Major Airlines Drop Change Fees Permanently on Many Flights

Why it's a win for consumers, card issuers, and the travel industry

The coronavirus pandemic caused U.S. airlines to make temporary changes to their ticket policies, allowing passengers to change or even cancel their upcoming flights without a fee. Now, some of the biggest airlines are making those changes permanent on many of their tickets—albeit with a few limitations.

Key Takeways

  • Alaska Airlines, American Airlines, Delta Air Lines, Hawaiian Airlines, and United Airlines have permanently eliminated change fees on standard economy and premium cabin tickets.
  • Beginning in 2021, change fees will again apply to basic economy tickets.
  • Southwest Airlines continues to have no change fees, without limitations.
  • The new rules apply to both cash and award tickets.

Details on the New Airline Change Fee Policies

On Aug. 30, United Airlines announced it would permanently remove change fees for standard economy and premium cabin tickets for travel within the U.S., then later added Mexico and the Caribbean. Alaska Airlines, American Airlines, Delta Air Lines, and Hawaiian Airlines followed suit in the days following United’s announcement with similar policies. Southwest Airlines continues to have no change fees, without limitations.

While all five of the legacy airline carriers in the U.S. have eliminated change fees for both cash and award tickets, their terms differ somewhat. Here are the specifics:

The Major Airlines' New Change-Fee Policies
  Alaska Airlines American Airlines Delta Air Lines Hawaiian Airlines United Airlines
Eligible regions All domestic and international flights U.S., Canada, Mexico, the Caribbean, Puerto Rico, and the U.S. Virgin Islands U.S., Puerto Rico, and the U.S. Virgin Islands All domestic and international flights U.S., Mexico, and the Caribbean
Eligible fares Main and First Class Main Cabin, Premium Economy, Business Class, First Class Main Cabin, Delta Comfort+, Delta Premium Select, Delta One (domestic only), and Delta First Class Main Cabin, Extra Comfort, First Class, and Premium Cabin Class Economy, Economy Plus, United First, United Business, United Premium Plus

A few other things worth noting:

  • Passengers can change any flight with no change fee if the ticket is issued by Dec. 31, 2020.
  • A change fee will apply to basic economy tickets (or Saver fares on Alaska Airlines) after the end of 2020.
  • American Airlines and United Airlines passengers who want to take an earlier flight on the same day can now join the standby list for free.
  • If you need to cancel a cash ticket or an award ticket and redeposit your miles, a fee may apply.

A Boost for Card Networks, Issuers and Consumers

Outstanding credit card balances fell by approximately $300 million in July 2020, according to the Federal Reserve. In part, that reflects a contraction in card use due to less vacation travel, commuting, restaurant dining, and other typical pre-pandemic spending. While reducing credit card spending is good for individual consumers, it hurts credit card issuers, who now make a greater proportion of their money off of interchange fees, compared with before the Great Recession.

In addition to spending less, it’s likely that many Americans used a portion of their government stimulus payments to pay down their credit card balances.

At the same time, new credit card signups have fallen off as banks have tightened their underwriting criteria, and the demand for travel rewards is down. As a result, banks and card networks will likely take a hit to their third-quarter earnings. 

However, because these new change policies also apply to award tickets, that may make co-branded airline credit cards and their one-time bonuses significantly more appealing. After all, travel rewards enthusiasts are more likely to try to rack up points and miles for aspirational travel when they know they can change plans if needed and not incur any penalties going forward.

A Boon for the Travel Industry

These changes should also come as good news for the global travel industry, which saw international tourism decline by 56% in the first five months of 2020, according to a United Nations report. 

Getting rid of change fees may be one key to beginning a recovery. Whether you’re an occasional or frequent flyer, the new policies can make the process of booking a flight a lot less stressful. Depending on the airline and your destination, if you need to make changes to your trip dates or you want to take a different flight on the same day, you may no longer have to pay for the privilege.

As people begin to feel more comfortable with air travel during and after the coronavirus pandemic, the elimination of change fees may also encourage them to book more flights even if they’re uncertain about the future.

Article Sources
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  1. United Nations. "COVID-19 and Transforming Tourism."

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