Airline change fees: 'Optional' fees that punish
Travelers move though Concourse B Tuesday, May 14, 2013 at O'Hare International Airport in Chicago. (Anthony Souffle / Chicago Tribune / May 14, 2013)
-- The fees, themselves, are outrageously high.
-- And those financial pressures are, in many cases, piled on top of pressures due to whatever unexpected and stressful event caused you to cancel.
Consider a hypothetical family of four, prepared to visit London, when junior breaks his leg during a soccer game and you have to cancel. Here's the financial toll: original tickets, $800 each, $3,200; cancellation fees, $300 each, $1,200; net recovery, $2,000; replacement tickets, $1,100 each, $4,400; total net trip cost, $5,600; total penalty for cancellation and rebooking, $2,400 -- a pretty stiff hit for many families.
When presented with these scenarios, the airlines' responses are worthy of Marie Antoinette:
-- "Let them buy refundable tickets." Sure -- at a typical three and a half times the cost of the nonrefundable tickets (per the National Consumer League).
-- "Let them buy the travel insurance we sell." Sure -- too bad it doesn't cover junior's "sports injury" or mom's call to fill in for a co-worker who suddenly quit.
Airlines excuse those outlandish fees as based on cost: "We could have sold those seats to someone else." But that's a smoke screen: The real reason is that airlines want to make it unattractive for business travelers to buy cheap nonrefundable tickets and gamble on completing a scheduled trip rather than buying the expensive refundable tickets the airlines want to sell. And that's a legitimate concern. Unfortunately, leisure travelers who get caught in the gouge are collateral damage.
The Department of Transportation (DOT) could help but so far it hasn't. Although Airline Deregulation Act of 1978 specifically denies government oversight of domestic fees and charges, DOT retains responsibility to assure that international fees are "reasonable." Industry experts say an airline's true cost of exchanging a ticket is no more than $50, and the traditional standard of "reasonable" is no more than twice the cost. Nevertheless, DOT has specifically declined to assert its legally-mandated authority.
Consumer activists are getting after DOT on this issue, and one -- Donald Pevsner -- has petitioned DOT to reconsider its ill-advised decision not to act. So far, however this petition hasn't even posted on the relevant docket, and there's some worry that DOT may try to ignore it.
So how can you cope? On domestic trips, fly Southwest, if you can: It imposes no ticket exchange fee beyond paying the difference in fare, if any. Or fly American, and buy the Choice Plus option that adds a checked bag, early boarding, and no-fee ticket exchange, for $80 extra each way.
But Southwest flies to only a few nearby international destinations, and American doesn't offer Choice Plus on intercontinental flights, so on those trips you're stuck with trip-cancellation insurance as your only protection option. My recommendation is that if you go for insurance, buy a "cancel for any reason" policy from a good online broker, not the airline policy with its many exclusions.
For the long term, I urge you to become an activist yourself. Respond to the current petition at regulations.gov, Docket DOT-OST-2012-0109. And ask your representative and senators to push DOT into fulfilling its public obligations to keep international ticket change fees reasonable.
(Send e-mail to Ed Perkins at firstname.lastname@example.org. Perkins' new book for small business and independent professionals, "Business Travel When It's Your Money," is now available through http://www.mybusinesstravel.com or http://www.amazon.com)
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