JC1976

http://www.bloomberg.com/news/videos...v-t-crosshairs

I don't think it will be easy to regulate the change fee amounts with different fare classes etc.
Its easier to set pricing regardless of it being roundtrip or not. You can see on the mobile app the price per segment now.

This year I've seen many fares in N class for long hauls and the price per segment cost less than the $300 change fee which isn't right imo.

Richard Chen

Jeff heads the lobbyist group that'll ensure the right purchases of Congressmen to avoid any regulation over change fees. There's also insufficient voter care for it, another primary measure of likely regulation. UA's former CFO said publicly that change fees are preferred due to lower taxation, less regulation & higher "flexability" (i.e. ability to raise them as far as they can).

NewportGuy

They may have crossed the line with some of these fees, as they obviously aren't meant to cover "costs", but instead are clearly punitive in nature. Then throw in "hidden" fees like charging to carry on or check a bag, which are also absurd on their face (who travels by plane without luggage? It's like a restaurant charging you for a menu, or for a chair at your table). Politicians love to push "evil" corporations around, especially in election years. Some form of regulation seems almost inevitable, and airlines simply don't possess the political power they may have once had.

The part I don't get is while imposing these fees, airlines (especially UA) continue to alienate their loyal customers. FF programs have lost all meaning, and what is amazing is that people like Jeffy seem to think the good times will last forever. Whether a down economy or massive increases in fuel prices, the world keeps turning, and bad times WILL return. When that happens, and travelers head for the hills, all those loyal customers who helped carry airlines through tough times in the last couple of decades will have vanished.

windhund

And this will be easy to continue so long as there is limited choice. At the same time, I'm not sure that it will change -- it's not easy or even economically feasible (since a lot of competition would result in a lot of duplicate networks, and networks have a high sunk cost and are expensive to maintain) to have a lot of competition. Utilities are often regulated monopolies for this reason.

While I doubt we'll return to an era of high regulation, I think we'll have to find a balancing point -- if the market is effectively an oligopoly, I think some measure of regulations might be reasonable to protect the public. I'd like to see a detailed analysis, but to me, there is effectively no competition on many routes. We have many airlines and airports, but once you narrow it down to non-stop flights between two points, there is usually one or two options to get you there. Not unlike cable and internet in many places.

BearX220

Actually, most or all fees charged by airlines over and above ticket price are completely decoupled from the "cost" of the associated service, which is often zero:

** Checked-bag fees
** Ticket change fees
** Close-in award booking fees
** Fees for single-trip "priority access"
** Fake YQ "fuel surcharges" on award tickets (on some other airlines)
** $10 for a disgusting $1.50 inflight sandwich
** Etc.

Nobody can argue with a straight face that a $200 charge to change a discount economy ticket is anything but a shakedown.

Then again, you add up UA's total revenue from these fees and I expect they constitute the lion's share of UAL profit.

Where's the "line" you say UA crossed? How do you legislate such a line?

The business model is evolving to a movie-exhibitor kind of thing where the provider breaks even on the core product and makes most of its profit at the concession stand. Nobody thinks a $10 bag of popcorn is anything but a shakedown, either, but you don't see government regulators coming after your local cineplex. Unlike movie tickets, airline tickets are at least historically cheap, allowing for inflation, much of the time.

I don't think you can legislate against this stuff. But consumers have to learn to play a better game of chess against the airlines. It's the companies, not the customers, who chose to design adversarial relationships filled with "gotchas."

The least they could do, though, is shut up about being "flyer-friendly" and "having your back" when everything about the actual transactional experience proves the opposite.

entropy

The YQ and close-in booking fees are the most egregious. The other stuff is avoidable, or unnecessary.

EWRMAN

What is the alternative to change fees? Probably higher economy fares. Legacy airlines really missed an opportunity marketing the different type of fares IMO. If they had been more upfront about the fees but made it clear that the fees are how they can offer discount economy seats from the beginning people wouldn't still be talking about them.

lilpisher

I have some concerns though about trying to legislate change fees. The alternate is that the airlines just make some ticket classes ineligible for change and truly non-refundable and non-changeable. If someone doesnt want to commit to a flight, he or she can buy a refundable ticket or wait to purchase.

raehl311

If you don't want to pay change fees, don't buy non-refundable airfare.

Airlines discriminate on price by charging for flexibility. The change fee is the enforcement mechanism that preserves that pricing.

Hell, one could argue that allowing people to change a non-refundable ticket AT ALL is going above and beyond.


I figure that the airlines are pretty safe from regulation on this until they start trying to hit anyone who shows up a bit late for a flight with the change fee instead of letting them go standby later.

BearX220

I don't think anyone's arguing your point. It's the amount that the change fee has climbed to recently that's the point. It used to be $100, or whatever -- and on Southwest it remains $0 AFAIK; you cna bank the whole value of an unused ticket. But on UA and its cartel brothers it's ballooned to $200 without any additional benefit to the customer. Ergo, shakedown. (And the lockstep hikes among the majors fuel the view that it's an operational cartel. Why doesn't one of the Big Four cut change fees to $100 to promote business? Naaaaah. Can't break ranks, and no need anyway given traffic levels.)

Kacee

It's always a pleasure to fly foreign carriers that do not impose punitive change fees. I recently changed a deep discount AV fare, and the fee was around $40. The very cheapest CX tickets have about a $105 change fee.

There's no doubt that US carriers can only get away with $200/$300 change fees due to the oligopoly.

transportprof

Most restaurants in Italy add a "cover charge" to your bill, which is supposed to help pay for menus, furniture, etc. And most restaurants in Italy offer a lot higher quality than their US counterparts. That's where the analogy to US airline fees and restaurant cover charges breaks down.

exerda

If the airlines offered a discounted prepaid "change fee" (e.g. the normal change fee is $200, but if you pay an extra $100-$150 up front, you can change it for "free"), I'd bite.

Unfortunately, the flexible fares are usually several multiples of the change fee above the discounted fares.

TA

Can the above posters explain why airlines should have to only charge what something costs them to provide?

Does Apple only charge the cost of parts of its hardware?

Do people charge only their cost of basic living when negotiating a salary?

Do sellers only charge the labor and parts cost of building a house in the sale price?

I'm not sure why there is an expectation that airline services should be a pure pass-through of the incremental cost of providing the specific task in question... rather than what the customer values it enough to pay. How would they ever make money?

Madone59

Exactly! I once had a CS agent say "Oh Geez, I'll just give you your money back so you can buy a new ticket!" when they saw the change fee was more then the price of my RT. It turns me all sorts of shads of red that the change fee can't be subtracted from the original ticket price.

So I paid you $300, the new flight is $380. To use my $300 I owe you $200? Did I just pay $580 for $380 worth of goods and services? Yes.....yes I did.