No-change-fee policies may only be the beginning of more customer-friendly airline updates in 2021
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Editor’s note: This post has updated with new information.
2020 didn’t turn out how anyone planned. And that’s especially true for folks in the airline industry.
But amid all the negative news, airlines have delighted customers and surprised industry observers with some positive policy adjustments.
In honor of airline week for the TPG Awards, we took a look at some of the flyer-friendly updates airlines made in 2020 — and explore some other positive changes that might be coming in 2021 and beyond.
United shocked the industry in August when it became the first legacy carrier to announce that it would permanently drop many change fees. These pesky $200 (or more) ancillary charges have long been a significant revenue driver for airlines. But with the pandemic causing so much future uncertainty, United clearly felt that the time was right to drop these fees.
Within three short days, much of the industry matched United’s move — Alaska, American, Delta and Hawaiian all announced similar no-change-fee policies. Of course, the U.S. airline industry is highly competitive, so when one airline makes a dramatic policy shift, the others usually follow.
That leaves JetBlue as the only major, non ultra-low-cost carrier to still have change fees. Of course, Southwest has never charged these fees.
Expanded change-fee waivers
Though nearly every U.S. airline now has a no-change-fee policy, the details vary widely based on the carrier. For instance, United won’t give you a future travel credit if you decide to switch to a cheaper flight, but American and Delta will.
Additionally, American and United will waive change fees for flights to select Caribbean destinations.
Delta took it further in December 2020, when it eliminated that pesky $200 (or more) change fee when making a modification to any Delta-issued international ticket, excluding basic economy. This includes all travel from North America to any destination abroad. All international flights operated by joint venture and codeshare partners are included in Delta’s no-change-fee policy — just remember that the ticket needed to have been issued by Delta to be eligible for a free change.
The airline also eliminated change fees for travel between the U.S., Mexico and the Caribbean in both directions. The policy is limited to international tickets from the U.S. for all other destinations.
Although these new policies are great news for travelers, there’s still some room for improvement.
For one, it’d be great to see airlines waive change fees to all destinations, including on long-haul international flights, like Delta did.
Likewise, the award ticket cancellation policies still vary by airline. The clear leader is American, as the carrier just announced that, as of Nov. 11, it will charge no redeposit fees for canceled awards — up until departure of the flight. This applies to all types of award tickets, including discounted Web Specials.
Delta, meanwhile, has removed the $150 award redeposit and reissue fee for only domestic awards, but that policy excludes basic economy redemptions. United won’t charge redeposit fees for any travel canceled more than 30 days before departure, but last-minute cancellations are still subject to fees.
As the pandemic continues to rage on, expanding the change-fee waivers to include international destinations and award redeposits would be a great way to bolster confidence in booking future travel.
More targeted, limited-time promotions
Over the past seven months, U.S. airlines have needed to incentivize people to take to the skies.
One of the best ways to do that is with limited-time promotions. Among others, American has offered a rebate on redemptions, and United has expanded its targeted Mile Play promotion. And Southwest Airlines created a mini companion pass offer in September 2020.
Every customer is going to have a unique return-to-travel journey. Some have already taken to the skies again, while others may be ready to fly again tomorrow. Still more travelers might wait for a vaccine. As such, expect to see many more targeted promotions, aimed to get a certain subset of people back in the air.
Reduced checked bag fees
In addition to change fees, the other most-hated airline surcharge is likely that for checked bags.
Airlines made nearly $6 billion on these fees in 2019 (per Bureau of Transporation Statistics data), so they’re likely not going away anytime soon. But if one carrier wanted to match Southwest and offer two free checked bags, the press would likely be all over it. Plus, it’s possible that travelers would shift their business to airlines offering free bags.
While it remains to be seen if a legacy carrier will ultimately waive checked bag fees, you can easily get free bags by carrying a cobranded airline credit card — or leveraging card perks such as the Amex annual airline fee credit.
Relaxed basic economy restrictions
One of the major trends in the airline industry over the past few years has been the proliferation of basic economy fares. Designed to match with ultra-low-cost carriers and better segment the market, these fares stripped out many of the typical inclusions in an airline ticket — seat assignments, carry-on bags, elite benefits and more.
Since Oct. 1, basic economy flyers on AA can now purchase upgrades, priority boarding, extra-legroom seats and same-day confirmed flight changes. Additionally, elite members are now eligible for upgrades, free coach seats and same-day changes when purchasing the cheapest fares.
In the hypercompetitive aviation industry, when one carrier makes a move, the others follow in lockstep. It’s only a matter of time before Delta and United match — or outdo — AA’s basic economy updates.
More status match opportunities
Before the pandemic, many were on the elite-status “hamster wheel,” myself included.
But as the industry recovers, some flyers will want to “cheat” on their preferred carrier and try a competitor. That’s exactly why we’ll likely see many more status matches and challenges in the coming months.
In October, Delta offered temporary Diamond Medallion status to top-tier elite members on other airlines. This way, these lucrative customers get a taste of the “good life” when flying Delta, in the hopes that they’ll change allegiances in the future.
Elimination of expiration policies
Of the major U.S. airlines, American, Frontier, Hawaiian and Spirit all have frequent flyer points that expire after a certain period of time.
If there’s one thing that we’ve learned from the pandemic, travelers value flexibility.
That’s exactly what members get with Delta, JetBlue, Southwest and United, all of which have loyalty currencies that never expire — regardless of how long your accounts lay dormant.
There have been improvements along these lines in 2020, however:
- American axed mileage expiration for members under the age of 21.
- Spirit announced a new loyalty program (to launch in January 2021) that will significantly extend the validity of miles — from 90 days to 12 months.
Though announcements like these along with limited-time extensions are good in the short-run, it’d be great if the aforementioned carriers permanently waived points expiration.
No-change-fee policies are just the tip of the iceberg for other possible changes coming to the airline industry.
With the pandemic upending conventional industry norms, we may see carriers reduce or remove checked bag fees, continue relaxing basic economy restrictions, add more paths to elite status and more.
Only time will tell what comes to fruition, but one thing’s for sure — airlines are going to need to do all that they can to convince the general population to take to the skies once again.
Featured photo by Alberto Riva/The Points Guy
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