• Home
  • Reviews
    • Flight Reviews
    • Hotel Reviews
    • Lounge Reviews
    • Trip Reports
  • About
    • Press
  • Contact
  • Privacy
  • Award Expert
Live and Let's Fly
  • Home
  • Reviews
    • Flight Reviews
    • Hotel Reviews
    • Lounge Reviews
    • Trip Reports
  • About
    • Press
  • Contact
  • Privacy
  • Award Expert
Home  >  Analysis  >  Will The Death Of Change Fees Cause Airline Bumps To Surge?
Analysis

Will The Death Of Change Fees Cause Airline Bumps To Surge?

Matthew Klint Posted onJanuary 29, 2021January 28, 2021 5 Comments

In a huge and unquestionably positive development for travelers, major U.S. airlines have eliminated change and standby fees. Will a practical effect of this new policy be an uptick in oversold flights and airline bumps?

In This Post:
  • Light Airline Loads Are A Present Reality, Not A Future One
  • An Environment Ripe For Overbookings
  • Overbookings Still Make A Great Deal Of Sense
  • New DOT Rules Tighten Consumer Protections For Oversold Flights
  • CONCLUSION

Light Airline Loads Are A Present Reality, Not A Future One

Despite dramatically reduced schedules, we are in an unprecedented era of light loads. Certainly, flights still go out full from time to time. But for nearly a year now, I have not been on a full flight. In fact, the majority of my flights have had more EMPTY seats than occupied seats.

With a gradual rollout of the COVID-19 vaccine and broad travel restrictions (both government and corporate) in place, I expect light loads well into the summer and perhaps even longer.

Still, airlines are getting better at gauging demand and whether travel returns to pre-pandemic levels or not, airlines will improve at matching capacity with actual demand. Either way, don’t expect empty flights indefinitely.

An Environment Ripe For Overbookings

But U.S. airlines have created an environment ripe for overbooking. Think about it. Prior to the pandemic, if you wanted to change your flight you’d be hit with a fee of $200-400 plus any fare difference. Even same-day standby cost at least $75.

Consequently, passengers were not incentivized to make changes to their tickets. That left airlines less aggressive in overbooking flights, as the disincentive of change fees drove many to take their originally planned flights.

But when travel demand eventually returns and flights fill up again, airlines will have to reckon with the fact that consumers can now cancel their ticket up until departure and retain the full value to apply toward a future flight. 

One byproduct of this flexible policy will likely be an uptick in last-minute cancellations by customers. With no money to be saved by cancelling early and the potential benefit of a flight delay or cancellation leading to a refund (versus future travel credit), I forecast that last-minute cancellations will swell.

Overbookings Still Make A Great Deal Of Sense

How should an airline plan for that? Overbooking flights has always been a business decision reflecting chance. It is grounded in solid statistical analysis that a certain number of passengers on an aircraft will not show up. By selling four extra seats by banking on four people not showing up, an airline increases its revenue. 

Of course models just predict and outliers arise. Enter voluntary and involuntary denied boarding situations. I predict we will see an uptick in denied boarding situations once travel resumes in full. Ultimately, new forecasting models will better anticipate customer behavior, but in this era of uncertainty, with so many variables, pre-pandemic models likely no longer apply.

New DOT Rules Tighten Consumer Protections For Oversold Flights

At the same time, new DOT rules tighten consumer protections surrounding involuntary denied boarding situations.

On April 21, 2021, consumer compensation will increase. Passengers bumped from a fight against their will be entitled to $775 or 200% of ticket price for delays of two hours or less (four hours or less on international flights) and $1550 or 400% of ticket price for delays over two hours (over four hours on international flights). Previously, those compensation limits were $675 and $1350 respectively.

Furthermore, airlines must now notify passengers that a cash option is available for giving up their seat (versos simply a voucher or miles).

CONCLUSION

The era of no-penalty flight changes will lead to more passengers skipping or cancelling their flight, often at the last minute. This will incentivize airlines to overbook flights, even though compensation for involuntary denied boarding situations will increase in April. Hopefully the confluence of factors will move airlines to offer even more generous compensation for voluntary denied boarding in the months ahead.

Do you think the lack of change fees will lead to oversold flights?

Previous Article United Airlines “How’s My Flight Tracking” Option In App
Next Article Boeing, Cancel Culture, And Forgiveness

About Author

Matthew Klint

Matthew is an avid traveler who calls Los Angeles home. Each year he travels more than 200,000 miles by air and has visited more than 135 countries. Working both in the aviation industry and as a travel consultant, Matthew has been featured in major media outlets around the world and uses his Live and Let's Fly blog to share the latest news in the airline industry, commentary on frequent flyer programs, and detailed reports of his worldwide travel.

Related Posts

  • United Airlines 2023 MileagePlus Devaluation

    Massive United Airlines Devaluation: What To Do Now

    May 17, 2023
  • United Airlines Denounces Delta Air Lines’ Haneda Slot Proposal As A “Self-Serving Scheme”

    May 9, 2023
  • Exciting: How United Airlines Is Genuinely Improving Onboard Service

    May 8, 2023

5 Comments

  1. 121Pilot Reply
    January 29, 2021 at 12:39 pm

    My guess is that as we head back towards normal these fees are going to come back. Especially when you start thinking about all the games that people will be able to play when there are no change fees and no charges for same day standby.

  2. MeanMeosh Reply
    January 29, 2021 at 1:14 pm

    I think 121Pilot is likely right, and the fees return once demands ramps up to normal-ish. That being said, even if they don’t, the issue you bring up will likely be a temporary imbalance until the no-show prediction algorithms adjust to the new reality. Maybe there’s an ugly month or two but that’s probably about it. My guess is the airlines actually err on the side of caution and limit the number of oversold seats until they get 60 days or so of data. I really don’t think the airlines are going to want to deal with the PR of “thousands of travelers left stranded” due to bumping…

  3. Jerry Reply
    January 29, 2021 at 1:36 pm

    I fly weekly, and I just don’t see these empty flights everyone is talking about. DFW, MIA, CLT, ATL seem like business as usual. Is the South really operating that differently than the rest of the country?

    For goodness sake, I didn’t clear and was #4 on the upgrade list leaving Atlanta on Tuesday. That’s a business market on a slow day in January. I’m an EXP that actually requalified in ’20, so my 12 month EQDs are high. They were even asking for volunteers to bid on bumps in the app.

    • Matthew Klint Reply
      January 29, 2021 at 1:44 pm

      AA seems to be the exception. I noticed that in DEN at the AA concourse. Packed. United concourse, not so much. Almost all of my flying is on United, though my LHR-JFK-LAX AA flights were empty.

  4. Miles Reply
    January 31, 2021 at 9:51 am

    Southwest has no change fees, and they somehow get by…quite successfully.

Leave a Reply

Cancel reply

Search

Hot Deals for May

Note: Please see my Advertiser Disclosure

Chase Sapphire Preferred® Card
Earn 60,000 Points
Capital One Venture X Rewards Credit Card
Capital One Venture X Rewards Credit Card
Earn 75,000 Miles!
Capital One Venture Rewards Credit Card
Capital One Venture Rewards Credit Card
Earn 75,000 Miles
Chase Ink Business Unlimited® Credit Card
Earn $750 Cash Back
The Business Platinum Card® from American Express
The Business Platinum Card® from American Express
Earn 120,000 Membership Reward® Points

Recent Posts

  • America The Beautiful May 29, 2023
  • United Airlines CEO Says USA Is The “Greatest Country In The History Of The Planet” May 29, 2023
  • Coat Overhead Bin
    Is It Rude To Place Your Coat In The Aircraft Overhead Bin? May 29, 2023
  • United Club Fly Lounge DEN Review
    Review: United Club Fly Lounge Denver (DEN) May 29, 2023

Categories

Popular Posts

  • Punches United Airlines Gate Agent
    Man Repeatedly Punches United Airlines Gate Agent After She Asked Him To Vacate First Class Seat He Poached May 3, 2023
  • Delta Air Lines Seat Recline
    Delta Air Lines Passenger Freaks Out After Passenger Pushed Her Seat When She Reclined May 1, 2023
  • American Airlines Pins Cockpit Door
    American Airlines First Class Passenger So Angry Over Meal Choices He Pins Flight Attendant To Cockpit Door May 11, 2023
  • Cursing Fight United Airlines
    “Don’t You Ever Tell Me To Speak English!” (Fight Breaks Out On My United Airlines Flight) May 17, 2023

Archives

May 2023
M T W T F S S
1234567
891011121314
15161718192021
22232425262728
293031  
« Apr    

As seen on:

live_and_lets_fly

The new United Polaris Lounge at Washington Dulles The new United Polaris Lounge at Washington Dulles is the most beautiful of all Polaris Lounges. Stay tuned for a detailed look and many more photos on the blog tomorrow. Well done @united.
@malaysiaairlines just announced it would retire i @malaysiaairlines just announced it would retire its A380 fleet. While not surprising, it is sad to see the growing list of carriers retiring this superjumbo jet. On Malaysia Airlines, I flew the #A380 once from Kuala Lumpur (KUL) to London (LHR) and had the entire first class cabin to myself (full review on the blog). It was a beautiful flight that I will always remember.
Welcome to @fly_bur @aveloair! I am so excited tha Welcome to @fly_bur @aveloair! I am so excited that a new carrier, Avelo, has launched, especially from an airport just 12 minutes from my home!
I greatly miss the @lufthansa #747-8 at @flylaxair I greatly miss the @lufthansa #747-8 at @flylaxairport. Hopefully this summer it will return.

.
.
.
.
#Lufthansa #FirstClass #747 #747-8 #StarAlliance #Miles #Points
I recently spent a weekend at the @ventanabigsur. I recently spent a weekend at the @ventanabigsur. This is not only a lovely, all-inclusive resort, but one of the best properties to use your @hyatt World of Hyatt points.
.
.
.
.
#Hyatt #BigSur #California #WorldofHyatt #CA-1 #Points #Hotels
In terms of a spacious first class product, the @E In terms of a spacious first class product, the @Emirates suite on a 777-300ER is hard to beat. My preference is Suite 2K.

.
.
.
.
#Emirates #777 #firstclass
Nearly five years ago, I took a “break” from I Nearly five years ago, I took a “break” from Instagram ahead of the birth of my first child. Goodness, how time flies. While I’ve enjoyed catching up on others over the years, now it is time for me to return to Instagram. In this first post, I highlight two joys in my life, my two children, whom I trust will grow up to be prolific travelers that circumnavigate the globe as ambassadors of love and respect.

.
.
.
.
.

#travel #airplanes #airlines #miles #points #familytravel #human #integrity #honor
United Airlines' new Polaris seat is a huge improv United Airlines' new Polaris seat is a huge improvement over UA's current business class seat. Check out my blog at liveandletsfly.com for 70+ photos of how @united is transforming its entire business class experience starting this December!
The perfect @flysas name tag for #Longyearben! The perfect @flysas name tag for #Longyearben!
Spotted four #polarbear outside of #longyearbyen - Spotted four #polarbear outside of #longyearbyen -- oh, and I love 40°F summer weather!
One of the best crews I have ever had the pleasure One of the best crews I have ever had the pleasure of flying with in all my years of flying. Thank you @flysas SK940 on 11 Aug 2016
Next stop ARN! But dear @flysas , next time if I a Next stop ARN! But dear @flysas , next time if I assign a window seat months in advance, don't move me to a center seat "for my convenience" with no way to get my original seat back... 😞
Ready for #PIA from #MAN to #JFK -- we will be rac Ready for #PIA from #MAN to #JFK -- we will be racing the #Delta flight to JFK at the gate next to us, which also departs at 12:45p. With @onemileatatime
Another room with a beautiful view... #hyattregenc Another room with a beautiful view... #hyattregencycasablanca #cassablanca #hyatt
Enjoying #shanghai with @onemileatatime from the i Enjoying #shanghai with @onemileatatime from the inside of the @grandhyatt_shanghai ... It is 40°C outside! 😓
From my front gate to my boarding gate in 15 minut From my front gate to my boarding gate in 15 minutes flat. I ❤️ #bur #burbankairport
@malaysiaairlines #747 out of retirement and in se @malaysiaairlines #747 out of retirement and in service at #kul -- beautiful livery!
View from my 61st floor room at the beautiful bran View from my 61st floor room at the beautiful brand new @parkhyattguangzhou -- look for a full review coming soon on the blog #hyatt #parkhyatt #guangzhou #parkhyattguangzhou
Will miss the @united #globalfirstlounge at #ord, Will miss the @united #globalfirstlounge at #ord, which closes tomorrow and the Queen of the Skies #747 which will be retired in 2018.
The colonial #architecture of #mumbai is stunning. The colonial #architecture of #mumbai is stunning. If you're ever here, get up at 5am and have a walk around the city before it gets busy. You can hear the birds instead of honking horns.
Load More... Follow on Instagram
facebook twitter instagram rss

Privacy Policy

© Live and Let's Fly All Rights Reserved.
Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Live and Let's Fly with appropriate and specific directions to the original content.