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American Airlines

American Airlines’ CEO Threatens to End or Change Non-Refundable Fares and Change Fees

American Airlines’ CEO Threatens to End or Change Non-Refundable Fares and Change Fees
Jennifer Billock

Congress is considering limiting what fees airlines can charge for certain things, and it may end up having a negative effect on the passenger experience, taking away certain “perks” that, while they angered customers up front, would be even more of a hassle to travelers if those perks were taken away.

Air traveler rights have been on Congress’ mind lately, and currently up for debate is the ability for airlines to charge fees to change nonrefundable tickets. Currently, most airlines will charge a fee of up to $200 to change the fares, something that many passengers tend to get angry about. Congress is looking to change that, though, by limiting what airlines can charge for adjustments to those tickets.

American Airlines is fighting back in its own way, suggesting it will stop allowing nonrefundable tickets to be changed at all if Congress passes the legislation.

“That non-refundable ticket is of value to us,” American’s CEO Doug Parker told reporters after a meeting, reported by Bloomberg. “We knew that seat was going to be filled. It allowed us to do other things. We sold the rest of the airplane knowing that seat was going to be filled.”

The idea to limit fees comes from a bill sponsored by South Dakota’s Republican Senator John Thune, who heads up the Commerce, Science, and Transportation Committee. It’s a bipartisan bill but has yet to pass the committee die to a time delay for other issues.

This is currently a hot topic among FlyerTalk readers, as well. Join the discussion here.

[Photo: Shutterstock]

View Comments (11)

11 Comments

  1. Overzeetop

    September 20, 2018 at 7:11 am

    Easy solution: legislate that fares for air travel may no longer be non-refundable. Airlines can’t afford to have seats unfilled and they use non-refundable fares to fill most of their aircraft seats. Congress needs to call AAs bluff.

  2. dogcanyon

    September 20, 2018 at 7:45 am

    This is an empty threat. They might try this for about 15 minutes, but unless every other carrier in the US instantly follows suit they will be forced to either backtrack or eat massive losses as customers switch to other carriers.

  3. Berniecfc

    September 20, 2018 at 8:45 am

    Some interesting comments made by greedy Doug again around change fees. Having been a victim of AA change fee policy, asked for a $200 change fee for a sub $200 flight is a little bit strong. Understand that you have bought a seat and AA have allocated to you but what if they subsequently fill it with a standby passenger? Is AA going to refund the change fee or will Mr Greedy double dip? I find the Southwest policy of keeping your money to be used as credit later the fairest way of doing business. Oh and they haven’t had the same financial problems as Mr Greedy’s airline has had in the past, perhaps he should be taking notes????

  4. mmff

    September 20, 2018 at 10:53 am

    Yet another move by blind regulators which is bound to backfire.

  5. JimInOhio

    September 20, 2018 at 1:03 pm

    The mistake in this debate is lumping refundable and changeable together. Refundable means getting your money back which airlines generally won’t do anyway unless it’s a refundable ticket (obviously). Why not a sliding scale of fees based on how long in advance of the flight a change is requested?

  6. kkua

    September 20, 2018 at 1:15 pm

    Let’s turn the tables… this would be a non-issue if each airline built a pricing model where their airfares allow for 2 flight changes without additional fees

  7. flyupfront

    September 20, 2018 at 3:30 pm

    I’m cool with the change fee, though I think AA should PAY ME $200 when they make an arbitrary schedule change.

  8. alangore

    alangore

    September 20, 2018 at 4:33 pm

    To me, a better approach than banning nonrefundables would be to allow passengers to resell or give away tickets they couldn’t use. The carrier still gets the economic value of all sales being final, while pax whose plans change can self-accommodate by trading tickets.

    And no, security would not be affected. Vetting the passenger who has the ticket is the TSA’s job, not the airline’s.

    How to implement this? Just mandate a flat $50 for name changes on tickets. This is still a profitable price point and would put an end to the charade of canceling and rebooking for a name correction.

  9. John Aldeborgh

    September 21, 2018 at 3:14 am

    Doug Parker is anti-Trump and now apparently anti-Customer as well. The notion of a non-refundable ticket is independent from non-changeable. If the airline labels a ticket as both non-refundable and non-changeable that’s fine as long are there is no chance of confusion and it’s truly both. Change fee’s are a scam, just like baggage fees, but these are now Integral to the airline business model, so we either accept them or ticket prices rise. It’s a zero sum game, the total dollars don’t change.

  10. alangore

    alangore

    September 21, 2018 at 7:05 pm

    Has Trump even weighed in on this problem? When you have spent your life in a world of private jets, you don’t even know what change fees are.

    Remember the Sessions confirmation, when we found that Donald of Orange didn’t know what civil forfeiture is.

  11. CreditMadeEZ

    September 23, 2018 at 7:52 am

    I would take flyupfront’s suggestion one step further. Let the airlines set whatever they want for a change fee on a flight, even a sliding scale like JiminOhio says. BUT, the same fee applies when the airline changes or cancels a flight and the airline pays the traveler.

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