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Not Much Change At The Airlines

With new bookings slammed by coronavirus fears, most major airlines are temporarily changing their policies on change fees – but their attitude toward their customers has not changed a bit.

They still see each posterior in a seat as little more than a wallet to squeeze.

What began in February with government warnings against travel to certain international destinations, notably China and other hot spots for the emerging COVID-19 respiratory disease, has evolved in March into the cancellation of concerts, trade shows, festivals and conventions across the United States. Large and small companies are cutting back all but the most essential travel for business. This week the government advised against all cruise ship travel. Older, pregnant and health-compromised flyers have all been cautioned to avoid long trips.

Like the rest of the travel and hospitality industries, airlines have been hammered as a result. But most of them have taken a unique approach with their clientele by offering only limited waivers to their typically draconian fee policies on changes to travel plans. The message boils down to: “We still want your money – but no takebacks.”

Regular readers know that I am a frequent traveler on JetBlue. Frequent enough, in fact, that my Mosaic status protects me from change fees. So I was not directly affected when the airline announced late last month that such fees would be waived for tickets purchased between Feb. 27 and March 5, for travel through June 1. JetBlue later expanded that policy to cover all tickets bought through March 31 for travel through Sept. 8. Further extensions are likely to follow.

But suppose a non-Mosaic traveler did what I did back in January, which was to book flights well into the summer. In my case, these included flights to Las Vegas and Dallas for music industry events in April, which now have a pretty good chance of being canceled. Unlike someone who waited until this week to book such flights, our hypothetical early booking traveler could not rebook those flights to a later date, or to another destination, without paying a penalty.

It’s not as though JetBlue, or any of the other major airlines, actually forks over any cash for flights not taken. Generally, they sell those seats to other passengers. Meanwhile, they give customers who change their travel plans credit (less any applicable fees, plus or minus any difference in fares) for travel to a different destination within a year or so of the original trip. The airline may even make money on a canceled seat when it resells that seat to another passenger at a higher fare closer to the departure date.

That’s how it works in normal times, anyway. But this is not a normal time. JetBlue’s policy is tailored to bring in fresh dollars from new bookings by customers who have little to lose, while giving away as little as possible for seats that were sold before the spreading virus increased the chance that those seats will fly empty.

In short order, other airlines adopted domestic travel policies similar to JetBlue’s. As of Monday, Alaska Airlines was waiving fees for travel through February 2021 if travelers booked between Feb. 27 and March 31 this year; United’s waivers were for tickets sold between March 3 and March 31; American’s and Delta’s were for sales during all of March. The policies varied some on details such as the completion date of alternate travel. Some airlines also offered more lenient policies for international travel.

Spirit Airlines, in keeping with its spirit of soaking passengers for every possible fee at every conceivable opportunity, remains canny about its rebooking flexibility. Guests who “must” alter their plans due to COVID-19 should call or text Spirit; there is no online rebooking option. The details of who qualifies for the change fee exception are any traveler’s guess.

Suppose you are part of a large family taking a memory-making trip to the theme parks in Orlando, Florida, courtesy the family’s grandparents. Those parks are operating more or less normally thus far. But the grandparents who are paying the fares may no longer be comfortable (or safe) flying into a busy airport and proceeding to theme parks crowded with tourists from all over the world. If they bought those tickets more than a week or two ago, penalties for changing them could be exorbitant.

Tough noogies, say the airlines. All except Southwest, that is. Southwest has a standard no-fee policy for reservation changes (as well as checked baggage), although fare differences can apply. The rest are sending a message to customers that booking early to snag a desired flight or a good fare carries more risk than we knew. If unforeseen circumstances disrupt the entire travel industry, the airline will give you less consideration than it offers to someone who waited until the last minute to commit.

It has been a tough year for the airlines. From the grounding of the Boeing 737 MAX that disrupted some carriers’ schedules, to the pandemic threat that is roiling global travel, to the ever-present disruptions caused by weather, traffic and (mostly overseas) strikes, airlines operate in a very challenging business environment. I understand that. This week’s crash in oil prices, while hitting the financial markets hard, is a godsend to the industry. It could not have come at a better time. I am glad they will get this indirect subsidy from Saudi Arabia and other price-warring producers.

But airlines continue to behave like, well, airlines. They pamper their best customers (as JetBlue pampers me) and offer great deals to fill the last seats on the plane. Meanwhile, they treat everyone in the vast middle group as if they should be grateful to be allowed to fly at all. The average traveler has little reason to be loyal to any particular carrier (with the arguable exception of Southwest); the carriers show little loyalty in return. I keep waiting for that to change, but it never does.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us” and Chapter 4, “The Family Business."

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One Response to "Not Much Change At The Airlines"

  • Larry Elkin
    March 11, 2020 - 10:28 am

    Giving a little credit where it is due: JetBlue is now offering penalty-free changes and cancellations regardless of ticket purchase date for travel scheduled through April 30. As usual, refunds are not paid in cash; travelers receive a credit that is good for one year from the date of issuance. More policy changes, on JetBlue and other airlines, are sure to come, so always check for up to date information. More on JetBlue’s current policy here: https://www.jetblue.com/travel-alerts