How absurd can airline junk fees get in 2014? You ain’t seen nothin’ yet

By | December 30th, 2013

Chris Parypa Photography / Shutterstock.com
Chris Parypa Photography / Shutterstock.com
The intoxicating combination of junk fees and loyalty programs seems too powerful for even the most consumer-friendly airline to resist.

At least that’s what passengers like Peter DeForest are discovering when they try to change an award ticket.

He’d saved up enough frequent flier miles on Virgin America, an airline with a stellar reputation for taking care of its customers, to fly himself and a companion from San Francisco to Las Vegas. But shortly before the trip, his companion fell ill. He asked Virgin if he could cancel the trip and get his miles back.

Sure, a representative told him. If he paid the airline a $100 per reservation “redeposit fee.”

Seriously?

“It’s ridiculous,” he says. “It’s nearly the value of the points themselves.”

DeForest’s fee encounter comes at a time when airlines are imposing all kinds of new junk fees. Virgin Atlantic is reportedly adding a $41 seat reservation fee for certain flights and United Airlines is doubling some baggage fees, for example.

I agree with him. I’m not a frequent flier on Virgin, but I kind of wish I were. The airline has, in the past, gone out of its way for its customers, so I couldn’t believe it would stick it to someone like DeForest, who uses the airline frequently for work.


By way of full disclosure, I’m not one of those bloggers who study loyalty program rules as if they’re holy scripture. I respond to complaints and try to solve them. So I suggested DeForest contact Virgin in writing, to make sure this wasn’t a misunderstanding.

He did.

In response, Virgin apologized in writing for his “disappointment.” (When someone apologizes for the way you feel, it’s not real. By the way, you can do that with my previous apologies on this site, too. Scroll back in the archives. They’re not real.)

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“We do make every effort to disclose, prior to booking a flight, all of the terms and conditions of the specific fare type that is being booked,” a representative said. “In the case of a rewards booking, that does include letting the guest know that there is a fee involved and cancellation required if a change to the reservation is needed. It’s never ideal when your plans change, but we don’t want it to be a surprise to you if that occurs.”

Virgin’s fees are clearly disclosed on its site, and by the way, they’re more or less in line with the rest of the big airlines. (Here are United’s, for example, and here are Delta’s.)

DeForest doesn’t buy it. He calls the redeposit charge a “junk” fee — after all, how much can it cost to put his miles back into his account? — and suggests it’s just another revenue generator for an airline like Virgin.

An airline, by the way, that ought to know better.

“How can [Virgin] justify such a high fee for what is really a simple request?” he wonders. “I have been a loyal Virgin flier, and my consulting firm’s staff also flies Virgin frequently to our meetings on the East Coast. Through no fault of mine, my companion was unable to make the trip. I tried to do the right thing and cancel the reservation. But I feel that Virgin was unfairly adding high fees just to re-deposit miles.”



  • bodega3

    Wish I could feel sorry for the OP, but he has access to the rules and could have protected his ticket with travel insurance. It costs only dollars to get this coverage. I bought it for the my last ‘free’ ticket.

  • sdir

    Isn’t the “redeposit fee” similar to a change fee, which a customer pays for an itinerary change? He got off light getting charged only $100 per ticket. He’ll be getting his points back, whereas a regular traveler doesn’t get a refund, but instead receives a voucher with many limitations that they may or may not be able to use in the future.

    I’m a little surprised the airline is asking for cash to redeposit the points, however. Shouldn’t they simply take a certain number of points in exchange? This is the one thing that bothers me about this situation.

  • TonyA_says

    If you do not like the terms and conditions of the frequent flyer program, then by all means, please do not join. But stop whining about these so-called free award tickets. Y’all beginning to sound like a broken record.

  • I report, you decide. (Hey, that has a nice ring to it!)

  • TonyA_says

    He’d be buying travel insurance at what cost to possibly cover $100 in redeposit fees? Aren’t there plenty of cheap SFO-LAS fares? Maybe just buy one and save the points for a better valued trip, like international.

  • Cybrsk8r

    Yea, but it’s dangerously close to Faux News’ tag-line.

  • ;-)

  • Cybrsk8r

    I have to ask this. What, exactly, would you get back from travel insurance on a free ticket?

  • Justin

    So what was the outcome here Chris?

    Loyalty Programs are incentive based and NOT free. Real Money (to quote) changes hands to acquire these points.

    To prove airlines aren’t interested in loyalty, points value diminishes over time and fees apply. One surmises a courtesy waive of junk fees to frequent and loyal customers is in short order….Nope.

  • That would be a perfectly valid conclusion.

  • sirwired

    $100 doesn’t seem out of line to me. The reservation itself is not any different from a non-refundable ordinary ticket. It doesn’t seem that outlandish that they’d want to have a similar fee structure for the two types of reservations. And the points weren’t worth much more than $100? Really? Because FF miles have a wholesale cost of about a penny. I’m pretty sure a R/T for two from SFO to LAS is a bit more than $100.

  • Cybrsk8r

    Actually, it’s in the range of $158 – $240 or so, depending on day of the week. That’s from VA’s web-site.

  • backprop

    I looked into insuring award travel before, in case I had to return home early and pay a walk-up fare if no award seats were available on the earlier flight. Travel insurance would have covered the redeposit fee but nothing else. Totally not worth it IMO.

  • Alan Gore

    In the days when I was a frequent flyer, the only awards program I ever used was American Express. When I booked a flight, usually one of our European relative visits, we could sign over Amex miles to whichever airline we took on that occasion.

  • Kairho

    Except the value of the miles is not the same as the price of a trip they are used for. The value is that of the highest priced trip they can be used for.

  • Nancy Marine Dickinson

    A journalist who just reports the story and let’s the reader make up their own mind? What a concept..

  • Lindabator

    The redeposit fees.

  • jsteele98

    If he made the res online they managed to figure out how to deduct the miles from his account automatically without costing themselves money. If he cancelled online they ought to be able to figure out how to put them back without costing themselves anything.

    Seems reasonable to me that if you can’t do it online and they have to have an agent attend to it manually then charge something for it. If its done online then it ought not cost anything

  • MarkKelling

    I used to do that too — until every airline I cared to use dropped out of the AMEX program. I would take multiple trips per year on my points.

  • MarkKelling

    The OP is either not that loyal or that frequent of a flyer. If he were, he would not have paid any fee since the higher level members of the program are not charged redeposit fees. At least VX doesn’t charge fees to even let you book a flight with miles like UA does.

    It bothers me that so many people seem to believe that since they flew a few times on any given airline or got points through a credit card that the airline would consider them loyal frequent flyers. Are people that easily brain washed by the advertising hype? All you have to do is look at the status level charts any airline publishes and you can see that taking a half dozen flights a year barely is a blip on the charts. You have to fly half a dozen flights a month for most airlines to consider you a “frequent” flyer. I am not against the frequent flyer programs since they can be beneficial to those who actually are frequent flyers, but most flyers need a reality check to set them straight as to where they fall in the pecking order.

  • omgstfualready

    I agree. I’ve posted before that loyalty has no definition. Person 1 that travels a couple times a year but ALWAYS on X airline considers themselves loyal. But Person 2 flying two dozen times a year, half on airline X wouldn’t consider themselves loyal. Which customer is the airline going to want more?

  • cowboyinbrla

    May I ask what the premium was for that kind of coverage? If it’s $5 per flight, maybe that’s reasonable. If it’s $40 per flight, and you don’t cancel at least once every 2 1/2 flights, it’s a loser. (And yes, I realize all insurance is a gamble.)

    Still, again, the point is not “You knew the rules and you knew you could insure yourself against loss.” The point is that unlike unbundling, which at least pretends to be about not charging people for services they don’t use (even if the unbundled fare doesn’t drop), this is about charging an outrageous fee simply to pad profits at the expense of the kind of customer Virgin SHOULD be kissing up to and offering special treatment.

    Was it disclosed? Sure. Was it a disclosed ripoff? Absolutely.

  • cowboyinbrla

    They don’t want the points back, sdir. They can already control making the points useless by making them difficult to redeem. Airlines want cash. Cash goes towards the bottom line, especially for “services” like this which have zero cost, hence they’re 100% profit.

  • cowboyinbrla

    I believe the post said it was $100 per reservation, not for the two of them. So that’s $100 per ticket, and if the ticket could be had for $158, as noted below – that’s two-thirds of the cost of the ticket in cash to get back the points.

  • bodega3

    Yes, not the best use of his miles for a short haul flight.

  • Justin

    I stay dozens of times a year in hotels. I stick to one brand when price allows. Know me by first name since it’s often same property. I guess when you can almost buy the staff holiday cards, you’re loyal :).

  • bodega3

    You insure the redeposit fees.

  • bodega3

    It doesn’t matter what the cost is or was. The OP signed up to be a part of a program and was given the information on how the program operates. He didn’t have to use those miles, but since he did, there was a cost to cancel to save the miles for future use. If he hadn’t canceled, he wouldn’t have given a rip about that fee.

  • Dutchess

    Except, this isn’t about the actual cost of crediting/debiting miles from a mileage account. If you bought award tickets and reserved two seats and canceled them just before the flight you’ve had two seats locked up that will possibly go unsold. This is part of the airline’s yield management fare structure, it was also part of the awards program when they signed up.

  • bodega3

    If the ticket could be had for $158, why would he use his miles? We never recommend the use of miles for any ticket that costs less than $300, as it isn’t a good value in the use of the miles.

  • Carver Clark Farrow

    Virgin is weird (In a good way)

    On Virgin, unlike other carriers, there is almost no concept of best use of miles. You get miles based on spending, and the redemption is based purely on the cost of the flight. For example most legacy carriers charge a fixed number of miles for a domestic ticket regardless of price and the award ticket has its rules, independent of cash fare. Until you obtain a minimum threshold (e.g. 12,500 miles) the miles are useless for trips.

    Virgin is different. It simply, you get 4 points for every dollar spent on the base fare and 20 points can be redeemed for 1 dollar of airfare. So a cheap advance purchase SFO-LAS ticket on a Tuesday might be only a few miles, but the same flight with no advance purchase on a busy weekend might be several times the number of miles.

    I’ll bet that even Chris would approve as the program can work even for relatively infrequent fliers. No blackouts dates, a $2.50 fee for taxes, no capacity control, no redemption hassles.

    If my morning math is right, it’s basically buy five, get one free.

  • Tedic

    Although most airlines, if not all, inform customers of the terms and conditions involved in loyalty programs, many do not make the effort to clearly inform them. The reason the airlines do not make the caveats and exceptions to loyalty programs clear may be because they want people to be attracted to their programs and some people wouldn’t be if all of the exceptions were clearly stated. To me, exceptions and junk fees indicate that mutual loyalty is often not valued as a means to gain long term profit for the airline. Still, of course, airlines have to protect themselves legally and find some way to give customers the information they need, whether it’s clearly stated or not. In my experience, the result of this is that airlines bombard customers with several pages of legalese including statements that barely make sense to laymen unfamiliar with common legal phrasing. The terms, conditions, blackout dates, exceptions that change depending on a customer’s travel situation read more like logic puzzles on a standardized test. Many travelers know by now that the airline industry tries to squeeze more out of customers than it did years ago, so we have to be extremely cautious when entering a loyalty program and actually go through the pain of reading and understanding all of the legalese. Things get even more complicated when a loyalty program changes its rules and continuously sends updated legalese to customers in the mail! That’s a whole ‘nother head-spinning story.

  • Carver Clark Farrow

    There is no business loyalty, merely incentivizing people to use their travel dollars with the provider. The very concept is meant to divert the conversation.

  • Carver Clark Farrow

    Virgin has the easiest points redemption. No blackout, not capacity controls, useful on all fares and flights.

  • Tedic

    Agreed! In some industries, pursuing loyalty makes sense because it’s actually more profitable for companies. It seems NOT to be the case here!

  • Carver Clark Farrow

    Check out Virgin’s program. Very different. It uses points instead of miles. Redeposit fee aside, its basically buy 5 get one free.

  • Carver Clark Farrow

    +1. Whoever came up with the moniker loyalty, earned his/her salary several times over. Complete hogwash. Its a purely business relationship.

  • TonyA_says

    Agree +100. Airlines make a ton of money selling miles to credit card banks and to consumer companies (like Target, Pudding Cup makers, etc.). If anyone still thinks they care about “us”, it’s time to see a counselor.

  • TonyA_says

    You can’t win. If they don’t drop out, they devalue.
    If you want to get something, use it ALL up immediately.
    Otherwise donate it so others can use it :)

  • Carver Clark Farrow

    I may have been imprecise. I think frequent guest programs can be a great deal. Like any other investment, you have to consider whether it works for you.

    But you should be loyal to yourself, not to a company. I stay with Starwood hotels mostly because the entirety of the package works well for me, i.e. I love the beds, free wi-fi, free breakfast, and upgrades. I used to spend time with Marriott, but they changed their program so it was less useful so I walked across the street to the Westin and have been very happy

  • bodega3

    Thank Carver. Virgin America isn’t a carrier I have ever sold or looked into their FF program. I am basing my comments on the major carriers and forget that these start ups do often do things differently.

  • bodega3

    I commented on your other post about this. I admit to forgetting that these low cost carrier start ups often do things differently and since I haven’t looked at their program, I was basing my comment on the major carrier’s programs.

  • Carver Clark Farrow

    I”ll bet dollars to donuts, that even you would approve of Virgin’s elevate program.

    You “earn” 5 points (not miles) per $1.00 spent on the base fare
    You redeem 20 points per dollar of base fare on your destination trip
    No blackouts
    No capacity controls
    No minimum travel thresholds to achieve
    $2.50 fee for taxes

    That’s why the OP used points on a short/cheap trip; Generally a terrible redemption on legacy airlines FF programs, but perfectly reasonable on Virgin.

  • Carver Clark Farrow

    Perfectly reasonable.

  • DavidYoung2

    At least with Amex Membership Rewards you can use them as REAL money at 1.2 cents per mile with their pay with points program. Until they change it…..

  • TonyA_says

    To prove your point, look at all those award booking services and crowdsourced sites like Flightfox. People actually pay for experts to find award travel flights at the tune of $100-200 a pop (for international travel). So these points have some real value in them especially for Business and First Class travel.

  • MarkKelling

    I ended up donating all my remaining points to the Red Cross.

  • Tedic

    Thanks for the tip!

  • MarkKelling

    The benefits offered by Marriott are now convoluted and difficult to understand. I recently stayed at the Marriott Waikiki where they tried to hit me with a resort fee. I declined and was given the hard sell about getting free internet and so on. Since I am a Gold level frequent stayer (barely) I get internet free anyway. The desk person insisted that resorts were excluded from this. since I was only there for a day, I took my chances. I got free internet automatically on my bill. Saved the resort fee, but think I will stay elsewhere next time.

  • Well done!

  • PolishKnightUSA

    I’ve been considering jumping into bed with a loyalty program such as Lufthansa or United, but hesitating precisely because of all the “gotchas” I read about. Either award space is limited (so the miles are useless) or you have to pay double miles in order to redeem them for a higher ticket class (not necessarily business or premium but a higher fare nonetheless.) The other gotcha is fuel surcharge. Basically, a free flight becomes a seat and you pay for fuel kind of like ordering a hotel room and getting hit with a bed, resort, and shower use fee.

    In the meantime, I love my AMEX blue: tons of cash back and at the end of the year, I get enough money to buy a ticket outright.

  • PolishKnightUSA

    My brother travels a lot for his business (not HIS but whom he works
    for) and he gets a per-diem for a certain amount whether he uses it or
    not. So he has no motivation to economize provided he stays below that
    cap. I noticed that one hotel I was staying at which was more expensive
    actually wasn’t any better, IMO, than a cheaper place and opted to
    switch. But since I don’t travel often, I had no incentive to stay with
    the more expensive place to accumulate points/miles. My manager
    noticed that I stayed at cheaper hotels and didn’t rent a car (used the
    hotel shuttle) and that gave him an incentive to approve future travel
    requests.

  • bodega3

    If you fly domestically, UA would be the one to get of the two. Also note, that by being a member of a program, you get priority on rebooking over someone who isn’t a member. With canceled flights being a norm these days, this can be very helpful. I have different cards that we use to earn tickets. Just like any shopping trip, knowing how to use your accounts before hand is very important. Depending on my needs, will depend on which program I will use my points from. Having used my points recently to fly first class from LHR to SFO, not an upgrade, but confirmed first class booking, I will tell you that I am a happy UA FF member!

  • Travelnut

    I used to buy a ticket on Continental every year using my AmEx Membership Miles. Ah I miss those days. The only airline left that I might use is British Airways but their online rewards reservation system is super confusing and I’m afraid I would commit points to them and not be able to use them.

  • VoR61

    My take on the added fees comes from a long career in business. Management often fails to consider the impression left by the policies they create. Sometimes a well-intended decision backfires because of the impression it creates in those affected.

    When you start charging for seat assignments, pillows, snacks, sodas, oxygen, bathrooms, etc., you will likely have many who see that as “cheesy” and needlessly cheap. Especially when you included those in the cost originally.

    On the other hand, it makes sense to me to charge for checked bags as the weight adds to fuel consumption. But where they have “burned the toast”, I believe, is in the AMOUNT they charge. Again, the general impression is greed, which works against them.

    Undoubtedly, we can only go so far when choosing not to fly with one airline or another. But I would ask the airlines: “Is it really worth it to charge me $8 for a pillow and blanket?” Better, I think to add $1 to everyone’s fare and get your revenue that way.

  • Jeanne_in_NE

    I belong to a couple of airlines’ frequent flyer programs, including UA, although I don’t fly “frequently”. So even if I have a piddly number of points in that UA account, I’ve got higher priority on rebooking over someone who doesn’t have an FF# with them?

  • MarkKelling

    Yes.

    And if you do fly with them instead of getting all of your point through credit card offers this bumps you up even higher in the priority.

  • Jeanne_in_NE

    Woo hoo! Piddly butt-in-seat miles trumps card-in-hand miles! Thanks for the answer, Mark.

  • MarkKelling

    – Never been charged a fuel surcharge for UA redemption flights.
    – You can get Lufthansa flights with your UA points.
    – Went many places using UA points (HNL, LHR, CDG, CPH, FRA) at standard redemption during peak travel events (Olympics, Christmas holidays, spring break, etc).

    I won’t lie and say that every time I wanted to use points for a flight I got exactly what I wanted, because I didn’t, but over the years I have saved a considerable amount on international flights by getting business or first seats with my points.

    Even if you don’t fly often, it never hurts to have membership in that airline’s frequent travel program.

  • bodega3

    Yep. I have signed clients up for just this reason. If you have to be reaccommodated, you get priority over passengers who are not members of that airlines frequent flyer program.

  • Tedic

    Do you know of any good guest loyalty programs with decent benefits? Any ideas on one you might switch to? I’m looking around myself.

  • omgstfualready

    They don’t know your points, just you’re in the program and your status. So you are equal with someone that is just a few points behind the next tier up!

  • omgstfualready

    Love my AMEX Blue – I charge everything possible on it and I always do the cash! My mom does the restaurant gift cards since they are at a discount and she doesn’t like to go out much so this helps her out of the house.

  • TonyA_says

    Jeanne,
    You “should” be a member of at least USAir Dividend Miles and Avianca/TACA Lifemiles since these 2 carriers often SELL miles for about 1.5 cents a mile on sale.
    Then when you feel the urge to splurge buy enough miles and treat yourself to a Biz Class seat to Europe or So. America.
    So unless you are gunning for some elite qualification, one of the best uses for FFPs is the ability to get Biz/FC award tickets for cheap.

  • omgstfualready

    Your boss is smart and long sighted. Most would simply lower your travel budget.

  • PolishKnightUSA

    Was the internet “free” on the bill or did you just notice that they didn’t change you for it on the bill? Just curious.

  • Carchar

    It’s like what one hears in the Rx medication commercials. After hearing all of the side effects, who wants to take them? :)

  • Amy Engelhardt

    Still the best airline out there right now, but… :(

  • MarkKelling

    It all depends on what you are looking for.

    I am still a member of the Marriott program. I also belong to the IHG program (they are Holiday Inn, Crowne Plaza, and other similar hotel chains all rolled together). The IHG program works best for me now. I get one room at no additional cost at any of their hotels per year just for having their credit card. I have used these nights in London, Paris, and will use it in Rome next month. Each of these has saved me around $300. I also get upgraded often and get things like free WiFi and breakfasts. Since their hotels are everywhere I want to be, it makes it easy to get their benefits.

    I also belong to most every other hotel program there is. I just have not stayed enough at any of those chains to get any real benefits yet.

  • MarkKelling

    Internet charge appeared on bill along with an offsetting “Rewards Member” discount.

  • AUSSIEtraveller

    so he wants to change from flights they would never fill to flights that always fill.

    Get a life !!!

  • cowboyinbrla

    Southwest’s new program is operates similarly, though ratio of points to dollars (both for spending and redeeming) is different. Also, you get more points per dollar spent for buying a Business Select or Refundable Fare than you get for buying a web special “Wanna Get Away” fare.

    Still, the concept is the same: if you’re redeeming for a cheap flight, then it costs far fewer points than a more expensive flight (unlike legacy carriers and their fairly rigid 25K miles for “saver” domestic roundtrip, no matter what the length, and 50K miles to stand a good shot at getting a seat on a popular route).

  • bodega3

    TACA/LACSA…no thanks!

  • TonyA_says

    What? You don’t need to fly them. You use their FFP to book LH and other Star Alliance Partners. That’s the trick.
    A friend of mine flew FIRST CLASS from Germany to Canada on Lufthansa for about $1.4k in bought Lifemiles. Repeat First Class on LH.

  • bodega3

    No thanks. I stay completely away from anything to do with USAIR, LACSA or TACA. Don’t care if it buying their miles for another carrier. Can’t do it.

  • Justin

    Virgin Airlines lacks a large footprint within the U.S. Limited routes to select major cities. I’m not sure about domestic redemption but international flights rom U.S. to LHR (London incur a $450.00 fee (Taxes / Fuel). Hardly a bargain when you’ve spent $3,000 to earn 15,000 Points at 5pts / dollar.

  • Carver Clark Farrow

    Virgin Atlantic is a different company than virgin America. I don’t know how the programs transfer. But to the rest of the post lacks context. What are you comparing it to?

  • Carver Clark Farrow

    Or you canceled them 2 minutes after you bought them…

  • I basically have the same question as DeForest: What justifies an airline charging ANY fee to redeposit miles into a frequent flier account? What is the real cost to the airline in a situation such as DeForest’s? Wouldn’t they resell the seat his traveling companion would have occupied, and perhaps for a premium “walk-up” fare?

  • Carver Clark Farrow

    Because they can :(

    No further justification is needed.

  • Justin

    Please re-read my post.

    I state: I’m not sure how domestic redemption works. However, international flights from U.S. to LHR are fraugt with taxes. $450 dollars, making the price 50% of a normal fair, after spending $3000 to acquire enough points.

    Virgin America does have a liited footprint compared to domestic airlines. You’re limited to major cities and select routes.

  • Dutchess

    Actually, if you cancel them 2 minutes after you bought them this wouldn’t be an issue since most airlines have a 24 hour cancellation policy.

  • PolishKnightUSA

    Funny, sad and true. But I’ll add some justifications anyway: Because they have to do the work to free up the seat, notify the TSA, reticket (even if electronically) someone else, and finally redeposit the miles into his account. Decent IT labor (me) costs money (unless you’re Target and see how that went?) These transactions have to be sent to a variety of legacy systems, put into punch cards, sent over 1200 baud modem, and then typed by hand. Ok, joking, but it’s non-trivial in costs for them to construct and maintain the infrastructure for these transactions. (Actually, the modem would be SAFER than what target used…)

    I recall Elliott dealing with a case of a Frequent Flier who was nabbed for making a reservation in someone name for a full fare ticket and then cancelling at the last minute coincidentally when that cancellation happened to help him get upgraded due to the seat opening up. There’s NO guarantee for the airlines that the seat gets filled and they gamble, just as we do, that they’ll have enough seats just as we gamble that our non-refundable fare will work out. That’s why these elite flyers nab those empty business class seat upgrades! So I sympathize with them on this. Sure, make ALL seats fully refundable and stop charging more for the “Y” tickets (for those of you who don’t know, that’s the letter designation for fully refundable economy class tickets.) But then we’ll all be paying about twice as much for regular tickets.

    I’ve only had one case where I wasn’t able to make my flight and had to burn a ticket (and if I had known about all the fees, I would have simply chose to take it anyway). Otherwise, I’ve happy with the gambling system. I make the flight. Period. I get to the airport 2 hours early and hang out at a coffee shop and read a book. It’s a small price to pay for a, er, small price.

    I went to Elliott’s recommended sites for travel insurance comparisons. It costs about 20% or so for _full_ cancellation coverage. What a bargain! A “Y” ticket, effectively, for a 20% premium!

  • Bill___A

    You know, flight delays cost the airlines a lot of money, such as overtime, fuel, etc. Maybe they should charge a delay fee when this happens, to compensate them for when they run into these difficulties. And of course, a “maintenance fee” when something breaks, so they can charge that expense and recover it to the exact flight it occurs on. About time those bean counters took some action and held everyone accountable for all of the costs on each flight.

  • Justin

    You can’t fix “Stupid or Inept”, but if there’s a way to pass the fee onto consumers, rest assured we’ll pay the price.

  • Carver Clark Farrow

    No, I understood what you posted.

    There is no Virgin Airlines. There are Virgin America, Virgin Atlantic, and Virgin Australia, three separate airlines with different rules and FF programs. Virgin America uses Elevate, a revenue based program, which is what we were discussing. Virgin Atlantic uses a traditional miles based program for its FF program.

    Virgin America doesn’t fly to LHR, or anywhere outside of Us, Mexico, etc., thus I assume that you are confusing Virgin America with Virgin Atlantic (understandable),hence my comment.

    Where I am confused is the relationship between the FF program and your comment about taxes.

  • Carver Clark Farrow

    lol

    Ok. Lets try cancelled 24 hours and 2 minutes after booking, yet 10 months prior to flight. We can make up any scenario.

  • Dutchess

    Right, you can make up an scenario which is why airlines apply the rule uniformly on all instances (except deaths or certain other extreme instances) and when you buy your ticket you know the rules. You buy a discounted ticket and in exchange you guarantee the airline you aren’t going to change your mind. If you change your mind there’s a penalty. End of story.

  • Carver Clark Farrow

    That’s my point. Your original scenario

    If you bought award tickets and reserved two seats and canceled them
    just before the flight you’ve had two seats locked up that will possibly
    go unsold.

    is just as made up as any other.

  • Dutchess

    No, if you actually read my whole comment, and not use that out of context, you would also note that I follow that up immediately by saying ” This is part of the airline’s yield management fare structure, it was also part of the awards program when they signed up.” so, what portion of my statement that you knew this before you used your award ticket contradicts that?

  • Carver Clark Farrow

    I read your entire comment, please re-read ALL of mine. My response to yours was specifically regarding that one point. You used that scenario as additional justification for the fees, e.g. a “cost”, beyond the fact that the fee is disclosed in the rules. Otherwise the comment would be superfluous. My point is that it works both ways, but the fee is constant. Thus the fee and cost are poorly aligned.

  • Dutchess

    Right, but that scenario was directly related to the OP’s situation and I used this example to highlight the fact that unpredictability was factored into the pricing by saying it was “PART” of the airline’s yield management system, no where did I indicate it was the entire reason for the pricing.
    Just because you’ve decided to be particularly pedantic don’t twist my words especially when your initial scenario wasn’t all that well thought out.

  • Carver Clark Farrow

    I didn’t dispute it was PART of the equation. That’s why I went through the trouble of highlighting the fact that it was additional justification. I’m sorry if you don’t like the fact that your point was well disputed.

    It still remains that the fee is not correlated to any potential detriment to the airline, in particular because fee is truly independent . It doesn’t matter how long the seat his held, the cost of the seat, how close to the flight the cancellation occurs. . By contrast, most hotels rates are fully refundable until the cancellation deadline which is generally a day or two before the arrival time. Why? Because unlike airlines, hotels have true competition and thus cannot impose onerous and burdensome rules.

    I submit the reason for the redeposit fee is the same as a cancellation fee. Because they can.

  • Dutchess

    Just because the fee isn’t variable, therefore it must be arbitrary. Gotcha.

    Actually, your hotel analogy is incredibly poor. Airlines suffer the same inventory problems hotels do. An empty seat on a flight or an empty bed overnight means inventory you can never resell. So, hotels practice the exact same if not more strict pricing models than airlines do. They both allow you to book a non-refundable room and pay less in exchange for a guarantee that your plans aren’t going to change. Need to cancel? An airline charges you liquidated damages, called a change fee, for violating your portion of the purchase agreement. Cancel a non-refundable hotel stay? Well, you forfeit your entire stay. At least an airline lets you recoup some of your cost and pay a modest fee. Keeping that fee standard across the board keeps it simple, otherwise this would be an accounting nightmare.

    Airlines have a vested interest in knowing who’s going to be on their flight as early as possible. This fee is part of that plan. Like it or not, if you didn’t have this fee your flight would be more expensive.

  • bodega3

    Your last line is a good one. People forget that airfares have not kept up with inflation. Why is that? They are making it up elsewhere, just like cruises are doing, too. We get hooked on low fares, but some how the cost of operating a flight has to be paid . Same as for hotel costs.

  • Carver Clark Farrow

    You’re creating scenarios from whole cloth.

    It’s not that the fee isn’t variable that’s the issue. A fair reading of my post couldn’t possible lead to that conclusion, ergo…

    As I stated in excruciating detail, its the incredible lack of correlation that’s the issue.

    As far as hotels go, you are being disingenuous once more. I cannot believe that you are seriously claiming that hotels have stricter pricing models than airlines. When you compare apples with apples, i.e. the fares that most people who pay for their own travel book, it becomes a truly amazing statement.

    Hotels offer a real choice whether to book a refundable rate or not. Few people who pay for their own travel can afford to book a fully nonrefundable airline ticket given the huge cost differential. As a practical matter, most of us are booking non-refundable airline tickets. By comparison booking a non-refundable hotel rate is a deliberate choice by the traveler, rarely to save an integer multiplier.

    Once again, comparing the rates/fares that most of us book in real life, even if you miss the hotel cancellation deadline, you are only on the hook for one night with most rates. Do that with an airline and the entire flight is forfeited.

    And of course, if the airline involuntarily downgrades you, it prices the new ticket at the highest possible price thus making your refund lunch money.

    Moreover, unless you are an uber-elite level guest, it is impossible to avoid a redeposit fee with an award booking, unlike a hotel which rarely, if ever, has a redeposit fee for an award booking.

    Thus to suggest that hotel policies are stricter than airline policies is beyond belief.

    But we agree on one thing. Its part of the plan and so we just have to suck it up.

  • Dutchess

    “As far as hotels go, you are being disingenuous once more. I cannot believe that you are seriously claiming that hotels have stricter pricing models than airlines.”

    Uhm, When was the last time an airline charged you more than your reservation when you canceled? Never. If you cancel the worst you’re out is the amount you paid for your reservation. If you’ve ever stayed at a W Hotel, they can charge you the rack rate for the room if you no show on your confirmed reservation, even if it’s more than your reserved cost. It’s written in their policy. So, please tell me once more I’m being disingenuous. Remember we’re talking about PREPAID Rates here. It’s very fair to compare them to refundable rates now is it?

    Every industry has its problems, I find it disingenuous to say they charge a fee “because they can” when there are legitimate business reasons for having a penalty in place. Do I like the penalty? No. Do we have to like it? Nope

  • Carver Clark Farrow

    Why aren’t the comparison appropriate? Because booking a prepaid rate at a hotel is a deliberate choice by the guest, whereas most passengers do not feel that there have a choice but to book a nonrefundable rate and hope for the best. One can easily avoid a prepaid hotel rate. Not nearly as easy with an airline. Thus theory and practice depart company. The operative word being reasonable choice.

    Perhaps the W has the rule, I do not know, but the vast majority of hotels do not, and we’re talking about what is customary, not the outliers. I do agree that in one area where hotels are more restrictive than airlines is that when you no show an award reservation all hell breaks loose.

    However, on balance airline policies are far more restrictive.

    Non-refundable as the norm
    Back to back ticket prohibitions
    Hidden city prohibitions
    Rate integrity rules
    Pricing models which seem akin to witchcraft
    Non-transferable
    Redeposit fees
    Capacity controls
    Godlike powers of the crew

    and the list continues.

    I agree every industry has problems. When an industry exhibits monopolistic behavior, those problems become amplified because the normal market corrections which limit the excesses of business are reduced or may disappear completely.

    Regarding penalties, and I agree, that is exactly what it is, penalties are disfavored in law for a host of reasons. To justify one, there needs to be a close correlation between the penalty and the business reason.

    I read somewhere that the average airline ticket costs $300ish. If we accept that number, the penalty is about 1/3 of the value of the ticket. Of course, as airlines are highly regulated, they get a pass from the normal rules.

  • Dutchess

    Because prepaids are designed to be non-refundable and we’re talking about a non-refundable fee. You could start comparing it to the price of tea in china next. Just because the margin is smaller between the two, does that mean a hotel or airline is any other less justified?

  • Carver Clark Farrow

    Let’s leave the snark to Raven. Neither of us is particularly good at it.

  • Dutchess

    Speak for yourself.

  • pdeforest

    One key point I want to make is that the airline treated the redeposit fee as two separate transactions of $100 each. Yet when I booked the flights it was one transaction, and when I checked the itinerary it was one transaction. It was the arbitrary nature of this that was most upsetting, especially when this program is intended to attract my business. It just reinforces the fact that the airlines can basically do whatever they want to you; it doesn’t need to make sense, act as an incentive, or even reflect their costs. They have lost me (and my staff) as a revenue source, from now on. Whiner or not.

  • pdeforest

    It is always funny when people make assumptions about you. I’m actually a 2 Million Miler on one airline, have traveled regularly on business for over thirty years, and have influence over a substantial annual travel budget. We were growing our business on Virgin America, until this point. Too many airlines just view you as a transaction, and don’t consider the overall scope of the relationship, or the potential of gaining more of your business. You can maximize the economic benefit of an individual transaction and miss out on all the hidden, but still real, lost revenue opportunities of losing a customer and the business that customer controls and influences. A satisfied customer tells 10 people; an unhappy one tells 100. A good marketer understands this. A bean counter doesn’t. Do you think the negative press from this story lost Virgin more than $200 in revenue? I’d say so.

  • Carver Clark Farrow

    I’d agree with you except that airlines, unlike most businesses, operate in a near monopoly. This perverts the normal corrective market forces. How many business transactions do you normally conduct which results in as miserable an experience as flying?

    I too fly out of SFO, but there are only three airlines which fly nonstop to Vegas. It you ditch Virgin, that leave United and Southwest. Someone else will get pissed at United and switch to Virgin.

    So, I must conclude that no, this sort of negative publicity has little or no impact on airlines. Think Spirit.

  • TonyA_says

    While it might look to you as one transaction or one reservation, each ticket is a transaction. Hence, just like with change fees on paid tickets, each award ticket will be charged a fee unless you are a high level elite member who gets to waive redeposit fees for some FFPs.
    While it is certainly your right to be pissed at Virgin, all you are really doing is cutting off one of the best domestic carriers in your region and possibly getting in bed with United.
    I wonder what they would do for you under the same circumstances?

  • BMG4ME

    This is why it’s so important if you are a frequent flier to build a relationship with your favorite airline, as you would not have to pay a lot of those fees. Obviously if you rarely fly then it won’t help, on the other hand if you are paying $320 for a round trip between the East and West coasts as I did recently, they probably need those junk fees to stay in business. Nothing comes for free.

  • pdeforest

    The business that Virgin lost from me and my company goes far beyond direct flights between SFO and LAS. They’ve lost all of our transcon business, where there are more options.

  • bodega3

    All because they charged you a fee that was part of the program you agreed to when you used your miles for that trip? You move from Virgin, someone else will go to them because UA ticked them off. It all evens out.

  • Carver Clark Farrow

    Sure, but the reality still remains. With such limited competition, consumers have relatively few options. There will be someone who gets pissed off at another carrier to take your place.

    It’s unfortunate, but true.

  • pdeforest

    If this was truly one transaction, then why do they take the points out of the account in one amount, and one transaction, but want to charge two separate transactions to put them back (again in one amount and one transaction). Isn’t it convenient to define the term of a “transaction” to maximize charges to customers? And isn’t it strange as carriers take away more and more of the things that used to be “free”, some people defend this behavior as reasonable? Remember the story of the boiled frog, it sat in the pot as the cook slowly raised the heat until it was cooked. How long before we have pay toilets, metered oxygen, and extra charges for seat belts?

  • pdeforest

    No. It was “all because” they chose to charge me a cute little double-fee that was worth almost as much as the miles themselves, when someone, behaving as a human being, actually got sick and couldn’t travel. I love the legalistic mentality that believes a business relationship is all about what’s in the contract. My perspective, based upon many years of dealing with customers and contracts, is that contracts represent the MINIMUM level of customer service, and exceptions can always be made in exceptional situations. In fact, how you deal with exceptions defines the quality of your service, and whether you retain and build relationships. Or you can treat your customers like cattle, as many apparently expect.

    I doubt there is anything in the contract of carriage preventing someone from traveling with a cold. Would you like to sit next to that person? It’s legally permitted after all. So when someone is sick and doesn’t feel up to traveling, your approach would be to make them travel or lose the points/cash. Virgin clearly doesn’t care how many passengers get sick because of such a policy.

  • pdeforest

    I would turn your argument on its head a bit, especially for a relatively new airline that’s trying to grow. Instead of a “race to the bottom” in terms of customer service, how about trying to exceed expectations once in a while, or behave like a human being? Think about the positive press that would create? Remember the people at WestJet in Canada this Christmas, who went out and got presents for their passengers on one flight? It got attention World-wide.

    The first time I flew Virgin Atlantic years ago, and experienced Upper Class and the Heathrow ClubHouse, I was so impressed that I wrote Branson a letter. He responded with a nice signed note a few weeks later. I was so impressed that I never flew BA again to London.

    A few years ago, my Wife and I flew to Hawaii on Delta, in coach using miles. While waiting for the return flight, I was paged, was thanked for my loyalty and we were upgraded to First Class at no charge. Think about what that did to my feelings of about Delta?

    I don’t expect THAT kind of treatment any more. I would just settle for being screwed just a little bit less often. How many times do we get screwed when we travel these days? Mechanical problems what magically become “weather-related” or air traffic control? Getting stranded thousands of miles from home and just being offered a refund of your return airfare? Getting lied to constantly during delays so that you don’t try to book other flights? Or like Virgin America, putting in a new website and reservation system that screwed up passengers for close to a year! I don’t see anything in the contract of carriage about being unable to perform any travel function without spending multiple hours on a phone, or standing in endless lines at the airport. This was the reality we had to suffer through, not that long ago with my friends at Virgin America. So when I ask them to cut me a small break, and not “pile on” as usual, I get the usual call center screwjob.

  • bodega3

    Buying a ticket with restrictions is always a risk. You chose to travel with your miles and the rules were there BEFORE you decided to use those miles for the reservations. You could have insured your risk, but most don’t because they usually don’t want to pay any more money out and usually nothing happens to keep them from traveling. But when they do have to cancel, then they are up in arms. I have sold airline tickets for decades and believe me, I know that nobody reads the rules until they are faced with losing their money and then are shocked at what they faced with in fees. Most carriers have a redeposit fee for miles.

  • TonyA_says

    Feel free to understand airline rules your way.
    But if you want a true description – the transactions are PER TICKET since tickets are issued individually.

  • pdeforest

    My response to all these comments like “he was given the information on how the program operates”. Here, from their website, is the list of Virgin America’s fees. http://www.virginamerica.com/vx/fees. Please note that while they talk about these fees at the “reservation” level NOWHERE do they mention that any are per-ticket charges. Really, how hard would it be to add the words, “per-ticket” to each box?

    Since these web pages are carefully crafted by teams of people, including marketeers, accountants, and lawyers, I would suggest that any ambiguity is INTENTIONAL, for the same reason that many websites quote travel costs before fees and taxes, to make them look cheaper than they really are. I’m sure someone will say that there is a more detailed document hidden somewhere in a single-spaced page, in the bowels of the website somewhere, and my response (like the common legal interpretation) is, what would a reasonable person think? A reasonable person wouldn’t expect a round the World flight for $5. But would a reasonable person expect to pay a mileage re-deposit fee on a per-ticket basis, when that was not noted on the fee chart? I would think not, especially as everything on the chart is noted to be at the reservation level. It’s disingenuous to say the least, industry apologists notwithstanding.

  • bodega3

    If you have two names in a PNR and you cancel your reservation that is a nonrefundable fare, you pay a change fee PER TICKET to reuse the fare with the airline that charges these fees. It isn’t per reservation. If you upgrade on a UA ticket from SFO to HNL, you use your miles per ticket and you pay a per passenger additional fee for those upgrading. If you need help with future company travels, consider using at travel agency that handles corporate travel. They can assist you will all the details that you don’t know about. If you travel as much as you do, then consider the $100 a fairly inexpensive lesson.

  • Carver Clark Farrow

    I appreciate your anecdotes,and I agree that it would be nice, but as a business person you also understand that they weren’t particularly relevant. Except for the website/reservation system, nothing was Virgin specific. As such, what incentive does any airline have to deviate from the playbook? Equally importantly, what reason should Virgin make an exception for you as opposed to anyone who cancelled an award trip.

    The reality remains that on any given route, there are likely relatively few flight options. And it’s been demonstrated that except for high tiered passengers, passengers value low base fares above all else, so that’s what we get as the default; poor service, crappy seats, and onerous rules designed to punish us if we deviate from our original itinerary even one bit.

  • pdeforest

    You have an unusual habit of responding to my posts with entries that essentially ignore the main point of each. I haven’t participated in this site long enough to know whether that is your standard practice, but the evidence is heading that way. I do note that you increase the level of snark with each one. That seems pretty pointless to me.

    Chris’ website is about consumer travel issues. Apparently he felt in enough agreement with me that these are junk fees to write an article about it, using my experience as an example of that. I guess from your perspective he’s pretty ignorant about travel as well.

    My goal was to explain why I felt the treatment I received was unfair, and backed it up with facts (which you tend to ignore). I would be willing to bet that the majority of readers would not want to be treated as I was.

    I’m not interested in writing a blog. Perhaps you might consider applying your talents in that direction, as I for one, have lost interest in tangential non-responses and justifications for bad industry behavior.

  • This is actually an ongoing problem, and I’m sorry you’ve been dragged into it. I write a consumer advocacy site. When consumers feel they’ve been wronged by a company, I get involved, as I did here.

    People often mistake this for an airline blog, and they expect me to have an insider-level knowledge of how an airline operates. I have a fairly good understanding of the airline industry, but I never claimed to be an insider or a travel agent.

    My focus is with you, and your negative experience with Virgin America, which is exactly where it should be.

  • bodega3

    I am pointing out how fees work, which you don’t seem to understand. Which is why you probably should use a professional to assist you and your business with future reservations. Tickets have a per person fee, not a per reservation fee. Plain and simple. What Tony and I have noted, it that while you might think these are unfair, they were part of the program you wished to participate in and since you never encountered a cancellation on miles use before, you never paid attention until this happened. The bad behavior often comes from the passenger when they think they are right without regards to the rules of the fare or use of their ticket. Sorry if you find my posts to be snarky, as that isn’t the intent. I have sold airline ticket for decades and know that most people don’t pay attention to rules until they have to deal with the restrictions.

  • bodega3

    An ongoing problem? Really? The OP was dragged into this? Hardly.

  • pdeforest

    96% of the more than 1000 people who responded to the survey above voted that airlines have gone too far with junk fees, this one being an example. The numbers speak for themselves about how consumers feel about this, and referring to reasonable dissatisfaction as mere “whining” seems to miss how consumers feel about this sort of thing.