On March 20 I wrote that American would be eliminating free 24 hour reservation holds on April 1 and switching to 24 hour refunds instead.
American reached out to tell me that wasn’t accurate, they were still considering the change and would provide advance notice before putting it into effect if they adopted it.
There is not a final decision on this. Moving to refunds instead of a hold policy is something we are looking at, but it has not been decided.
There are some issues and implications we need to sort through before we do anything – which may be nothing at all.
There are some emails and meetings about all of this, and it looks like someone was eager to share the news.
If something officially changes, we will let customers know in advance. Nothing has been decided as I write this at 7:32am on Monday.
It turns out though that my first post was accurate, as American spokesperson Joshua Freed confirmed to me today:
- They are making the change
- It does go into effect tomorrow, April 1 after all.
The US Department of Transportation requires US airlines to offer either the ability to hold a reservation for 24 hours without ticketing, or to allow full refunds on non-refundable tickets for 24 hours after purchase, for travel booked at least 7 days in advance.
For years and long before this DOT requirement American has allowed consumers to place reservations on hold. It’s not something they were forced to do.
Other US airlines offer 24 hour refunds, not the hold option. So some find American’s policy confusing since they actually compete by offering their own differentiated policy. I like the hold option better than cancelling, not having to put down a credit card and make payment and then track to make sure a refund actually posts (and follow up if for some reason it does not).
Effective April 1, American will offer refunds instead of holds.
- They will not ‘conform to the rest of the industry’ though, they will conform to DOT requirements only. Unlike United and Delta, 24 hour refunds will not be offered for purchases made within 7 days of travel.
- While the policy is 24 hour refunds, in practice refunds will be available until 11:59pm the following day.
- Even though the policy changes April 1, free holds at AA.com will not disappear right away. It will still be possible to hold paid reservations online using the American Airlines website for some period of time. It will not be possible to do this via American’s call center. For as long as holds remain available at AA.com, you actually get both — American’s policy is 24 hour refunds, so you should be able to hold a reservation online, ticket it by midnight the next day, and then cancel by midnight the following day.
The change to no longer offer a 24 free hour hold option will not affect the sale of extended holds. And this does not affect placing awards on hold.
“If something officially changes, we will let customers know in advance.”
Oh, really?
As someone who books mostly last minute, their decision to not allow refunds for tickets purchased inside of 7 days sucks. They are trying hard to push me back over to UA.
I had the same first thought as AZtravel but after realizing they intend to continue to offer the option to hold for 24 hours concurrently with refunds for a bit this is better than advance notice IMO.
They are giving us plenty of time to acclimate to the new policy as well. I am also relatively confident it will stay that way until the system can support basic automated refunds (i.e. Refunding full value of the trip).
United’s idea of a small, non-refundable fee to hold an award seat for a period of days was brilliant. AA should copy that and apply it to cash reservations too.
Looks like the boys at AA are getting bored and running out of ideas. I’m quite confident that this has to do with attrition rates on tickets that are held and not purchased, which is something the MBA guys care about more than anyone else.
@Doug – There’s no hold option within 7 days of departure now, so nothing’s changing on that front. They haven’t offered refunds within 7 days in some time (perhaps a year?). Use an OTA (and be sure of its policies on the matter) if you want special treatment different from AA’s policy. Perhaps someone here can recommend a good OTA that issues refunds within 24 hours even within 7 days of travel…
@NSX – they do. Gary mentions as much. See the last few lines of this post.
Seems like someone trying to fix something that isn’t broken. All these little things are why I like AA. If they change enough of this they will be “just like every other airline”.
I prefer refunds over holds for the simple reason you don’t need to plan ahead, and you don’t need to circle back and ticket once you confirm. It’s a hedge against mistaken bookings and against *unexpected* changes where holds are really only applicable for anticipated changes in plan.
The lack of anything inside of 7 days is a significant competitive weakness and has the potential to push my business elsewhere.
Agree with @Matt above, plus who even knew you could place a ticket on hold when making a phone reservation? Or how about being unable to place a ticket on hold if it contained a connecting flight on another airline? And how about when purchasing from Expedia? Lots and lots of people were confused by AA’s overly complex policy.
When a “differentiated policy” is inferior, it’s best junked. But fear not, AA’s differentiated coffee is staying so you can write about the virtues of differentiation (but — I am so confused — weren’t you advocating that business class is only about the seat, implying that differentiation was worthless? Make up your mind!)
I seriously question if AA can make this change work. I’m still awaiting a $40 refund from June of 2015 of a mistaken EXP agent charge when I booked a QR award to Maldives.
American Airlines has the worse customer service. I am still waiting for the mistake an agent made for charging me twice for taxes on an award ticket MIA-LAX-PPT (Tahiti) two years ago. She threatened me to cancel my flights which she did at MIA airport. I had to beg her to rebook me and pay again, although I had already paid once. I find people that work for American Airlines super arrogant and rude including most of their Flight Attendants. A very unprofessional organization.