COVID-19

United Airlines drops ticket change fees for domestic flights

David Brancaccio, Meredith Garretson, Erika Soderstrom, and Alex Schroeder Aug 31, 2020
Heard on: Marketplace Morning Report
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This could be the first move in more permanent changes to airline ticket pricing. Justin Sullivan/Getty Images
COVID-19

United Airlines drops ticket change fees for domestic flights

David Brancaccio, Meredith Garretson, Erika Soderstrom, and Alex Schroeder Aug 31, 2020
This could be the first move in more permanent changes to airline ticket pricing. Justin Sullivan/Getty Images
HTML EMBED:
COPY

Given the uncertainties of COVID-19, major airlines stopped charging penalties to change your ticket through the end of 2020. Now, United Airlines says it’s locking in the policy — it’ll be free to change in 2021 as well, as long as you didn’t book the low-price basic economy seats fare.

United made more than $600 million on these change penalties last year. Doug Cameron, deputy Chicago bureau chief for The Wall Street Journal, spoke with “Marketplace Morning Report” host David Brancaccio about this. The following is an edited transcript of their conversation.

Doug Cameron: It will be permanent till it’s not. The biggest contributor to these change fees were business people traveling, and they just have not come back. And if you listen to company earnings calls, everyone’s cut back on the travel, and probably will do so in some permanent fashion. There’s going to have to be a wholesale change in pricing strategies. And I think, David, this is just the first move.

David Brancaccio: Now, you have to be a little bit careful, right? Because when you search for your best ticket price, what often comes up first is the
“basic economy” fare, that’s what United calls it. And the change fee still applies to this very entry-level ticket price.

Cameron: That’s right. United, Delta and American all introduced these kind of stripped-down, basic economy fares to compete with the likes of Southwest and Spirit. The thinking is actually this is United trying to kind of hold on to this basic economy, competitive weapon against the low-cost carriers.

COVID-19 Economy FAQs

Are states ready to roll out COVID-19 vaccines?

Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.

How is the service industry dealing with the return of coronavirus restrictions?

Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.

How are hospitals handling the nationwide surge in COVID-19 cases?

As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.

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