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.
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?