Aug 31, 2020
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That didn't take long: Delta, American join United in ditching $200 change fee on US flights
Delta Air Lines and American Airlines have joined rival United Airlines in ditching onerous change fees for U.S. flights.
As with United, their policies eliminate the $200 change fee on domestic tickets except for the airlines' basic economy tickets, no-frills fares with a pile of restrictions including no changes or cancellations. However, change fees are waived on even those tickets on both airlines through the end of the year due to its more flexible COVID-19 travel policies.
“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,” Delta CEO Ed Bastian said in a statement. “We want our customers to book and travel with peace of mind, knowing that we’ll continue evaluating our policies to maintain the high standard of flexibility they expect.”
Before the coronavirus pandemic, Bastian and other Delta executives were dropping hints that the airline was going to change its change policy. Southwest has never charged a change fee.
American Chief Revenue Officer Vasu Raja said the elimination of change fees, along with the new option to standby for another flight on the day of your flight for free, is designed to help travelers in a changing travel environment.
"American is offering more flexibility and ease than ever before, should travel plans change,'' he said in a statement.
Unlike United, American said travelers who change a flight will receive a credit for any fare difference if the new flight is less expensive than the original.
Delta, American and United will be leaving a lot of money on the table when travel rebounds. Delta collected $830.2 million in change fees in 2019, more than any U.S. carrier, followed by American at $818.7 million and United at $625 million, according to the Bureau of Transportation Statistics. The industry's total take was $2.8 billion.
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The beginning of the end of airline change fees? United is ditching them for good – with a major catch
Airlines regularly match each others' fares and fees in the ultra-competitive industry. When United raised change fees by $50, to $200, in 2013, its major competitors matched within weeks.
Airline analyst Joseph DeNardi of investment firm Stifel said in a report Monday that he expected United's rivals to match for competitive reasons.
"On a scale of competitive actions with 1 being benign and 10 being nuclear, we view United's announcement as somewhere north of a 5 given that it's likely to result in escalation,'' he said.
DeNardi said he thinks one of United's motives in being the first airline to eliminate the $200 fee was to put pressure on financially weaker American.