United change fee now up to $200: Are airline change fees justified?
Once upon a time, in the dark days of the pre-internet age, airlines issued paper tickets. This process was far more costly than in the e-ticket age, as the airlines had to pay people to issue the tickets, along with printing and distribution costs. If a ticket needed changing, an airline employee had to spend time manually re-issuing the ticket, and then sending a new ticket by mail or express delivery to the passenger. Airlines offset these costs by charging a ticket change fee for discounted tickets, usually in the $50-$100 range. Some charge was fair, as it offset the real costs to the airline of making a change.
As in most industries, the invention and adoption of internet-based technologies drastically reduced costs for airlines. Instead of issuing paper tickets, carriers switched to electronic tickets. Changing tickets became a breeze; a process that previously took time, effort and distribution was now accomplished in a matter of a few keystrokes.
And yet, while these costs declined, ticket change fees continued to rise.
Late last week, United Airlines announced that change fees on discounted economy cabin tickets would rise from $150 to $200. So far United’s competitors have not matched, but unless the traveling public forces United to roll back this change it’s a safe bet that American, Delta and US Airways will soon match.
Are these change fees – whether at $150 or $200 – fair? It’s a logical argument that a company should be able to charge a fee for a service to cover its costs. For voluntary airline changes a fair fee would be $25-$50. But most airlines have so mismanaged themselves that they now rely on the revenue from these change fees just to break even. Instead of setting airfares at a sustainable level, airlines have engaged in a race to the bottom when it comes to providing value for money.
Airlines need to stop bleeding us to death with fees and surcharges, get their collective act together, and set fares at levels that don’t cause them to bleed red ink. Honesty and transparency have been severely lacking in the airline industry, and it’s past time to change that.