JetBlue modifies change fees… in a logical way

The past few weeks we’ve seen United, US Airways, Delta, and American all raise their change fees. As a consumer this has been extremely aggravating to watch, because change fees in no way reflect the cost of providing that service. We might not like paying for checked bags, but at the end of the day we can rationalize the fact that checking bags costs the airline money. Meanwhile with change fees, if I book a ticket 11 months out and decide to cancel it two days later, what exactly am I paying $200 for? I’m not really costing the airline anything, it’s not close enough to departure that I was preventing someone else from snagging that seat.

So while we’ve seen the legacies match one another, I was kind of curious to see how the low cost carriers would react. JetBlue announced an increase in change fees today, though it’s not a change that really makes my blood boil.

Their change fees used to be $50-100 depending on how expensive the ticket was, though now they’re as follows:

Changes and cancellations made 60 days or more prior to departure date:

  • $75 per person fee

Changes and cancellations made within 60 days of departure date:

  • $75 per person fee for fares under $100
  • $100 per person fee for fares between $100 – $149
  • $150 per person fee for fares $150 or more

So do I like the fact that they’ve increased their change fees? Of course not. But I can appreciate the fact that they differentiate between someone making a change more than 60 days out and someone making a change closer to departure, since there very often is a cost to a passenger canceling a seat close to departure, given that they may not be able to resell it.

Also, I can appreciate the fact that they have different change fees for different fare types within 60 days of departure. Now, as you’ll see the fees are structured in such a way that not a whole lot of value will be left over after the fee, but it’s still better than a flat $200 fee, or whatever.

Meanwhile members of JetBlue’s Mosaic program get a pretty nifty new perk as of today — no change or cancellation fees!

This is probably my single favorite perk of being MVP Gold with Alaska — you don’t pay change or cancellation fees, so when you cancel a ticket the funds can go back into your “travel wallet.” Selfishly one of the reasons I’m happy to see JetBlue add this perk is because I think it’s now less likely that Alaska will get rid of the perk.

So while I really hate an airline raising their change fees, I do appreciate the logic behind it here. They’re recognizing that those cancelling far out are costing them less than those cancelling close to departure. They’re realizing that not all fare types deserve the same change fee. And they’re also realizing that elite members deserve a break sometimes.

So in a very backhanded way, I guess kudos(ish) JetBlue?

Comments

  1. Great elite perk. Wish the legacies started to think more out of the box and rethink the change penalties.

  2. What? For fares up to $100 the change fee is a minimum of 75%, and up? For a fare of $100, the fee might well be 100% of the cost of the ticket? In which case, I would never bother to inform them I couldn’t take the flight. I would even check in online if I could, and hope to force them to fly with that seat empty, rather than let them take all of my money and then sell the seat again, at a potentially even higher last minute fare.

    Kudos? Just reading about this onerous policy makes me want to never, ever, spend a single dollar with them.

    A fee of $75 for even the lowest fare when you give them over 60 days notice? That’s just obscene. I wonder if they realize how many of us refuse to take discretionary domestic flights with anyone other than SW because of the draconian penalties they and the other non-SW airlines impose?

    There are easily 3 or 4 flights a year I don’t take because they are only affordable if booked so far in advance I can’t be sure I can go on those dates. As a leisure traveler, if I can’t get there on SW, I just skip the domestic long weekend trips, and save that money to spend in Europe on a month long trip, using “free” award flights from cc sign up bonuses instead.

    The rant is over now, it’s safe to come back out. 😀

  3. They are also leaving money on the table in that they aren’t forcing customers who need the flexibility and who can afford it to buy more expensive fares. No way the legacies match this.

  4. I’m trying to understand this pricing as well. So why would I ever cancel a fare where the fee is greater than the ticket price?

    Am I missing something?

    A better method would be to refund 75% of the ticket fare if cancelled 60 days prior to the date and maybe only 50% prior to the date of travel.

    Thanks.

  5. What’s particularly interesting is that JetBlue is waiving fees for Mosaic members AND others on the same itinerary. Alaska only waives the fee for the MVP Gold member.

  6. Hi Lucky,
    Quick question, which is more a general question regarding cancellations.

    For a lot of domestic fares or short haul flights in europe the taxes and fees are higher than the actually fare. Is there a way to recoup the taxes you paid for your flight if you never actually take the flight. For instance for some of these cases it might make sense to just try to get your taxes back rather than pay a cancellation or change fee. Let me know if my question doesn’t make sense. Thanks

  7. @ jason h — Wish there were, though I don’t believe that’s refundable either without paying the fee.

  8. Robert, I think what B6 is basically saying is “Don’t bother us with changing cheap tickets.” It’s not too different from Long Island Railroad where there’s a $10 fee to have a ticket refunded, but lots of their tickets are around $10.

  9. “change fees in no way reflect the cost of providing that service”

    Well, come on, that’s not quite true. Airlines make a lot of money from charging for flexibility. If you need the flexibility to change your flight, and there were no change penalty for cheap fares, what would prevent you from buying a cheap fare far in advance and then changing it if you need to? If there were no change fees, airlines would sell many fewer expensive flexible fares, which means that the price of all other fares would have to be higher.

    So, while change fees don’t appear to “reflect the cost of the service,” in fact they keep the price of advance-purchase inflexible fares low. I’d say this means that change fees are priced rationally (even though I dislike them as much as anyone).

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