US airlines drop change fees for domestic flights
US airlines ditch change fees for flights in a bid to win back more costumers; while Qatar Airways has announced that it will have to drastically reduce its number of international passengers travelling to Australia
Despite earning US$625 million in change and cancellation fees last year, United Airlines has announced that it will no longer be charging customers to change their tickets. Just shortly after declaring the new development, Delta Airlines and American Airlines have announced that they are to do the same. In line with the new regulations, Delta, United and American have all permanently dropped the $200 change fee on all domestic tickets (US), as well as some short-haul international flights.
“American is offering more flexibility and ease than ever before, should travel plans change. 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, we’re giving customers the freedom to make their own choices when traveling with American,” said American’s Chief Revenue Officer Vasu Raja; while Delta CEO Ed Bastian noted that the company’s announcement offers ‘industry-leading flexibility, space and care’ to its customers.
This monumental decision could cause a seismic shift in the way airlines conduct their business. Now that the ‘big four’ airlines, which account for more than 80 per cent of US domestic air travel, have eradicated their change fees (Southwest being the fourth largest, and has never charged change fees), other smaller airlines will need to do the same to keep up with the competition, and especially at a time of Covid-19 travel uncertainty and drooping customer confidence – anyone familiar with Travelport’s latest findings will recognise the prominence of these airlines offering flexible tickets for prospective travellers at the moment.
The Bureau of Transportation Statistics revealed that the industry's total take of change fees in 2019 was $2.8 billion. Putting away $830.2 million in change fees in 2019, Delta collected more than any other US carrier, and American wasn’t too far behind with its $818.7 million in change fees. And, in addition to waiving the change fee, American has also announced that travellers who change a flight will receive a credit for any fare difference if the new flight is less expensive than the original. This may all sound like a big gamble, but having already been severely hit by the global restrictions brought about by Covid-19, no doubt airlines have weighed up their options.
“When we hear from customers about where we can improve, getting rid of this fee is often the top request,” commented United’s CEO Scott Kirby. “Following previous tough times, airlines made difficult decisions to survive, sometimes at the expense of customer service. United Airlines won't be following that same playbook as we come out of this crisis.”
Industry experts also noted that with business travel at an all time low, airlines are clearly doing their best to retain as many leisure travellers as they possibly can. “Even if you want to travel on business, I'm not sure that corporate clients want you in their office,” Helane Becker, airline analyst at Cowen said. And industry consultant Michael Boyd noted that airlines want to retain as much traffic as they can from people who are ‘otherwise willing to hit the Zoom and Skype button’.
In other news, and due to a cap on international passenger numbers travelling to Australian destinations (the country is now only accepting 4,000 international arrivals a week, including its own citizens), Qatar Airways has asserted that it can only carry a limited number of passengers per day to all of its Australia destinations.
While Qatar Airways insists that it has been doing its upmost in assisting the repatriation of stranded Australian nationals back to their home countries, due to the ‘increasingly challenging’ repatriation operation, it is only currently able to work on clearing its backlog of bumped passengers, 30 to 50 passengers per flight.
“Many disappointed passengers are unable to travel as per their travel plans,” Akbar Al Baker, CEO of Qatar Airways Group said. “Given the restrictions, we cannot accommodate these passengers on an alternative flight the following day, where we face the exact same issue to the problem continues to grow daily.”
Al Baker added: “We have always maintained that we have a long-term commitment to Australia and our support to Australian passengers will not waiver despite the challenges of Covid-19. We will continue to work within the limited traffic rights framework granted by the Australian government and remain ready to operate as many flights as possible to bring stranded Australians home.”