The Change-Fee Gouge: Worse Than You Thought

The travel press has been full of reports that the four giant legacy lines—American Airlines, Delta, United, and US Airways—just hiked the fees to reissue “nonrefundable” tickets. The new fees are $200 for domestic travel and $250 to $300 for most international travel. The basic idea of the exchange fee is that when you cancel a “nonrefundable” ticket, you can retain that ticket’s dollar value, less the fee. But the amount of the fee isn’t the whole story. My friend Don recently had to cancel a trip to Europe on US Airways, booked with nonrefundable economy tickets costing $862 each, but when he tried to book a replacement trip he found five additional stumbling blocks:

• The residual value of the canceled ticket has to be used for a trip starting within one year of the originally ticketed flight. That means if you bought a ticket a long time in advance—nine months, say—and suddenly had to cancel, you would have to start a replacement trip within three months of cancellation.

• If the replacement ticket costs less than the remaining value, you can’t “bank” the difference toward still another trip. You get only one replacement trip, and if the new fare is less than your original ticket, you lose the difference.

• If the replacement ticket costs more than the remaining value, you have to buy a new ticket for at least the full price of the old one, not just your remaining replacement value, pay the difference, and then pay the fee on top of that.

• If you have to cancel two trips, you can’t combine the replacement values toward one more expensive ticket.

• Replacement trips must be booked only on the original line, not on another line in the same alliance. Don wanted to use the remaining value to go to Canada on Air Canada, but US Airways said he couldn’t use it unless the flight he wanted carried a US Airways codeshare, which it didn’t.

As far as I can tell, the other big lines have similar requirements. They’re hard to track because they’re spelled out in individual “fare rules” rather than in the readily available Contracts of Carriage. (See our Airline Fees: The Ultimate Guide, updated last week, and our Ultimate Guide to Airline Contracts of Carriage.) I tried digging up fare-rule details on several other lines, and although what I found was generally in line with the US Airways requirements, I can’t be certain.

What’s with these draconian limitations? My take is this: When airlines first started issuing nonrefundable tickets, they were really nonrefundable. If you had to cancel, you got bupkes. To ease the burden on consumers, those original rules allowed for medical and bereavement exemptions, requiring documentation from doctors, funeral directors, or whatever. But the emerging widespread “desktop forgery” capability created such an enforcement hassle that the airlines adopted the alternative: You would still get no refund, but you could retain most of the value of a ticket, less an exchange fee, which you could use toward a new ticket.

Originally, change fees were reasonable, starting at $25. But most airlines have steadily escalated them to the current outrageous levels. United excused its increase as related to costs, but that’s nonsense. What’s really happening, in my view, is that the giant airlines are trying to revert to a de facto “truly nonrefundable” status through the back door by making refunds too expensive and limited to be practical for many travelers.

The high fees are especially objectionable because the reason many consumers cancel trips is due to some seriously disruptive event—sickness, death, and such. In effect, the airlines are preying on consumers who are already under stress.

Fortunately, you have some alternatives. Southwest still doesn’t charge anything, and several other lines, including Alaska, Frontier, JetBlue, and Virgin America, charge a lot less then the giant lines. Also, the first level up from the bottom in American’s new “branded” fare system includes a checked bag and early boarding in addition to no change fee. When I looked earlier this year, the fare difference on a transcontinental round-trip was less than $70, making American’s offering an attractive alternative.

Ed Perkins Seniors on the Go is copyright (c) 2012 Tribune Media Services, Inc.

You Might Also Like:

• Airline Fees: The Ultimate Guide
• Ultimate Guide to Airline Contracts of Carriage
• The Price of Consolidation: $200 Change Fees
• $100 Carry-on Bag Fee: Frontier’s Bold Gamble