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.