Alaska Airlines follows United, Delta and American in scrapping hefty flight change fees

Alaska Airlines announced Tuesday that it will be permanently scrapping its flight change fee for all domestic and international bookings, following in the suit of Delta, American and United who all implemented similar policy changes earlier this week, effective immediately.

The decision to eliminate the long contested, onerous fees comes as an effort to entice customers to re-take to the skies as the air travel industry tires to re-stabilize from the economic turbulence brought on by the coronavirus pandemic.

Alaska’s $125 fee will now be waived for all customers, except for those who booked basic economy fares, akin to the policies announced by their competitors over the last 48 hours.

But the Seattle-based company has step further than the competition by extending the policy to all international flights – not just domestic and selective international journeys.

In announcing their policy change, Executive Vice President and CCO Andrew Harrison said in a statement that COVID-19 has taught the company ‘that flexibility in travel is key’.

‘As we evolve our approach to travel to include more than 100 safety actions, it’s important to give our guests flexibility when they book by eliminating change fees,’ he continued.

Similarly to the other airlines, Alaska is extending its flexible travel policy through December 31, 2020, on all new ticket purchases, including Saver fares.

In addition to enhanced flexibility for its customers, Alaska is seeking to enhance their piece-of-mind through the introduction of its layered safety approach, consisting of nearly 100 Next-Level Care measures designed to protect guest.

Such measures include a mandatory face covering policy for all customers and staff, blocking off the middle seat for all mainline flights and introducing a series of touch-free service options to help limit person-to-person contact.

Alaska’s announcement comes a day after Delta and American announced the elimination of their $200 flight change fee.

According to an announcement on Delta’s website, all tickets for travel within the US, including Puerto Rico and the US Virgin Islands, will be exempt from the onerous charge, with the exception of Basic Economy tickets.

Similarly, American said only Basic Economy tickets will still be subject to a change fee, but extended the policy for flights to Canada, Mexico and the Caribbean as well.

The two airlines follow rival United, which on Sunday became the first US legacy carrier to standard to eliminate economy and premium cabin flights, as well as standby fees for all same day departures.

Much like Alaska, Delta, United and American were already waiving change fees through the end of the year to give travelers more flexibility during unprecedented and uncertain times.

Prior to the coronavirus pandemic, the cancellation fees represented around two percent to three percent of their total revenues in 2019, though analysts said the overall financial impact going forward will be limited as focus remains on generating bookings.

Delta collected $830 million in ticket cancellation and change fees last year, American $819 million and United $625 million, according to the U.S. Department of Transportation.

For Alaska, the share was much higher, with the ancillary fees accounting for around seven percent of total passenger revenue in 2019, to a sum of around $567 million.

United CEO Scott Kirby said getting rid of the $200 flight change fee was a ‘top request’ from its customers.

Starting January 1, 2021, the airline said, passengers will also be able to fly standby on earlier or later flights on the day their original ticket was booked without having to pay a $75, one-way fee.

Those with United’s MileagePlus Premier member status will be able to get a confirmed seat on a different same-day flight, so long as there’s availability in the same fare-class cabin.

Additional changes have also been for award flight travel.

‘Change is inevitable these days – but it’s how we respond to it that matters most,’ United Airlines CEO Scott Kirby said in a video that was released by the airline Sunday.

‘When we hear from customers about where we can improve, getting rid of this fee is often the top request. Following previous tough times, airlines made difficult decisions to survive, sometimes at the expense of customer service. United Airlines won’t be following that same playbook as we come out of this crisis. Instead, we’re taking a completely different approach – and looking at new ways to serve our customers better.’ 

The companies’ moves fall in line with the no change fee policy that Southwest Airlines has long had and comes at a time when airlines are taking a massive hit as air travel has dropped significantly in the wake of the coronavirus pandemic. 

Delta CEO Ed Bastian said in a statement that eliminating the fee has ‘built on the promise to ensure we’re offering industry-leading flexibility, space and care to our customers.’ 

Delta also extended its waiver on change fees, including for international flights and Basic Economy fares, through the end of the year and will extend its expiration on travel credits through December 2022 for tickets booked before mid-April. 

The airline is also blocking middle seats through January 6 of next year as a COVID-19 protection measure. 

Both Delta and United excluded basic economy tickets from their no change fee policies. Although, American added enhancements to basic economy fares with more flexibility for upgrades, preferred and main cabin extra seats, priority boarding, and same-day flight changes. 

‘By eliminating change fees, giving customers an opportunity to get where they want to go faster with free same-day standby on earlier flights and providing access to upgrades and seats for all fare types, we’re giving customers the freedom to make their own choices when traveling with American,’ Vasu Raja, American chief revenue officer, said in a statement. 

The latest changes come at a time when major airline carriers are in desperate need of more revenue, as demand for air travel has plummeted with the coronavirus pandemic continuing to wage on.

The US Department of Transportation’s Bureau of Transportation Statistics said on August 10 that airline passengers in June had dropped 80 per cent from where they were in 2019. 

That is not as bad as in April and May, when passengers had decreased 96 per cent and 90 per cent, respectively, compared to 2019’s figures. 

The TSA has released figures showing how far air travel has dropped off since the middle of March, when coronavirus concerns began to hit the US hard and states began going into lockdown mode.  

On March 1, the TSA said it had screened more than 2.28 million travelers, close to the 2.3 million travelers it had screened on the same day in 2019. 

But, on March 16, those numbers began to drop off in a major way – only 953,699 were screened that day, compared to 2019’s 2.17 million screenings that same day.

Throughout April – during the height of the quarantine phase and pandemic in the US – the TSA reported that the number of passengers screened frequently fell to 80,000 to 90,000 people. In 2019, they routinely screened more than 2 million passengers. 

Since travel restrictions have begun lifting and cities are reopening, people have begun taking more flights. 

From June through August, between 500,000 to 800,000 travelers were screened by the TSA, however these numbers are still down by about 30 per cent from where they were in 2019, especially considering it was peak summer travel season.   

Airlines are scrambling to appeal to the fraction of people who are still willing to travel during the pandemic, particularly as the $25 billion government bailout funds they received to help stave off layoffs is ending.  

In 2019, the Department of Transportation said that US airlines had made $2.8 billion in ticket change and cancellation fees, according to ABC News, thanks to charging between $50 to $200 to make changes to domestic flight tickets.