A year after the major airlines tightened their notoriously stingy policies on cheap, nonrefundable tickets, they're backing off and loosening the rules.
American Airlines, the world's largest airline and a unit of
, became the first to change last week, saying that customers who alter their domestic travel plans will be given a year to use the value of their ticket -- provided they call and cancel before the flight departs and pay a $100 service fee. In the week since, nearly every major network carrier has followed suit. Only U.S. Airways, the first to institute harsher penalties last year, has yet to change its policy.
The new policies are a marked shift -- and one that may have as much to do with the current state of operations at the network carriers as with customer complaints.
The sea change in ticket policies comes after airlines
last year instituted draconian measures designed to make expensive refundable tickets more attractive to business travelers, who were using cheap Web-only deals for business trips. Under the old policies, a customer with a last-minute change in travel plans would not only have to pay $100 to change the ticket but also would have to immediately rebook travel plans or lose the entire value of the fare.
"Basically, this is directly in response to our customers," said Tim Wagner, a spokesman for American Airlines. "It became obvious that they were not enamored of the previous policy, because they didn't know right away when they were traveling again. For example, if someone fell ill, it was not easy for them to immediately say they would be traveling next Friday. This gives them the opportunity to change plans without incurring a second or third change fee."
Indeed, the strict policies made network carriers look bad at a time when low-cost carriers were profitable and gaining market share. Generally speaking, low-cost carriers have historically been more customer-friendly, charging little to change tickets. Indeed, on
, travelers pay nothing to change a flight, and they don't have to call ahead and cancel.
Unmaking a Mistake
"Traffic loads appear soft heading into the fall, and the network carriers are trying to do things to help out and also be a kinder and gentler group of airlines," said David Stempler, president of the Air Travelers Association. "They still find themselves being distinguished between low-cost carriers in the public's mind. This removes some of that."
Also, with a seasonal slowdown in travel coming in autumn, airlines are working to gain better control over their inventory after a busy summer. In July, load factors, or the percentage of seats filled on every flight, reached 85% at some of the network carriers, which are using the new policy to better manage crowded gates instead of blindly adding back capacity.
"The only reason we ask customers to alert us
when travel plans change is to better manage the inventory and resell the seat," said American's Wagner. "Our systemwide load was 81% in July, and on certain flights we were at close to 100% load. If a person on a full plane just lets us know ... we have that open seat to put in inventory."
Ultimately, the change in policy shows that the airlines may have made a mistake last year and that lucrative business travelers may not return to the skies as previously hoped. Over the last year, there has been no appreciable pickup in business travel, even though business fares have fallen year over year.
"The old policies didn't work," said Stempler. "Clearly, if it was working, they would have kept doing it. Airlines have tried other thing ... to get business travelers to buy more expensive, full-fare tickets. And nothing seems to be working."
Meet the New Policies
While the new policies differ from airline to airline, they all work in similar ways. If you're going to miss a flight, you usually need to call ahead and cancel. Then, after paying a service fee, you'll get one year from the time the ticket was purchased or one year from the flight's departure time to rebook your travel plans.
But there are some important distinctions among carriers, especially when it comes to fares bought through Internet travel firms such as Orbitz.com, Travelocity.com and Expedia.com. Some carriers don't give you a grace period on Web fares.
Of the network carriers,
policy is the most lax, granting a grace period for any flight, regardless of where the ticket was purchased. Most carriers are in the middle ground, with policies that cover nearly every Internet fare, except for deeply discounted opaque fares or Web-only weekend getaway specials. And
is the strictest, with a policy that covers only tickets bought through Delta.com, FlySong.com or a Delta partner site.
"Basically, a customer who used Orbitz would have to deal directly with them on this issue," said Katie Connell, spokesperson for Delta Air Lines.
The reprieve from onerous policies has drawn mixed reviews from travel advocates, however. For one, airlines continue to charge as much as $200 to change a flight plan. Also, another round of new regulations will only lead to more confusion for customers, who are now paying for everything from food on the plane to walking in with an overweight bag.
"There is still this 'no waivers, no favors' policy still in effect, though. You used to be able to walk up to a gate and ask to be put on the next flight and they'd say no problem," said Christopher Elliott, editor of TripRights.com, a consumer travel Web site. "That's still not the case. They're going to stick it to you, and you're going to be out at least $100."