Lately, Delta has been dropping hints that it will “approach flexibility differently than this industry has in the past”. Could we soon see the end to change fee? If so, will other legacy airlines follow?
Delta May Eliminate Change Fees
Speaking in Las Vegas recently at the CES, Delta CEO Ed Bastian hinted at upcoming changes to the way Delta penalizes changes:
“When you say that you want to be seen as a trusted consumer brand, it calls into question all interactions with customers and where there are vulnerabilities to being considered trusted. When you ask that question, ‘Where are those vulnerabilities?,’ clearly fees are one of the factors that we get dinged on. … So it comes back to us to think about: Are their better ways to manage that?'”
Referring specifically to change fees, Bastian added:
“How do you, with change fees or other fees that you have in the process, how do you turn them into something that people can understand more, why they’re there, and maybe provide greater value alongside it, or change the structure?”
The last sentence is key. Also this number: $615 million. That’s the dollar amount Delta collected from change fees in the first nine months of 2019. That’s up from 2018, when Delta made only $694 million from change fees the entire year.
You think Delta is just going to leave that money on the table when it just reported record profit and employees are already happy over large bonuses?
Ask And You Shall Receive?
Eric Phillips is Delta’ Senior Vice President of Pricing and Revenue Management suggested discretion more than a Southwest-style elimination of change fees might be in order:
“We can be better about providing flexibility. Look, we recognize, life happens. Meetings get rescheduled. Dance recitals are important. And yes, sometimes T-ball practice is like a Game 7. So our goal is to make sure that we provide our employees with the tools and the policies that they need so they can respond to the customers with the fairness and empathy that customers want.”
More empathy would be appreciated, though I think frequent flyers of Delta (and American and United) would agree that empathy is already available depending upon who you reach and how you ask.
CONCLUSION
Southwest Airlines, which charges no change fees (just any difference in fare), swears that its lack of change fees drives far more business than the ancillary revenue that could be gained from them. That may be (though I am skeptical). It is difficult to imagine a situation in which Delta would purely abandon change fees. But I can see a more flexible approach or at the very least, empowering agents to waive them when asked (which already happens if you ask nicely enough or have a good story).
Should Delta liberalize its change fees, would American and United follow? We can all dream, can’t we?
Maybe the change fee depends on how far out you are?
What I don’t get is charging a $200 change fee for a flight that costs less than that, or providing absolutely no incentive to cancel my ticket. If I am flying tomorrow and it is cheaper to just buy a new ticket, I’ll do that and end up as a no-show on my original flight. But wouldn’t the airline benefit by knowing ahead of time that I’m not going to show up so they can resell the seat? Even if they offered a 25% credit toward a new ticket, I would at that point be compelled to cancel my ticket to cancel to get that credit.
Someone (Alaska?) has a sliding scale for change fees such that they go up as the flight gets closer (and start at $0 something like 120 days out). Given the business reason for change fees, such a method makes the most sense–hopefully the masses can understand it.
For long time I flew WN whenever I could just because it wouldnt cost me an arm and a leg if I needed to change. I would cancel my $300 ticket and rebook on something that usually was more expensive as these rebookings would be usually short noticed. While I am not sure this would drive more revenue from existing DL loyalists I can very well imagine this to drive incremental customers from other airlines to DL. Especially as I cannot even theoretically imagine UA and especially not AA to follow. Hell will freeze over long before that.
If I had to guess, DL might officially “eliminate” the change fee, but implement a system whereby your old ticket can be applied to a new one at X% of the original ticket value. Let’s say 80% for the sake of argument, perhaps with a cap of $500 or something. That would benefit those buying el cheapo fares, and encourage them to cancel instead of just no-showing. The additional fees on more expensive tickets would make up the revenue shortfall.
@ Matthew — Nothing new here for this customer. It is the primary reason we give business to Delta. However, Delta must be joking if they think we would ever trust them after they stole our three year SkyClub memberships and massively devalued our miles without notice.
Since Southwest has no change fees, and Alaska has no change fees for MVP Gold and 75K members, maybe DL wants to be more competitive with SW and AS, especially for their hub in SEA. It’s own reason that I always book AS. Note, that I generally pay a $30 premium each way in order to avoid Basic Economy and to get the elite benefits, so that is baked into every fare I purchase.
I am reading this article while sitting on a Southwest flight, coming back from a meeting I would not otherwise have gone to if I had a change fee. I had a $98 one way ticket booked for Friday and when something came up with work, I was able to change my Friday flight to Saturday morning and pay the fare difference of $235 for the $333 fare to make my meeting. I would not have otherwise done that if I was out my original $98 or felt a “change fee” was being stolen from me without a benefit to me. If I had decided not to go to my meeting all together, I knew I would have all of my paid fare available to use on a future flight with zero loss to me.
As a Delta360 member although not published as a perk I was never charged change fees or even cancelation of a ticket. For me that has been the best “not told” perk of that status level. I wish that was the case for all passengers. Things happen and you may need the flexibility.
Fee for changes are little to much but also look the airlines side if you cancel or rebook 5 hrs before departure how the can sell the seat is almost impossible