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