The airline industry is ditching change fees because it’s desperate for people to fly
American Airlines and Delta Air Lines both said they would permanently eliminate fees associated with changing or canceling a flight. The news comes less than a day after United Airlines first announced a permanent end to its change fee policy.
All three carriers have been waiving change fees since March 2020, when the novel coronavirus pandemic first disrupted global air travel. With demand dried up, the airlines are seeking to make flying look safe, stress-free, and, most of all, cheap. And that means eliminating many of the fees and surcharges associated with air travel.
“We’ve said before that we need to approach flexibility differently than this industry has in the past, and today’s announcement builds on that promise to ensure we’re offering industry-leading flexibility, space and care to our customers,” said Delta CEO Ed Bastian in a statement.
“When we hear from customers about where we can improve, getting rid of this fee is often the top request,” said United CEO Scott Kirby.
“By eliminating change fees, giving customers an opportunity to get where they want to go faster with free same-day standby on earlier flights and providing access to upgrades and seats for all fare types,” American Airlines Chief Revenue Officer Vasu Raja said, “we’re giving customers the freedom to make their own choices when traveling with American.”
The new policy only applies to travel within the US. Airlines have traditionally relied on change fees, which can be as high as $200 a person, to rake in billions of dollars every year. United took in $625 million in change fees in 2019, while Delta earned $615 million. Industrywide, change fees brought in $2.8 billion in 2019.
But the COVID-19 crisis has brought the industry to the edge of financial ruin. The major airlines were hit with historic losses this past quarter. Collectively, the Big Three — United, Delta, and American — lost a staggering $10 billion during the second quarter of 2020. JetBlue lost $320 million, Southwest $915 million, and budget carriers Spirit and Alaska lost $144 million and $214 million, respectively.
The pressure is now on the smaller and midtier carriers to make a similar move. Those airlines aren’t hoarding as much cash and most likely can’t afford to give up revenue as the major carriers. A spokesperson for Southwest noted that the airline has never charged an extra fee for travel changes, while spokespersons for Spirit, JetBlue, and Alaska airlines did not immediately respond to a request for comment.