On August 31, both American Airlines and Delta Airlines announced that they would scrap domestic change fees. It matched the announcement made by competitor United Airlines. United announced about the same, one day before them, on August 30.
The airline companies adopted the move as they are desperately trying to get people back to flying. Due to the coronavirus pandemic, aviation has been most hit in the US and across the world. US air travel recovered modestly over the past few weeks compared to what it was in April. However, passenger traffic is down by 70% from what it was a year back.
Four of the biggest US airlines lost a combination of $10 billion from April to June. The airline companies shared $25 billion in federal payroll aid under the relief legislation of the pandemic. As per reports, they will lobby for $25 billion more.
United Airlines warns 36,000 employees that they can lose jobs by October. The company got $5 billion in taxpayer money for keeping their workers on the payroll in September. The CEO of United Airlines, Scott Kirby, said that most people ask them to remove change fees. As it is the most requested option of improvement by passengers, they decided to remove it.
United Airlines scraps change fees
The move by United Airlines created pressure on Delta and American Airlines. Thus, they too dropped the change fees by $200 on domestic flights. Delta Airlines reported that they are dropping change fees as travel is affected by the virus and will continue to do so through year-end. However, American Airlines didn’t respond to why they made this move as well.
Southwest Airlines doesn’t have change fees, and its CEO suggests that it has always helped them get more customers. United Airlines said that they scrap change fees from now for everyone buying premium or standard ticket to travel within the US.
United Airlines also plans to extend a large waiver of change fees. This includes international travel till December 31. Customers paying the cheapest fares for “basic economy” can change tickets freely because of extended waivers.
From January, they will allow passengers to fly standby for no costs on other flights, as the same day as the booked plane. The customer groups have accompanied an array of charges that airline companies impose on things that were previously a part of their fare.
What critics have to say
The change fees attract scorn as critics say that the costs exceed airline’ costs of canceling or changing tickets. Prices on checked-in luggage and ticket change have gained widespread during the downturn of the indufstry in 2008. From that time, airlines add more charges on seats with legroom, prior boarding, and other amenities.
Additional fees have made airlines highly profitable for more than a decade, and that has broken due to the pandemic. Right now, airlines are dropping prices and reducing the workforce to cope with the economic blow.
Scott Kirby acknowledges that airlines are going through a tough time but have had to make more challenging choices to survive. Sometimes, they have had to compromise on customer service due to the price. He also said that United Airlines is looking forward to serving customers better at this time.
Since 2010, the Chicago-based airlines have made $6.5 billion due to change fees. In 2019, they earned $625 million and were third behind American and Delta Airlines.
In Washington, many lawmakers launched campaigns in different intervals to outlaw ticket change fees. Moreover, in 2018, Senate had approved one bill that prohibits “unreasonable” charges for canceling and changing tickets. However, the measures were scuttled during debates with the House.