Fees And Penalties Waived By Travel Companies: Nice Or Strategic Move?

by Chris Owen on

Frequent travelers know that fees and penalties happen when we change plans. Booked elements of a travel plan, especially when discounted, often carry heavy charges to prevent changes. But when major disruptive events happen – situations beyond our control that force plans to be modified – travel companies often waive those fees. It seems like a logical, good business move to make. But sometimes they need a little encouragement to do so.

Weather events, like a hurricane, a massive winter snowstorm or even disasters far away like an earthquake in Japan can throw off air schedules, empty or fill hotel rooms and make normal operations nearly impossible. When that happens, airlines, hotels, car rental companies, cruise lines and more adjust quickly to do the best job they can under the circumstances. Commonly waiving cancellation or change fees for these situations out of our control, it’s a show of good will by travel service providers. They don’t have to do that.

But it’s also a strategic move since the rescheduling is going to be done anyway, putting a severe strain on reservations systems and personnel. It’s kind of like the boss that is mad when someone calls in for work vs. the understanding employer who wishes them well and hopes they get better soon. Either way, the worker is not coming in today but the understanding employer gains good will with his workers. The mad boss? Not so much.As Hurricane Sandy caused aircraft to be grounded or moved out of harms way, United spokesman Rahsaan Johnson told USA Today, “We will likely suspend operations scheduled for tonight and tomorrow at several airports in the region. Conditions are likely to keep us from operating with an acceptable margin of safety.” Delta went on to suspend change and cancellation fees, as did most major airlines, asking passengers to consider departing earlier, postponing or re-routing their travel. At the time of Hurricane Sandy, it made sense.

After the storm passed and normal operations resumed, back came the fees and charges. But on the ground, the lives of those affected where far from back to normal. Homes left standing were still without power in many areas, forcing residents to live in hotels, scramble to find a rental car and change plans well into the future. For a while, it looked like airlines were going to hit passengers with fees again until Senator Charles Schumer (D-N.Y.) stepped in to lobby airlines on their behalf. As a result, airlines reevaluated their policies and made the right move.

“JetBlue and Delta have stepped up to the plate for those teachers and families with students whose travel plans have been ruined by Superstorm Sandy – now other airlines and cruise lines should follow suit ASAP,” said Schumer on his website. “Having to cancel a long planned vacation because of the storm is bad, but being forced to shell out hundreds or thousands in cancellation or change fees is worse.”

Whether it is nice to do in order to earn or keep our good will, or a strategic move that should make resuming normal operations more efficient, we’re always happy when fees we don’t think are justified are removed, regardless or what (or who) caused them to happen in the first place.

Want to know more about how to avoid fees? See this video that tells us fees are big business for airlines, between 3 – 4% of their income:


[Photo Credit: Flickr user swanksalot]

Airline Fees: You Get What You Pay For Or Weapons In Travel Class Warfare?

by Meg Nesterov on

Last month, the media was abuzz over increased airline fees for pre-assigned seating, with many concerned that it would especially affect families who want to sit together for no additional cost. Even New York Senator Chuck Schumer got involved, asking airlines to waive fees for families traveling with children. Rather than look for victims or call airlines “anti-family,” however, look at the bigger picture. Airline seat fees are nothing new, but they are increasingly being used as another weapon in the arsenal against the airlines’ least desirable customer: the infrequent flier. If travelers will choose airfares based on a difference of nickels and dimes, does this force the airlines to nickel and dime the traveler?

The real divide in travel now isn’t between business and leisure travelers, families and singles, or even first class and coach; it’s between frequent fliers with airline loyalty, and price-conscious consumers who won’t hesitate to switch carriers for a cheaper fare. Savvy travelers who fly more than a few times per year understand that it pays to be loyal to one airline. In addition to earning miles for future trips, frequent fliers can jump to the top of upgrade lists, skip long check-in and security lines, and even waive many of the fees not included in the base fare. Travelers who fly only a year or less are more likely to book the cheapest ticket they find, even if the difference between carriers is just a few dollars, assuming the service will be similar (or worse, the same as they remember the last time they flew). What’s the incentive for airlines to give such passengers anything for free if they might never fly them again? “The customers that are more loyal, who fly more often, we want to make sure they have the best travel experience,” said American Airlines to Associated Press.

People are quick to call airlines greedy, and while they are looking to make money, running an airline is hardly a lucrative business these days. The Wall Street Journal recently ran a nifty graphic breaking down the cost of an average flight, showing that on a 100-person flight, the airline is making a profit off only a single seat. Between the rising costs of fuel, staff, security, insurance, and maintenance, most airlines are struggling to avoid bankruptcy or just stay in business. While you shouldn’t feel sorry for the airlines, understand that the alternative to fees is increased base fares, where you may be stuck paying for amenities you don’t need or want.As I’ve lived abroad for two years, I’ve become loyal to Turkish Airlines. They not only have the most flights from my current home airport in Istanbul, but I know I’ll always get a meal even on short flights, never have to pay fees outside of excess baggage, and even be able to use a dedicated check-in desk for travelers with children at Istanbul’s Ataturk Airport. I’ve often paid more to fly on Turkish Airlines than other carriers on the same route to guarantee the same standards of service. This makes me a valuable customer, and the more money I spend with them, the more perks I receive.

Earlier this year, I was looking for tickets from New York to Austin for a friend’s wedding. It was slightly cheaper to fly on American Airlines (my preferred carrier when I lived in New York) than Jet Blue, but as a solo traveler with a baby, I knew I’d be checking a bag and wanting to take my stroller up to the gate. Jet Blue would offer these services for free (American wouldn’t let me gate-check the stroller, but I could check it at the counter for free), and the overall cost would be about the same, plus I’d get free snacks and entertainment. In the end, I chose Jet Blue and was even given a priority seat without charge because the flight was relatively empty. If I were still based in New York and flying frequently, it would be more worthwhile to me to fly American to build my frequent flier status and miles for places I’d like to go.

As a parent who travels frequently with my child, I understand the potential nightmare separate seating could cause, but I also understand that airlines can’t make exceptions without making some passengers unhappy. If airlines were to waive a seating charge for families, travelers would complain about special treatment. Fliers with elderly parents would ask for exemptions to sit together, people with a fear of flying would want their travel partner close with no fee, and single travelers would feel they were being forced to subsidize everyone else.

Over at Huffington Post, my colleague (and fellow baby travel expert) Corinne McDermott contacted all of the major airlines regarding pre-assigned seating fees. Only Spirit Airlines explicitly said families should pay fees to be guaranteed adjacent seats. In fact, much of the hype about families being separated might really just be that: hype. Most airlines will try to accommodate people traveling together, just reserving preferred aisle and window seats to reward frequent fliers, or sell for an additional fee. It makes sense for an airline to offer a premium like preferred seating for free to a loyal customer, and instead try to make as much money as possible for a customer they may never have again.

Instead of spending time writing angry comments online, spend that time educating yourself about the full cost of an airline ticket and decide where your priorities lie: do you want to pay the absolute lowest fare and expect nothing more than a seat, or do you want to pay for service instead surprise fees? The old axiom “you get what you pay for” is the new reality in airline travel.