Can airlines continue to extract $2 billion a year in change fees from us?


It’s not your imagination: Fixing your airline ticket is more expensive these days. A lot more expensive.

This data from the Department of Transportation’s Bureau of Transportation Statistics confirms what many airline passengers already know: That the travel industry, particularly airlines, is profiting on one of the most common human impulses: Changing your mind.

Back in 1990, the industry collected a paltry $50 million in change fees. In total. In 2009, it demanded an eye-popping $2.3 billion.

Notice the big spike in 2007? That’s around about the time airlines raised their change fees to $150 and tightened their ticket change policies. Long-time readers of this site noticed a shift in airline attitudes toward change fees just after 9/11, the era of “no waivers, no favors” when, in many cases, it the amount of the change fee exceeded the value of their tickets.

I took the liberty of estimating the 2010 figure based on the first-quarter numbers, which suggests passengers have put the brakes on paying these fees this year.

If my estimates are correct, then passengers are starting to get wise to these fees and either refusing to pay them or finding a way around them. Either way, I don’t think the airline industry can continue extracting $2 billion in change fees from its customers indefinitely.

Or … can it?

(The chart, above is in thousands — thanks to commenter JS for pointing that out.)

  • PLB

    WHAT CAN BE DONE ABOUT THIS????
    I purchased a $350.00 RT ticket (aprx) … San Diego to LA, then had to cancel that trip. I got about $185.00 via a voucher in return.

    I used the voucher to book another flight, one way, SD to Seattle, but had to change my destination to Spokane … so the $150.00 change fee left me with about $30.00 credit. (I booked on another airline at this point!)

    $150.00 change fees are rediculous — American Airlines! But, in general, there should be a CAP — like a percentage of the original ticket price. For my original $350.00 (aprx) I flew NO WHERE, and got a $35.00 credit.

  • Steve

    I have less of a problem with the amount of the change fees and more of a problem with when and how change fees are incurred.

    I missed a flight from DSM-ORD-MCO a few months back on United. It was my fault – absolutely. I know better. Of course, I was also two minutes late to use their kiosk check-in. No, I am not exaggerating. I arrived 28 minutes before my scheduled departure with no bags to check. Should I have checked-in for my flight online? Yes. I was at a hotel and didn’t have access to a printer, so I figured I had to stop at the counter anyway – so, another stupid move on my part.

    When I spoke with the agent at the counter, I begged to have him print me a boarding pass – as an exception – after the 30-minute deadline had passed. I knew that it was United’s last flight out of Des Moines that night, and missing the flight would necessitate an extended overnight stay, which I really didn’t want to do. I was told that there was “nothing” he could do, except offer to re-book me for the following morning’s flight.

    OK…not the most ideal situation, but I had probably been in worse. Then he told me that I was not able to simply fly stand-by the following morning. I needed to have my ticket changed, which would require the $150 change fee and the difference in fare cost. Seriously? Because I was two minutes late checking in for a flight – that if I had simply printed out the boarding pass from home, no one would have ever been the wiser? The total cost was going to be north of $300 – for arriving TWO MINUTES after the cut-off.

    Forget for a moment that my total cost of the *round-trip* ticket was less than $190, but I would like to know how I can get in on getting United to live up to their schedule within two minutes. If they depart two minutes late for any reason not beyond their control (I’ll even give them weather!), who can I write to for *MY* $300? Heck, I’ll give them ten minutes.

    Fortunately, AirTran had walk-up fares for a non-stop DSM-MCO flight that departed about 45 minutes later for around $140. Yes, AirTran’s regular, walk-up fare was less than United’s change fee. Anyone care to guess how many flights (out of roughly 10 round-trips) I have booked on United since?

  • Jason

    @ Steve

    I am sorry am sorry didn’t make it to your flight. And I think it is unfair you had to pay the fee. I believe United agent could be more helpful by providing you with a departure management card which would allow you go through the airport security and get on stand-by list on your original flight.

  • Jason

    The fees are steep. But there were times when if you buy non-refundable ticket you were not able to change it at all: use it or loose it. Yes, it doesn’t make sense when you buy $50 ticket but if you need to change it the fee would be $150. We just dispose the ticket off if the plans change. But we also have a choice to buy more expensive refundable ticket or fly on Southwest. We know about the change fee upfront and still buy less expensive non-refundable tickets. I wonder why?

  • Carver

    I quite agree. Airline policy is clearest example of why monopolies (and by extensions oligopolies) are generally illegal in the US. Consider the rest of the travel indusutry. No one has rules that are remotely as onerous as the airlines. Neither hotels nor car rental agencies can impose such draconian, illogical, customer unfriendly policies.

  • Arizona Road Warrior

    @ PLB – It seems like you need to purchase refundable tickets.

    @ Steve – If your hotel doesn’t have a printer, the printer is broken, etc.; check in online…you can go to the airport and said that you lost your ticket – they will reprint one since you are already checkin. You could print your boarding passes to a .PDF file on a thumb drive and print it later in the day if you find a printer at a Kinko, a customer\prospect site, airport, etc. If you have a smartphone like an iPhone, Blackberry, you can have your boarding pass on that.

  • Arizona Road Warrior

    Unitl there is a level playing field for all of the airlines, the legacy airlines will continue to have this change fee as well as these other fees.

  • Eric

    Steve- I feel for you. I agree that is ridiculous. I was very loyal to US Airways for a long time but can’t risk the cost of changing my ticket anymore due to work. I now only fly Southwest (if possible) due to their lack of a change fee. Makes me feel more comfortable and willing to book.

  • David Z

    Perhaps take a look at Frontier Airlines’ example? They reduced their change fees from $150 to $100 a little over last year, though I think (not sure) they raised their fares to possibly compensate.

  • Karen

    That’s why I fly SWA. No change fees.

  • Carver

    @Jason

    We know about the change fee upfront and still buy less expensive non-refundable tickets. I wonder why?
    ——————————

    I can tell you exactly why. The difference in cost between a fully refundable ticket and a so called deeply discounted ticket can by humongous. I’m going to LA tomorrow from San Jose. The advance purchase far is $46OT, the cheapest refundable fare is $146. That’s a difference of $97.or about 65% of the change fee. So if you change your ticket less than 2 in 3 times, you’re ahead using these specific numbers. Involuntarily changing every 2 out of 3 tickets is substantial for most people

    By comparison, I don’t get who purchases non-refundable hotel rooms. The difference in price is so small that the risk/reward benefit calculation is completely out of whack. I routine see discounts of less than 10 percent

  • Kimberly

    I’m a Southwest fan too. I feel like I can book with confidence…I’ve RARELY seen them with a less than full flight…maybe that should be a “clue”. They make it so easy. And a “non-refundable” flight…no big deal with flight credit I’ll happily keep my business there.

  • Lisa S

    I say fly Southwest whenever it is possible. They have a lot of flexibility on their tickets–plus if you decide you want to check in a bag or two, it doesn’t cost any extra. I just wish Southwest flew more places.

  • Tanya

    Again, have to say props to Southwest. Easiest to change reward tickets, easiest to change your name when you misspelled it, easiest and cheapest to take bags with you and the friendliest ariline around! Not to mention that they now have 3 different types of tickets, but you still always get at least credit to use on future flights. Oh, and free drink tickets quite often. No, I am not a SW employee, just been flying with them since I was 6. I should note that out of 4 gates here in my airport, Southwest uses 2. The other 3 airlines split the other remaining 2, so Southwest also has the most availability here.

  • flutiefan

    everyone here is praising SWA, which is great. but i have to wonder then, who are the people i hear at their ticket counter every day b!tching and moaning about having to pay more to get on a different flight???! i know they *only* charge the fare difference, so that their customers never pay higher than full-fare for a ticket, no matter how many times they change it. that’s awesome. but their passengers seem to think that “no change fee” means they can reschedule anytime for free. they don’t seem to realize that the other airlines charge not only the fare difference, but $150 on top of that.
    can you people please educate them?!

  • flutiefan

    Also wanted to say…. i’d booked a vacation with 2 friends, and one had recently gotten married. she booked her tickets under her new name, since that was on her credit card and ID. however, we were traveling out of the country, and her passport wasn’t changed yet. United charged her $150 to correct her name, even though she had ample proof that she was the same person. that’s just crazy.
    i work for an airline, and changing a misspelled or maiden name does not cost $150 or more than 5 minutes of time.
    i have to ask the regular travelers on here… what do your airlines do if a name is misspelled? will they charge the $150 change fee? or just fix it and send you on your way (like i do)?

  • David Z

    can you people please educate them?!

    Oh, we try. What can we do if the travelling public won’t appreciate or accept it anyway except to grin and bear with it?

  • Dixie

    Southwest is great …. when you don’t live five hours from the nearest airport with service.

  • Nobody

    Carver says it all.
    If you hate the fees, don’t buy nonrefundable tickets.
    Tickets you can’t get refunds on are those. I don’t know why the airlines give you another flight by paying a fee. You show up late, you should not get anything but a place at the back of the line to buy a walk up full fare for the flight that has seats available.
    You show up after the concert, game, event after it’s over, you don’t have anything but the unsued ticket for a keepsake. Not even a refund on the taxes, ticket handling fee, or markup by the computerized ticket agent.
    Other flyers should not be susidizing with higher ticket prices, your inability to organize. If you weren’t always on your cell phone talking to others of the same me-me-me self importance, you’d know what’s going on in the world.
    Why don’t you write the oil company and tell them you’ll never buy gas from them because the price per gallon went up 30 cents right before you had to fill up?

    Lowered it another penny to compete
    With the station down the street
    To get them to buy my smokes and sweets
    Raised like everyone in a heartbeat

    Ended up face down in the street
    Nobody was faster

  • CM

    @Steve, I have been your your situation before… waay too many times. I’m a serial travel *and* chronically late – bad combo! I’m sorry you had to deal with such a terrible agent. It really costs them very little time, effort and money to either give you a standby boarding pass and let you try your luck at dashing through security or confirming you on the next flight for free. That’s what happens to me 90%+ of the time.

    The other ~10% of the time… I’ve tried all the tactics. Begging, sob stories, kissing their butts, being extra polite and friendly, appealing to reason and common sense. Nothing sways their stone cold hearts. The one thing that did work when I got an agent like that — I walked to the other end of the check-in area and asked another agent, who kindly printed me a standby boarding pass and had me on my merry way. There are kind people in the travel industry after all :)

    @flutiefan, I’ve never had a problem fixing misspellings of my name on Southwest. This happened once on US Air and they wanted to charge me $150! Since mine was a misspelling (two letters juxtaposed in my last name) rather than an actual name change, I took a gamble and went through security anyway without paying US Air to change my name. Might’ve pushed my luck a little but I didn’t have a problem at all! I figured the worst that would’ve happened was I’d be turned back to fix it, so I’d just be out $150 – the original fee.