United Permanently Eliminating Domestic Change Fees

by Enoch

With the Covid-19 pandemic significantly disrupting travel plans, U.S. airlines have introduced waivers that allow customers to change their flights for free. United is taking this one step forward, and is permanently eliminating change fees on domestic flights.

United Airlines Eliminates Change Fees Permanently for Domestic Flights

Effectively immediately, United is eliminating change fees on (most) domestic flights. This applies to both Economy and premium cabins, and applies to travel wholly within the following regions:

  • Continental U.S.
  • Alaska
  • Hawaii
  • Puerto Rico
  • U.S. Virgin Islands

The notable exception is traveling to/from Guam, where change fees will still apply.

This new policy applies to all standard Economy tickets, as well as all premium cabin tickets. It also applies to award tickets for travel within the above regions. You can make unlimited changes, but of course will have to pay for any fare difference each time.

Big Catch(es) of United’s Elimination of Change Fees

The biggest restriction of this new policy is that it excludes Basic Economy. For Basic Economy customers, changes to the ticket are simply not allowed. United does have a policy in place that runs until December 31, 2020 due to Covid-19, where Basic Economy tickets are exempted from change fees. Additionally, free changes is not the same as free refunds. Changes will still be subjected to the validity of the ticket based on fare rules, and while you can change the origin/destination and dates, you can’t change passengers or get money back.

Of course, while changing the flight is free, you are also on the hook for any fare difference. This is intentionally lop-sided—if you make changes and the new flights are cheaper, you do not receive a refund of the difference.

United Offering Free Stand-By For All

At the same time, United will also be offering free stand-by. Starting January 1, 2021, all United customers can fly standby for free. This effectively opens the possibility of a free same-day change for all passengers.

This policy gets better for elite members. MileagePlus Premier members can make a free same-day change and get a confirmed seat, as long as the same ticket fare class is still available.

Presumably, most passengers who would want to take advantage are probably trying to get on an earlier flight. This works to United’s advantage—they will be abler fill up seats on earlier flights that would have otherwise gone out empty. By consolidating customers, they and potentially can save themselves some trouble if irregular operations were to occur, or if a flight gets cancelled for any reason later in the day.

The Upshot

Airlines are big businesses and I am sure there are a lot of number crunchers behind every move like this one. United effectively has not been earning any revenue from change fees since March 2020 due to Covid. They have tons of data to work with, and likely know that going forward, the revenue from change fees is not worth the potential reduction in demand. Additionally, they already have a way of segmenting leisure passengers, with the introduction of Basic Economy a few years ago. These tickets are not changeable going forward, so eliminating change fees on “standard” tickets will be a great way to up-sell customers who wouldn’t buy a fully flexible ticket, but might pay a bit more for free changes. 

There is a fantastic Wendover Production video about how Covid-19 has broken the airline pricing model. In a nutshell, indicators and predictors on when or how travel would rebound is so poor, airlines can no longer use the tools and algorithms they have been using to fill their plane and extract the maximum of revenue. I suspect this is a main driver of why United chose to announce this change at this juncture in time.

All in all, I think on principle alone, this is a welcomed change. United is effectively doing what Southwest has been doing for ages. Perhaps like the elimination of expiration dates on miles, other airlines will soon follow. (ahem… American?)

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