Few things in travel are more maddening than those hefty fees to change nonrefundable tickets.
Need to leave earlier, stay longer or postpone your trip? That’ll be $200 per person, plus any fare difference, on the country’s largest airlines excluding Southwest Airlines. And that’s just for flights within the United States. The change fees are as high as $500 for international flights. In many cases, the fee wipes out the value of the ticket.
Airlines often work with travelers with compelling cases, but one carrier sounds like it’s considering a broad shift in policy when it comes to ticket changes.
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Delta Air Lines has been dropping hints about a more flexible change policy since its investor day in Atlanta in December – when a top executive said the airline is studying ways to “approach flexibility differently than this industry has in the past” – and CEO Ed Bastian provided more color, if cryptically and with few details, in an interview with USA TODAY in Las Vegas last week.
Bastian, who was in Las Vegas as the first airline CEO to deliver a keynote address at the giant tech trade show CES, said the Atlanta-based airline is focusing on ways to earn customer trust beyond being a reliable airline, which it has mastered based on its DOT rankings and other metrics.
“When you say that you want to be seen as a trusted consumer brand, it calls into question all interactions with customers and where there are vulnerabilities to being considered trusted,” he said. “When you ask that question, ‘Where are those vulnerabilities?,’ clearly fees are one of the factors that we get dinged on. … So it comes back to us to think about: Are their better ways to manage that?”
And that effort includes a look at fees and policies, including change fees, he said.
“How do you, with change fees or other fees that you have in the process, how do you turn them into something that people can understand more, why they’re there, and maybe provide greater value alongside it, or change the structure?” Bastian said.
I’m curious what frequent flyer level you have to be on airlines like @Delta in order for them to waive the insane $200 change fee they charge if you have a work situation come up and need to delay your return.
You don’t hear airline executives talk much about fees, which have become a major moneymaker for airlines, except to defend them. But Bastian acknowledged the widespread negative traveler sentiment on some of the industry’s fees.
“When you think about our fee structure, I think there’s fees in there, and change fees are part of that, that people feel are punitive.”
Bastian, careful not to run afoul of regulations forbidding discussion of future pricing, repeatedly emphasized that no decisions have been made on change policies or a broader look underway at how Delta displays its fares and fees to travelers to be as transparent as possible and earn more traveler trust.
“I’m not suggesting that we’re going to make changes,” he said. “We don’t know.”
The airline’s comments at investor day would suggest otherwise, at least on the change-policy front.
Eric Phillips, the airline’s senior vice president of pricing and revenue management, said the airline has a group of customers and employees working together on a project to see how Delta can “change change.”
“We can be better about providing flexibility,” he said. “Look, we recognize, life happens. Meetings get rescheduled. Dance recitals are important. And yes, sometimes T-ball practice is like a Game 7. So our goal is to make sure that we provide our employees with the tools and the policies that they need so they can respond to the customers with the fairness and empathy that customers want.”
He said the airline plans to share more details this year but provided no timetable.
What a change in Delta’s change policy might look like is the big question, of course.
“Who knows what it, in practice, actually means?” said Brett Snyder, a former airline employee who runs a travel service called Cranky Concierge and writes the Cranky Flier blog.
If Delta simply is more transparent about change fees and why it charges them, that’s no benefit to travelers, he said. But if it changes its policies or fees, say by waiving any fare difference or changing the fee, “That’s a big deal.”
The big dilemma for Delta is money. Delta collected $615 million in ticket change fees in the first nine months of 2019, second only to American Airlines, according to the federal Bureau of Transportation Statistics. Delta’s change-fee revenue for all of 2018: $694 million. To put those figures in perspective, low-cost carrier Allegiant Air’s total quarterly revenue in the latest quarter was $436.5 million.
“Can they find a way where they think it actually will not be revenue negative?” Snyder said.
Snyder said airline fees tend to go in only one direction: up. And that hefty change fees in particular force travelers who can’t afford refundable tickets to make “bad” decisions, like not changing a flight when a child gets sick.
“You’re like, ‘God, I want to, but I can’t pay that money.’ ”
Southwest Airlines has long argued that not charging change fees (it does charge travelers any fare difference since they booked their ticket) or bag fees is more than offset by the business it wins for its lack of fees.
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