United Airlines (UAL) - Get United Airlines Holdings, Inc. Report is waving bye-bye to the controversial $200 ticket-change fee it and many other airlines have made commonplace in an attempt to lure fliers back to the skies amid the worst slump the industry has experienced in its lifetime.
The Chicago-based airline announced that it will no longer levy the $200 change fee it charges to switch up domestic flights, and that beginning next year customers can fly standby for free if there’s an available seat on the same day as their previously planned flight.
The decision brings United more in line with rival Southwest Airlines (LUV) - Get Southwest Airlines Co. Report, which has never charged customers to change tickets, and is likely to pressure Delta Air Lines (DAL) - Get Delta Air Lines, Inc. Report and American Airlines (AAL) - Get American Airlines Group, Inc. Report to change up their own fee structures.
“When we hear from customers about where we can improve, getting rid of fees is often the top request,” United CEO Scott Kirby said in a video message to customers. “Following previous tough times, airlines made difficult decisions to survive, sometimes at the expense of customer service. United Airlines won’t be following the same playbook as we come out of this crisis.”
The move comes as airlines in the U.S. and globally delve deep into their playbooks to see what they can do to both keep themselves aloft and get people traveling again, including re-examining added costs such as change fees, luggage fees, carry-on bag fees and other charges that until the pandemic had become the norm in air travel.
It also comes as airlines struggle with keeping their employees on the payroll amid still-reduced flight schedules and a significant drop-off in demand.
American last week said it will cut 19,000 workers once federal aid expires Oct. 1, capping a 30% workforce reduction since the coronavirus pandemic began. American was the first major carrier to disclose how much it will shrink operations as it adjusts to passenger numbers that are down 70% from last year, according to Bloomberg.
In an attempt to boost its own leisure-passenger traffic, American said it was adding 24 seasonal routes from cold weather cities to warmer destinations, including flights to Miami, Phoenix and Mexico. Most of the routes will operate on Saturdays.
Shares of United were up 0.21% at $37.42 in trading on Monday, while shares of American were up 0.22% at $13.62. Southwest shares were down 0.8% at $38.50, and Delta shares were down 0.63% at $31.79.