United quietly raises change fees by $50 across the board

Yesterday some FlyerTalk members noticed a change in the fare rules of United tickets, whereby the change fee for domestic tickets went from $150 to $200, and the change fee for international tickets went from $250 to $300. This is obviously disappointing on a couple of levels. First of all, it’s disappointing that United didn’t give any advance notice of the change, or for that matter didn’t even announce they made the change. And I think equally disappointing to the average consumer is that these fees in no way reflect the costs incurred by the airlines for making changes, and that leaves a bad taste in everyone’s mouth.

This morning UA Insider posted the following:

Apologies for not being able to respond sooner. As is typically the case with this realm of the business, I can’t provide any insight into the new change fee levels other than to say they are an adjustment to better compensate for the costs incurred when a traveler elects not to fly in a reserved seat. However, what I can tell you is that the new change fee rates are only applicable for tickets issued on or after April 18. No impact to what you may have already had on the books.

And while I understand they can’t get further into it, I take issue with them saying “they are an adjustment to better compensate for the costs incurred when a traveler elects not to fly in a reserved seat.” We all know that’s simply not true. If I make a booking 11 months out and cancel the ticket two days later, what’s the cost incurred to the airline? Probably nothing. On the other hand if a cancellation is made within a few days of departure, I can buy that argument. But then they should have “tiers” of cancellation fees, which I think people would actually take less issue with, because they would reflect the costs incurred.

It’ll be interesting to see if other airlines match. For what it’s worth I don’t think United will reverse their decision, and I’m not sure other airlines will match. I think the thing to keep in mind is that 99.9% of consumers don’t look at the change policies when booking non-refundable tickets. They know Southwest allows changes for free, and know every other airline charges lots of money that’ll make their blood boil. But I’m not actually convinced consumers will care whether it’s $150 or $200, at least not to the point that it’ll drive their decision of which airline to fly.

Comments

  1. This will certainly make me marginally less likely to fly United if prices and timing are equivalent on other airlines. I live in SF and have lots of choices for major markets. Virgin America is looking better and better for me for a lot of markets, and I already have shifted my flying to Southwest most of the time for west coast trips. After being Silver with United last year, I may not fly them at all in 2013.

  2. I completely agree. There should be a tiered system.

    I was upset when the DOT forced airlines to do the 24 hour refund (even though Southwest and Jetblue already offered it) as it forced the airlines’ hand. However, it was a positive move as there is no reason anytime outside of 1-2 weeks where a legitimate argument could be made that there is a high cost.

    Im waiting for an airline to make reasonable refundable fares and smart ticketing rules, but I guess quick profits trump long term customer service and value…

  3. Hey Ben –

    I know this is off topic, but did not know where to put it.

    SAS just started service (angled lie flat:() SFO-CPH. In the article on SF Gate, they interview the SAS CEO regarding the new service…

    Anyway, scroll down about 3/4 of the page. I had no idea you moonlighted as a SAS FA! 🙂

    http://thebat-sf.com/2013/04/19/qa-with-sas-ceo-rickard-gustafson/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+batsf+%28The+B.A.T.+%28Bay+Area+Traveler%29%29

  4. Or they should do something like Alaska.. don’t they waive their change fees for their top tier elites? UA wouldn’t even have to waive them completely, but even a 50% discount for Platinum & 1K, and 25% for Gold & Silver would leave a better taste in everyone’s mouth.

    They do this for elites on award tickets; it would be a really nice benefit for revenue ones as well!

  5. I hate to say it, but doesn’t really impact me. I never change, and if I really needed to I’d just be pissed off. It wouldn’t drive to an equally horrible airlines like USAir to American…….

  6. Another reason why Southwest is often the best option for the leisure traveler, especially families. This is bad news and also implies further growth in ancillary fees.

  7. I sent UA an email last night saying I was very unhappy with this decision and the general direction they headed jn regarding flight changes. With WN getting stronger and stronger in my area, especially for short flights they are becoming a no brainer. I also pointed out how I appreciated AAs efforts to simplify fares and present consistent and predictably priced upsell offers for more flexibility.

  8. If you think there is a significant chance of having to make a change, consider buying an American Airlines “Choice Essentials” fare instead. For a premium of about $68 (for the few I’ve priced), these fares include free changes and one additional checked bag.

  9. “I’m not actually convinced consumers will care whether it’s $150 or $200, at least not to the point that it’ll drive their decision of which airline to fly”

    And that right there is the reason why they changed it. They realized they can have higher pricing, with almost no impact on sales volume.

  10. @Steve – I’d like to. Unfortunately, the difference between a non-refundable and refundable ticket is often way more than the change fee!

  11. I’d be happy to pay an extra $100/$200 upfront in order to allow multiple pre-departure changes, but $200/$300 *per change* is simply not worth it to me. My main issue here is the lack of warning and the questionable explanation provided after the fact. If you’re going to raise the fees then give us some warning first. If you’re going to attempt an excuse for the change then give us a real explanation rather than simply pretending it’s about paying a computer $200 to process a single task that takes milliseconds.

  12. What kills me is how different this is from hotels.
    Though I know there are some non-cancelable hotel reservations, why is it that 95% of hotel reservations — even at the swankiest and most in-demand hotels — are typically cancelable without penalty even 24 hours in advance of the stay?!?

    In both cases, the entity is dealing with potentially inventory that goes un-paidfor. But many airlines even already charge a late-in fee for award tickets, so with seats that open up at last minute, they’re at least getting (almost for sure) an extra $75 that way.

    I just wish Southwest flew more places and had a more convenient schedule for me. I used to be 1K on United, but I’d drop my loyalty of them even further if there were carriers like Southwest that flew internationally.

    Heck, I’d also be likely to buy airline tickets — and fly! — a lot more if I didn’t feel so pressured re: change fees. Maybe this doesn’t apply for business travel (understandably one of the airlines’ most lucrative segments, obviously), but I can’t help but think that lots of families would also book and fly more trips if they didn’t have change fees hanging over their head.

  13. Geez! With a $200 change fee, $50++ for baggage, $25 for a stale sandwich and getting close to $10 for a cocktail, the damn tickets ought to be free! I’m pretty sure that the other major carriers will follow suit, in time if not immediately. Just one more way to get their hands deeper into our pockets. And the idea that it costs them anything close to $200 (or $300) to change a reservation is pure balderdash. They’ve already got the worst reputation and ratings for ‘service,’ and this sure won’t help them improve their scores. Perhaps Jeff wants to fund a larger bonus for himself. Once more reason to avoid United whenever possible.

  14. By doing this, it makes all but expensive tickets truly non refundable by leaving very little value in the ticket to be applied toward another ticket or flight.

    And as you note, there is no cost to change a ticket unless perhaps it is relatively close to departure. Just like most speeding tickets are about raising funds and have absolutely nothing to do with safety

  15. @ Lucky – Happy birthday!
    (blog reader from India, it’s 20th Apr by IST time zone. Bit creepy I know.)

  16. Just looked at the “Rules & Regulations”–it’s 46 pages long! “Change” is in 21 places & I can’t make sense of most of it. So, yea, another corporate grab for money & screw the customer. More & more I fly AK.

  17. For cheap tickets, it is better to buy a new one and consider each purchase as nonrefundable/nonchangeable. For my vacations,
    DO what I have been doing for the last 8+ years, buy travel insurance.

    And I think all other airlines will follow.

  18. Lucky, you say “I’m not sure other airlines will match…” and then you go on to say “But I’m not actually convinced consumers will care whether it’s $150 or $200, at least not to the point that it’ll drive their decision of which airline to fly.”

    This doesn’t make sense to me–if the increased price isn’t going to drive booking behavior, then why wouldn’t the other airlines match? The only reason they wouldn’t match would be if they stand to gain passengers who book away from UA because of the fare difference. If consumers aren’t going to change their behavior, then the other airlines are just leaving money on the table if they don’t match.

  19. First, this probably won’t impact bookings from kettle. They usually don’t change flights, and when they do, they will have already bought the ticket.

    This change WILL however change the behavior of business fliers who are forced to book into discount economy. There are tons of us these days. And while most of us probably don’t change our flights all the time, it will now be much better to buy a Choice Plus fare from AA than to play the UA lottery.

    It goes without saying that those folks booking like me are on average far more profitable than the average kettle.

    Another brilliant move by UA to lose HVFs.

  20. I agree with AAexPlat. Don’t think this would impact most people at all. As a 100K flyer I have only made ONE change myself because my cousin was getting married in the past 10 years.

    Also is there a trick to “changes” Even if I wanted to change, the change would probably in the last day or two before my flight. At the last moment, I find flights these days are very full and I would only likely find the EXPENSIVE fares available. So forget the $200 change fee, there also is probably a double the price FARE difference.

    Or do you have a trick to get around the fare differences at last minute.

  21. Although this doesn’t directly affect me – I don’t think I’ve ever had to change a booking – it just makes me hate United even more, and makes me even more determined to ditch them as soon as I’ve used up my miles with them.

    They really are quite appalling, money grubbing and duplicitous, and the general level of service they offer is laughable.

  22. This just reinforces why my company makes us fly Southwest whenever possible – even having us drive 2-3 hours from a WN airport to our job sites. Between changes to the install schedules and changing priorities, we frequently change plans leaving early or just cancelling all together. I miss having status on an airline but it is hard to argue with the economics of WN no change fees.

  23. I really feel bad for families that need to change their travel plans. $800 for a family of 4! I’m sure that constitutes a large portion of what some families budget for spending money for a (once a year or every few years) trip.

    “Can’t go to disney world today kids… no money for tickets. Gotta hang out by the hotel pool and eat ramen!”

  24. @Adam – the difference is in the profit margins. That hotel room rate is far above the cost to actually provide the lodging. The average fare paid for air travel is far closer to the cost, so you end up compensating with these methods.

  25. Yeah, many of us have never changed a ticket… Because the change fees are outrageous. I can imagine a situation where I would change if it cost me $50 (plus fare difference of course, the house always wins), but if the change fee is $150 or $200, then the ticket is effectively non refundable, because it would pretty much have to be life death to make me pay that change fee.

  26. I feel bad for the res agents who are going to have to deal with angry pax who call to change flights and are hit with this.

  27. Yikes- $300!

    Obviously UA reasons that no one really considers this fee in deciding on the purchase of a ticket and if they HAVE to make a change, they’ll pony up the fee rather than tearing up the ticket.

    These are the type things regulators need to regulate.

  28. I haven’t paid a change fee in years. These days, the tickets I buy are so cheap that if I have to change them, it’s cheaper to buy a new one.

    Case in point: I just bought tickets from IAD-FLL for the 4th of July weekend, and I paid $88 for the IAD-FLL segment.

  29. @Dan: I guess you don’t travel to other continents. That cheap $88 ticket would be more like $888 and throwing it away for a last minute change to a $2,888 ticket would probably sting a lot worse.

  30. @tassojunior

    If it were regulated and capped at $50, for instance, then the airlines would just increase fares. It’s better to have cheaper fares and higher fees IMO.

    If you want to pay more for un-restricted or less restricted fares, you already can. If the regulations are in place limiting fees, you won’t be able to pay less for a restricted ticket…

  31. Greg – in the last day or two before a flight, unless the flight is truly sold out, UA usually opens seats in cheaper fare buckets. So, on return, you can often make changes for just the change fee, or can make same day changes (actually within 24 hours) for $75 (free if Gold or above). On originating flights, you can’t make changes for just the change fee, but same day changes are available.

  32. I missed my flight out of Denver on Friday and I called (prior) to cancel and get another flight. I was told the fee to change to a Sat. flight was $75.00. If I needed to make it for another time in the distant future, the change fee was $150.00. They switched me for $75.00 no problem.

  33. @Dax

    I very much do travel to other continents, I just do it on award tickets, which have a heck of a lot more flexibility/cheaper change fees.

  34. I find this really appalling, especially for international flights. I fly from the US to HKG a lot and United has really insane change fees even before the $50 increase. Most Asian Carriers only charge $100 USD, even the wonderful Cathay Pacific who usually has much higher fares.

    Next time you fly United, make sure your dates are set in stone, otherwise you may want to go with an Asian carrier who has a cheaper change fee.

  35. This seems somewhat counter-productive since for many domestic tickets it will now be cheaper to simply buy a new ticket than to change the existing one — so United will actually incur more costs in the form of no-shows (those abandoned-rather-than-changed tickets). Perhaps this will not happen often enough to change anyone’s mind, but still.

    I remember not too many years ago (2006) when Delta still charged $50 for domestic changes and JetBlue $35. Those were perfectly reasonable fees in my opinion.

  36. Last year on Singapore Airlines I chose to pay an extra $100 or so at the time of booking and received numerous no charge pre-departure changes as a result. After departure the cost for additional changes to the return trip was a flat $50 per change. Interestingly enough, I was using United Airlines to reach and return from the nearest SQ gateway. The way I dealt with UA’s absurd change fees was to break the UA flights into one-way tickets and to only book them when I was positive there would be no further changes, barring a true disaster. I have a job which does not entail much business travel, but does come with the expectation that leisure travel may need to be adjusted or amended based on sudden business developments, which means flying airlines like United is becoming more and more of a problem for me.

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