Why Airlines Will Have to Keep Waiving Change Fees For The Foreseeable Future

Major U.S. airlines have waived change fees for new ticket purchases, to encourage customers to spend money in a world of uncertainty. You won’t be penalized for changing plans if you buy a new ticket now and need to change it later – you’ll retain a travel credit for future purchases with the airline.

They’ve been extending the policy little-by-little, ostensibly because it might only be necessary for a short time. It won’t be. These change fee waivers on ticket purchases are going to need to continue for many months, perhaps through the end of the year. That’s not just for the convenience of passengers, but so that people will be willing to buy tickets at all.

Here’s a sampling of current waiver policies on new ticket purchases:

  • United: “For tickets issued March 3 through April 30, 2020, customers will be permitted to change free of charge to a flight of equal or lesser value for travel up to 12 months from the original ticket issue date.”

  • Delta: “Tickets purchased between March 1 and May 31, 2020 can be changed without a change fee for up to a year from the date you purchased it.”

  • American: “Buy a new trip March 1 – May 31, 2020, for all future travel, you can also change it a later date without change fees.”

Plans to end these policies in April or May are disconnected from the reality of how a return to normalcy will occur. The major plans for what to do next as restrictions on movement and travel begin to lift all revolve around surveillance of some kind, and targeted quarantines. No one will feel safe buying airline tickets, because they may be ordered to quarantine for 14 days at a moment’s notice.

All of them then imagine a phase two, which relaxes — but does not end — social distancing while implementing testing and surveillance on a mass scale. This is where you must begin imagining the almost unimaginable.

The CAP and Harvard plans both foresee a digital pandemic surveillance state in which virtually every American downloads an app to their phone that geotracks their movements, so if they come into contact with anyone who later is found to have Covid-19, they can be alerted, and a period of social quarantine can begin. Similarly, people would scan QR codes when boarding mass transit, or entering other high-risk public areas. And GPS tracking could be used to enforce quarantine on those who test positive with the disease, as is being done in Taiwan.

…The alternative to mass surveillance is mass testing. Romer’s proposal is to deploy testing on a scale no one else is contemplating — 22 million tests per day — so that the entire country is being tested every 14 days, and anyone who tests positive can be quickly quarantined.

And all of this is separate from the possibility of a second wave of the virus with the potential to overwhelm health resources again, where broad-based stay-at-home orders are once again put into place (although hopefully we’ll have scaled up resources and have better treatments that not only improve patient outcomes but shorten hospital stays).

Regardless of path towards recovery we follow, consumers are going to face tremendous uncertainty that will make planning any sort of travel risky. And consumers are likely to remain risk averse in any case. That will discourage travel bookings until the last minute.

If airlines want to encourage ticket sales, they’re going to have to either:

  1. Continue to waive change fees for the foreseeable future, or

  2. Keep fares low close to departure, because that’s when discretionary trips will be booked

It makes sense for airlines to extend their flexible ticketing deadlines inch-by-inch, hoping each time consumers will think “this is the deadline, I’m better off buying tickets now for the flexibility rather than waiting.” That marketing strategy may get some customers to spend more, sooner – although eventually customers will catch on.

Regardless the need to extend flexible ticketing is going to persist if airlines want to sell tickets in an era of unprecedented uncertainty.

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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  1. Very astute analysis and it reflects what I and others have been thinking. It’s going to be very difficult for any of these carriers to pull back on these flexible policies any time soon, if ever, as they are now factored into the purchasing decisions of many travelers.

  2. I don’t think the average working American is as scared as you think. The average HR at larger corporations may be. Wait until we stop bailing out big companies and ppl will be more than willing to adjust to the new normal. Thanks to Trump the federal government will be back to normal in May.

  3. Thx, Gary. Can you get a quote from Marriott explaining why hotels are charging peak, and not standard, points prices for hotels for July when occupancy is so low?

  4. @ABC

    I don’t think about it as being “scared”. It’s about the cost. If your’e buying tickets for a family of 4 with traditional change fees, you’re staring at $600-$800 in possible fees. Most families would scream bloody murder about having to eat that kind of cost. I’m one of the lucky ones — I don’t have any issues committing to leisure travel far in advance, it’s extremely rare for me to pay a change fee.

    But in this environment? I’m not booking anything until the “new normal” settles in and travel restrictions are lifted. Meanwhile, the airlines are desperate to get cash coming in, so they *will* have to waive change fees to incentivize people to book.

  5. I’ve been needing and wanting to buy round trip tickets DFW – Western Europe for summer with a mid/late June outbound and early August return for a couple annual self-employed work events but AA’s policies are causing me to hold off. I appreciate the added flexibility but in my case it’s just not enough to cause me to drop the $1,600-1,700+ on a flight right now in these circumstances. In fact their attempt to let me “book with confidence” only proves that they will not give me the flexibility I may need in these circumstances despite their attempt at a policy providing reassurance.

    This is largely for two reasons.
    1. Limiting no-fee changes/cancellations to only one-time.
    2. Requiring all travel be completed within 12 months from the original ticket issue date if that original ticket is bought now and the customer needs to cancel/change it.

    Reason 1: the situation is very fluid and will continue to be. It’s likely that one of my work events in one EU country will be cancelled before the other at which point I’d want/have to change my flight. But then if the second event in another EU country gets cancelled a few weeks later then I’m subject to cancel fees etc. as I would have already used my one free change. This could also affect vacationers as one country may restrict travel before another etc.

    Reason 2: If I end up cancelling my trip because my events cancel, conditions at my destination don’t improve, etc. then I’m left with $1,600-1,700 travel credit that I have to use within 12 months of ticket issue (ie 11, April 2021) but it’s for a self employed business trip that happens only once every summer so I’d have no use for it until after that 12 month window. Another time isn’t really an option given that I already have a Christmas trip booked entirely on miles on non one-world carriers and I have no other available time to go on trips within the next 12 months.

    To truly provide confidence to book now airlines would be well served by:
    1. Allowing more than a single no-fee change. It could be limited to 2, or 3 or perhaps they could allow one free change and one free cancel for travel credit)
    2. Extending the validity of travel funds for flights bought now such that they are (a.) good for 12 months from the end of the original travel dates (b.) good for 18 months from original ticket issue date or (c.) Good through Dec 31 2021. It could be any one of these or it could be whichever is earliest or latest whatever they decide would be more flexible and allow more confidence to book now.

  6. Right. In the past, I knew I’d probably fly as planned, and on the occasion a trip was cancelled, I could eat the fee, and be certain I’d use the credit pretty soon. It is not that way now. I have no travel till June, and don’t know if that will cancel. I’m not buying any more nonrefundable tickets for a while. In fact, if anything comes up, I might consider using miles for maximum flexibility, even for business trips.

  7. You’re correct. As a family of 4 I have a choice of destinations but no crystal ball on what the virus will do in the future, so in late August I have booked a refundable resort 5 hours away by CAR because anywhere by air would stick me with $800 to change flights if *I* have the need to (someone sick in the family, whatever) but they decide that the pandemic is over and no need for waivers.

    Maybe a nimble airline will seize on this and actually eliminate change fees? At this point they’re just a friction on sales.

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