Airlines eye new ways to squeeze vacation travelers

On those most affordable tickets, airlines before the pandemic typically charged $200 to change a flight plus the difference in fare, if there was one.

Southwest Airlines, the outlier airline in the world of change fees, has never charged for flight changes, a policy consumer advocates have applauded.

“The reason why they’ve had to suspend those change fees is to give people flexibility and entice them to book by letting them make their plans in pencil rather than pen,” said Scott Keyes, founder of airfare deal company Scott’s Cheap Flights. “Not having a $200 penalty to change your flight made people feel a lot more comfortable to be able to get some plans on the calendar and get a trip booked.”

In 2019, U.S. airlines raked in $2.8 billion in change fees, according to U.S. Department of Transportation statistics. In the first nine months of 2020, after enacting fee-free flight changes, carriers only made $799 million in change fees.

Airline consumer advocates and airfare experts said they are cautiously optimistic the airlines will honor their promise to make change fees a thing of the past.

But, they warned, anything could happen.

“The first and probably most important thing is that there's really no such thing as permanent in the airline industry,” said Kyle Potter, executive editor of the flight deal website ThriftyTraveler.com. “Permanent, in airline language, means anywhere from one to five years, and anything beyond that is anyone's guess.”

Potter said all U.S. carriers are still operating under a temporary COVID-19 fee waiver policy where all tickets are eligible for a free flight change. Once those policies expire at the end of March, he said that’s when we will see the new change fee waiver rules take effect.

Beware of Basic Economy

“Right now, all new bookings on Alaska, American, Delta, Hawaiian, JetBlue, and United — even basic economy — automatically include free date changes, so long as you purchase by the end of March,” according to Scott’s Cheap Flights’ newsletter. “After March 31 you’ll still be able to do this, but only if you book main economy or above, so it’ll cost you a bit more.”

It’s especially important, then, for budget travelers to note that airlines are not waiving change fees for highly restrictive, no frills basic economy fares. Their tickets, the cheapest fares available, will go back to being nonrefundable and nonchangeable beginning with new travel booked April 1, 2021, or after.

These rock bottom fares may entice bargain travelers with a cheap getaway, but they frequently come with restrictions on baggage, seat selection, boarding, and the inability to change flights.

“The dirty secret of the airline industry is that they always don't want people to buy basic economy,” Potter said.

He believes more travelers will gravitate away from booking basic economy fares as they opt for more expensive fares that have added flexibility — regardless of whether passengers eventually make a flight change. Airlines may have eliminated change fees, but travelers may end up paying more for tickets upfront.

“The flexibility to be able to change without a huge fee, or change at all period, is going to become much more powerful,” he said. “It will drive some more revenue for airlines that they've given up by getting rid of that $200 change fee.”

Potter said he has already seen airlines charging more expensive fares for the upgrade from basic to standard economy, which allows for free changes.

Changes, cancellations and refunds

Keyes warns free changes do not equate to free refunds should you decide not to travel.

“You can change your date, but that doesn't mean you can get your money back,” he said. “In order to be able to get a refund for that flight, you actually had to have a much more expensive refundable ticket.”

He said fliers should also think about the fare difference — something fliers still need to cover if the flight they’re changing to is more expensive than the originally booked flight. That amount can be pricey and unpredictable.

Most carriers, except United, have announced they will credit the fare difference should fliers change onto a cheaper flight.

What if you do not take the flight at all? Don’t expect to get your money back, unless you’ve purchased a fully refundable ticket. Airlines will typically issue a travel voucher in the value of how much you paid, which fliers can redeem for future flights. But those vouchers come with expiration dates and many fliers who were issued vouchers during the onset of the pandemic found they are expiring soon.

Consumer advocacy groups are fighting to get back money for travelers who had their plans upended in 2020 by the pandemic.

“There's really no other industry that you can point to in which someone pays for a product, and then the company says we're unable to do it right now, but we're going to hold on to your money for a year or two years,” said William McGee, airline adviser to the nonprofit advocacy arm of Consumer Reports.

McGee believes change fees should have been eliminated years ago. He doesn’t see them coming back after the worst of the pandemic passes, particularly as the airline industry caters to a crowd that is predominantly leisure travelers.

“I think that scares the airline industry to know that a lot of travel, quite frankly, is discretionary,” he said. “I think it would be a tremendous mistake if they're thinking we'll do this for a while and reintroduce change fees as far as making up the revenue.”

Tim Jue writes about travel and the airlines. Following him on Twitter @timjue.