And those fees will vary based on how far in advance you book your tickets and on the price of those tickets.
Change/Cancel Fee Amounts – Effective May 17, 2013
Changes and cancellations made 60 days or more prior to departure date:
$75 per person fee
Changes and cancellations made within 60 days of departure date:
$75 per person fee for fares under $100
$100 per person fee for fares between $100 – $149
$150 per person fee for fares $150 or more
*Note: Customers who booked their reservation prior to May 17, 2013 will be allowed one change or cancellation at the previous fee structure – $100/per person or $50/per person for fares under $100.
The structure actually does make some sense, but I bristle at how Lucky thinks about change fees.
As a consumer this has been extremely aggravating to watch, because change fees in no way reflect the cost of providing that service. We might not like paying for checked bags, but at the end of the day we can rationalize the fact that checking bags costs the airline money.
I actually think the exact opposite.
We pay for checked bags in large measure because of the 7.5% federal excise tax on airline tickets. Anything you can get out from under the ‘ticket price’ isn’t subject to that tax.
There are many ancillary fees that are about pricing a limited resource that used to be given away for free. There are only so many exit row seats on a plane, so charging for those since people like them better makes sense.
But offering checked luggage comes with substantial fixed costs but very low marginal costs (some incremental fuel due to weight, but the number of baggage handlers don’t change much based on how many bags you check).
Checked bags ‘cost the airline money’ but don’t really at the margin which is why I’d expect (absent the tax distortion) checked bags to be more likely bundled into ticket price than most other things in the future. And of course American bundles them with their Choice fares now, and many airlines bundle them with co-branded credit card signups.
Meanwhile change fees do reflect ‘a cost of providing that service’ at least as travel dates approach — which is why JetBlue’s fee structure makes so much sense.
If I book a ticket 11 months out, and change it, the airline loses more or less nothing but I have a hefty change fee. They still have every opportunity to re-sell the seat.
But if I cancel my reservation the day of travel that’s a seat which may go empty, that the airline could otherwise have sold sometime between when I made the purchase 11 months earlier and the date of travel. A high change fee certainly seems appropriate (the ‘cost of providing the service’ is the real possibility of ‘revenue foregone’).
Now I remember when change fees were $25, $50, and then $75. With that frame, $150 seemed ridiculous and $200 ludicrous.
On the other hand I’ve often wondered why restricted, non-refundable airline tickets are changeable at all? I’ve certainly seen international fares published that allow no changes, and that cancelling offers no residual value. We buy plenty of things that we cannot return, that are use it or lose it.
Those often are at least transferable, and for which there’s at least a grey market in resale, while ‘security’ rules only allow us to travel under our own names and so tickets become non-transferable.
Ironically, when JetBlue first launched their travel credits were 100% transferrable. The change fee was $25, so if you cancelled a ticket you lost only $25 in value and anyone could use that remaining value. (A dozen years ago as well, SAS tickets were transferrable for a $25 fee — you could change the name on a ticket to someone else’s — provided that you signed a form that the tickets were for personal rather than business use.)
At a US major airline standard of $200 change fees on domestic tickets, that might as well make many tickets totally non-changeable and thus just throwaways if unused for me, at least when I’m buying one-way tickets.
If there was an economic reason for airlines to offer non-refundable tickets with residual value, the $200 change fee does away with a good bit of that. There might be some point at which the change fee is so high that it hurts the airline.
Of course the existence of residual value could itself have been a relic, and we’re entering a future where restricted tickets have no residual value at all.