The Problem with the $150 Change Fee

As you may have heard, the big airlines are now charging a massive $150 fee for all changes to non-refundable tickets. While this may look like a great revenue generator on paper, it’s going to cause some unique issues due to the fun-filled world of airline pricing.

What am I talking about? Well, my fiancee and I have tickets booked to fly to Indianapolis in November. We paid $242 roundtrip each (yeah, it was cheap), and now we’d like to change our return. I can go on to southwest.com as I write this and buy a new ticket for $120 all-in. So why would I pay United a $150 change fee on my original flight when I can just throw away the return and buy a brand new ticket for less than the change fee?

This problem will only continue to grow as the change fee grows. Maybe it’s not normal for a $120 one way fare to exist in a market like that, but think of all the short haul travelers that could easily buy a new ticket for less than the change fee. You might think that the airlines would like this since they could still have a chance at more revenue, but it doesn’t work that way.

Nobody is going to buy that second ticket on the same airline, because the airline might see it as a double booking and cancel it. No, the savvy traveler will give their business to another airline. The original airline will still keep all their money, but they’ve lost the chance at getting more (were the change fee $75 or $100 still, we’d just pay that since it would be cheaper). In addition, they’re now going to have no-shows on those return flights that they wouldn’t have had before. That will affect their future no-show predictions and could cause some serious overbooking issues, if this becomes widespread.

I’m not the only one seeing this as an issue. Wendy Perrin had the same problem and others are bound to be figuring this out. This is an issue that needs to be addressed. Money is being left on the table by sticking to a single change fee for all domestic fares and flights.