American is Still Working Through Whether to Abolish Reservation Holds in Favor of 24 Hour Free Cancel

Yesterday I wrote that American planned to eliminate 24 hour reservation holds in favor of 24 hour free cancellation.

Initially it was reported on Flyertalk based on conversations with reservation agents. An American Airlines employee, who has a reputation for accuracy, confirmed the news. I spoke to an American agent who said this as well.

I reached out to American for comment, and for clarification of how such a policy would work for bookings made within 7 days of travel (US airlines aren’t required to offer refunds within 7 days, but other airlines do it) and whether it would be a true 24 hour refund (as required) or ‘until midnight the following day’ (as is more generous but also more standard).

An American spokesman shares,

There is not a final decision on this. Moving to refunds instead of a hold policy is something we are looking at, but it has not been decided.

There are some issues and implications we need to sort through before we do anything – which may be nothing at all.

There are some emails and meetings about all of this, and it looks like someone was eager to share the news.

If something officially changes, we will let customers know in advance. Nothing has been decided as I write this at 7:32am on Monday.

So the change to 24 hour refunds rather than 24 hour holds is a pending possibility, and seems likely to me, but isn’t final. And there aren’t yet answers to the questions I was asking.

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, 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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  1. If American does a “24 hour refund policy”, then their entire tax reporting structure has to change (they have to report the income, the refund, and the explanation of such a large return rate to “avoid the tax”). It would be a mess, thus they shouldn’t even consider it. What American CAN do is eliminate award reservations from a 7 day hold and return it back to a 24 hour hold. Having said that, they can lower Asia 2 first class awards from the US to 80K from 110K as well (when they get rid of all of those US Airway elites that shouldn’t even be in the AAdvantage program to begin with).

  2. Seems like a race to the bottom with all of these loyalty programs. As a 10+ year ExecPLT beginning to wonder what is the point. Cutting First class bag allowances (would love to know the final cost savings number vs. the incremental cost of annoying your premium passengers); removing option to hold tickets; heck even the EXP desk is a disaster these days with long hold times and inexperienced agents. I had an agent at the JFK Flagship check in recently beg me to write a letter into AA b/c of the disaster that is going on at the EXP desk. Apparently they have to call in to the same number.

    Hard to see what is the point of being brand loyal much longer as the entire experience across most of the major US airlines has become completely commoditized. Plus one can rarely redeem points for a family / group at anymore at anything other than oddball times. Forget a trip to Europe.. Let alone LA or SF in Biz or First. And frankly JetBlue’s MINT is cheaper and has friendlier staff if you’re paying for a transcon trip.

    Guess wAAit until another downturn and we’ll see when they want to show the love again. What an non-innovative industry. It’s all marketing spend and a follow the leader business strategy.

  3. I wonder what it would cost the company to offer BOTH policies. Not a heck of a lot, I think. Right up there with the cost of a pack of nuts in coach. And it would engender a lot of good will. And be the right thing to do.

  4. Melissa: well, other airlines do it and don’t seem to have any tax issues.

  5. They need to figure out which is less convenient to the customer so they can be sure to choose that.

  6. It’s really an “opt in” or “opt out” situation. I like the 24-hr hold, but AA makes more money collecting the payments first. People tend to forget.

  7. All the hold vs purchase/refund does is increase confusion on the part of the customer. I’d agree that being in line with the other legacy carriers in the US would be good for customer service for AA. And as for AA’s take on it I’d think they’d prefer to having booked a ticket vs putting a seat/fare on hold, at least the booked ticket is a sale. I’d be interested to see how often someone uses the hold option and how often someone tries to refund in 24 hours.

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