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How airlines may choose to make up for those recently eliminated $200 change fees

Sept. 05, 2020
5 min read
How airlines may choose to make up for those recently eliminated $200 change fees
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There's been a lot of praise for airlines over the last week. In a permanent expansion of their current change fee waivers, some of the largest U.S. carriers have followed Southwest's model of not charging change fees at all, saving customers up to $200 a pop.

United Airlines was the first carrier to announce the permanent end of change fees, almost a week ago. Then American and Delta followed suit, before Alaska and Hawaiian rolled out similar policies of their own.

On the surface, it's a boon for consumers. With a looming fee, travelers feel locked into their plans, giving airlines some certainty when it comes to whether or not customers will fly as booked. Worst case, carriers end up $200 richer if flyers end up changing their plans.

Related: How no-change-fee policies stack up against Southwest

The certainty required for that model to work simply doesn't exist during the pandemic, and may not for some time to come. Travelers don't know if evolving quarantine or entry requirements will leave them forced to cancel a trip, leading many customers to avoid flying altogether, opting for road trips, instead.

In many cases, change fees still apply to international flights. Photo by Zach Honig/The Points Guy.

With change fees permanently removed, customers should theoretically feel more comfortable purchasing a flight, knowing that their plans may change. A $70 round-trip fare becomes even harder to ignore — if that trip to Vegas doesn't materialize when you originally expected, you can change your dates or destination, without that pesky $200-per-person fee.

There are three big exceptions to note, however. First, when it comes to American, Delta and United, change fees still apply to international travel, where they can be even more substantial — in the case of a premium-cabin ticket, up to $450 a pop.

The second, and this is a biggie, is that most airlines have not yet committed to issuing a credit if you move to a cheaper flight. Say you booked a ticket from Newark (EWR) to Los Angeles (LAX), and, since it's a long trip, you took the plunge and booked business class, for $1,200 round-trip. If you later decide to fly to Miami (MIA) on a $200 economy round-trip, you'd forfeit the difference in fare — a cool grand.

Customers lose residual value when moving to a lower-cost United flight. Photo by Zach Honig/The Points Guy.

There are some exceptions to this policy. Southwest has long issued credits when moving to a cheaper flight, for example, and American has committed to doing the same.

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Related: How to survive basic economy on American Airlines

Alaska and Delta have not yet confirmed their plans, however, and Hawaiian and United have both stated that the residual will be lost when moving to a lower-cost flight. In certain cases, this policy can be far more lucrative for the airline than a $200 change fee.

The most notable exception, however, is that basic economy tickets are specifically excluded from these waived-fee policies — and that, dear reader, is the third exception where I expect airlines to make up the majority of the difference.

Also: What to expect when flying Delta basic economy

Flexibility just became a perk of all "standard" economy tickets, which can cost anywhere from $15 to hundreds of dollars more than a basic economy ticket, each way. Take this Miami (MIA)-Philadelphia (PHL) trip below. You can book seven basic economy tickets for the price of a single regular economy seat.

Screenshot courtesy of American Airlines.

While basic economy tickets can be adjusted free of charge under current change-fee waivers, those policies are largely expected to expire at the end of the year. Beginning in 2021, flyers will likely need to buy up to regular economy to have any flexibility when it comes to changing their ticket, even if the pandemic's still impacting travel at that time.

I also suspect that we'll see even more differentiation when it comes to pricing in the future. In most cases, I've recently seen American and Delta offer regular economy buy-ups for $15 each way, with some exceptions here and there. United, meanwhile, consistently charges $35 to pay your way out of basic economy — buy-ups total $70 on a round-trip.

Related: How to survive Basic Economy on United Airlines

Once the basic economy change fee waivers are no more, and tickets become entirely unchangeable, customers will have much more incentive to pay a higher fee to move up to regular coach. As much as I hope $15 buy-ups stick around, we'll likely see rates jump significantly, giving airlines an opportunity to make up some of the revenue lost from these freshly eliminated fees.

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  • Annual Fee

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    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
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Why We Chose It

It's hard to find a card that competes with the mile-long list of benefits that come with the Amex Business Platinum. While it's certainly not the card for the average consumer, a business owner with tons of expenses -- especially related to travel -- will find this card incredibly valuable. This card is similar to the consumer version that Amex offers, but with more business-oriented perks around statement credits and earning rates that are a better fit for business owners.

Pros

  • An up to $100 credit for Global Entry or TSA PreCheck application fee every four to five years
  • Up to $400 annual credit for eligible U.S. Dell purchases (enrollment required)
  • Gold status at Marriott and Hilton hotels (enrollment required)
  • Access to the Fine Hotels & Resorts program and Hotel Collection
  • Extended warranty protection
  • International Airline Program and Cruise Privileges Program

Cons

  • Steep annual fee
  • Difficulty meeting $15,000 welcome offer for smaller businesses
  • Limited high-bonus categories outside of travel
  • The Points Guy Exclusive Offer: Earn 150,000 Membership Rewards® points after you spend $15,000 on eligible purchases with the Business Platinum Card® within the first 3 months of Card Membership.
  • Get 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com, and 1X points for each dollar you spend on eligible purchases.
  • Earn 1.5X points (that’s an extra half point per dollar) on eligible purchases at US construction material & hardware suppliers, electronic goods retailers and software & cloud system providers, and shipping providers, as well as on purchases of $5,000 or more everywhere else, on up to $2 million of these purchases per calendar year.
  • Unlock over $1,000 in annual statement credits on a curation of business purchases, including select purchases made with Dell Technologies, Indeed, Adobe, and U.S. wireless service providers.
  • $200 Airline Fee Credit: Get up to $200 in statement credits per calendar year for checked baggage fees, lounge day passes, and more at one selected airline.
  • $189 CLEAR® Credit: Use your Card and get up to $189 back per year on your CLEAR® membership. CLEAR® is available at more than 50 U.S. airports and stadiums.
  • The American Express Global Lounge Collection® can provide an escape at the airport. With more than 1,400 airport lounges across 140 countries and counting, you have more lounge location options than any other credit card on the market as of 9/2021.
  • $695 Annual Fee.
  • Terms Apply.