Most airline fees are variable. Why not change fees?

by Janice Hough on July 24, 2013

check-in-desk
Airlines are increasingly sophisticated with their fee structures. A “preferred” seat assignment fee varies from flight to flight, baggage charges are dependent on weight and/or time of payment, fuel surcharges vary from day to day. In fact, almost all fees are variable except the change fee on a domestic ticket.

It would be reasonable — and a good public relations move — to make the change fee variable, too.

I know that the change fee is somewhat variable — it is the set fee + fare difference, which can be anything from zero to hundreds of dollars. However, the basic fee (with or without any difference in fare) with the legacy carriers is $200. Period.

Sometimes, the fee is more than the fare; sometimes, considerably more. Plus, changing the return before travel commences means recalculating the entire fare then adding on the $200. In many cases, it may make sense to throw the whole ticket away. (In fact, I’ve read the suggestion more than once that anyone facing losing the entire ticket should not cancel it, so that the airline cannot resell the seat.)

In addition, the change fee is the same no matter when the ticket is changed, any time 24 hours after ticketing. It’s hard to believe that the costs the airlines incur always justify the fee.

For example, a good client of mine sent me a request for four tickets this fall. One of them was a November trip to Boston, “leaving in the evening.” I sent him an itinerary with a red-eye flight and he confirmed it. A week later, he was entering the flights in his calendar and realized he had made a mistake. While he admitted sending the email and confirming the booking, he realized he had meant to say “arriving in the evening.”

So okay, it happens. And the earlier flights were wide open and the fare hadn’t changed. Four months notice. Uncomplicated as these things go. But, still, airlines demanded their $200. Our agency waived our fee, but United would not, although the agency did all the ticket exchange work. (Plus, it’s pretty hard for me to imagine that having a seat booked for all of a week really affected the airline’s yield management.)

Most of the travel industry uses a sliding scale. Cancel a cruise — The penalty depends on when it is canceled and how much the cruise cost. Ditto for tours and, often, for hotel rooms. Why can’t the airlines use a similar model?

Paying the fare difference absolutely makes sense.

Here are two suggestions for the change fee itself:

First, make the maximum basic penalty no higher than the cost of the flight being changed, or perhaps for fares under $100, make the penalty only $100 plus fare difference.

Second, reduce the fee for changes made way in advance. Cruise lines and tour companies have as many as four or five different levels of penalties. It wouldn’t be all that difficult for the airlines to have at least two levels, to charge, say, a reduced fee of $100 for changes made more than two months out. The airlines could have more different fee levels, both lower and higher. (In fact, a sliding scale might even allow for higher fees during holiday seasons, much as other suppliers do, especially hotels.)

It’s not that I’m against airlines making a profit. But fees that don’t make sense are one of many public relations problems faced by the industry. Who knows? Maybe, if airlines were more reasonable about their change fees, more passengers might book in advance, which might even help carriers manage inventory better.

What do you think, Consumer Traveler readers?

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  • Tim

    Since the fee increase, I’ve seen some some crazy fare structures on US where the refundable seats are cheaper than the non-refundable. I’ve been buying those more often as a result.

  • MeanMeosh

    Alaska and jetBlue have recently switched to a tiered change fee model, so let’s hope this catches on industry-wide.

    Personally, I’ve often wondered why the airlines couldn’t do tiered change fees, especially since cruise lines and hotels have been using them for years with no issues. I don’t know that a fee based on the fare would be workable, though, primarily because of consolidator/group fares. For example, if I buy air with my cruise, and they charge me $175 for a flight to FLL, but the “real” fare shown on the fare basis is $250, what would you base the change fee off of? I could see that leading to a lot of problems. I like the idea of tiered change fees, but would just as soon keep it simple and base it on time from departure.

  • janice hough

    A cruise line could just charge a flat amount, but you make a good point. I still have a hard time with fees that are more than the fare right off the bat.

  • jim6555

    I try to fly Southwest whenever I can. NO CHANGE FEES. You just pay the difference between the old fare and the new, if any.

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