines for an international flight do they charge for one suitcase (not carryon) to go in the hold or not?

  7. @Sherab – we must not be looking at the same awards or maybe I’m just a lot more flexible than you are. I rarely have trouble booking domestic saver awards and have booked some pretty incredible websaver fares recently (86,000 r/t in business class to Germany and 70,000 r/t Premium Economy to Lisbon) for 2021 travel.

    Easy to bash AA but IMHO (and supported by statistics) they have the best overall redemption rate for award tickets. Now if you want painful check some of the Delta international awards where I’ve seen tickets for 640,000 r/t business class to Europe.

    Of course it isn’t trendy to bash DL but you like to pile on like others on AA.

  8. @Stef – I don’t know about 2019 but I have 3 credits from cancelled flights this year. All are under $200 so I mentally dismissed them since the change fee was more than the value. However, I got a prompt on my AA home page to check them and sure enough I realized no change fee right now. I have around $325 total in credits I intend to use.

    However, the flight has to be booked by 9/30 and travel completed by 12/31 this year to use the credits with no fee. I’m not sure if the new policy changes any of that (it wasn’t updated on their website today) but I intend to call the Platinum line and ask mid Sept. Worst case I’ll fly somewhere warmer for a long weekend in early December but would prefer to use them in 2021 since I’d use for a casino trip and don’t need any more points this year so keeping my powder dry until January 2021.

  9. Has anyone seen any info on whether this will also apply to AA Vacations packages? At present, one can get a waiver of change fees by purchasing Pre-Departute Protection ($69/person domestic) *and* having a hotel (car alone won’t work). And one can get a cash refund.
    It would be great if they extended this fee removal here. True, I’d have to keep as a credit, but we buy enough of these that this would not be a problem.

    Cheers.

  10. My husband and I just applied a united airlines travel voucher to new tickets that were less expensive and lost money in the transaction. United should be able to give us a voucher for those funds – American is doing it. Perhaps we’ll need to consider which airline we use moving forward.

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