I absolutely hate cancelling a non-refundable airline reservation. It feels like a kick in the gut, especially on “cheap” domestic airfares where the fee to reuse the ticket – $150 on most airlines – ends up eating away a significant portion of the overall ticket value.

Last week, I was unable to travel and had to cancel my United Airlines reservation from Reno to Seoul, South Korea. And since it was an international trip, the penalty to be able to use the value of that ticket on a future reservation is $250. Ouch.

I could have gotten around the penalty by purchasing a flexible or refundable airfare in the first place. But as I rarely cancel reservations and given the fare differential between the ticket I purchased and what a flexible fare would have cost exceeded my price tolerance (and was significantly more than $250 from what I recall), I elected to buy the more restrictive ticket. I took the risk.

It’s still painful to swallow the $250 penalty, though.

But Is It Fair?

My short answer is yes, absolutely. I agreed to all of the conditions of the fare I purchased when I bought it and I have no complaints against United. I’m not your average traveler, of course, and I have a rather intimate knowledge of the industry and know what I’m getting into when I buy a ticket.

This post is a sort of a departure from what normally appears here on Frequently Flying, but it came up after I spoke with a neighbor yesterday who was complaining about how unfair it was for her airline to charge her a penalty to change her flight.

I explained my reasoning as outlined above from my own very recent experience, but it did little to appease her. And I also brought up that when a person changes or cancels a flight at the last minute, the airline is (generally) unable to resell the seat in such a short timeframe. But that, too, fell on deaf ears.

Airlines deservingly get abuse from the traveling public when warranted, but I have to side with airlines on the way they price their “products.” Some airlines do a better job up-front in displaying fare differences when shopping for flights. American and Southwest’s graphical tables come to mind in this case. Others, such as United, default to the lowest fare for flight searches and the display does little to educate infrequent fliers on the various ticket options and restrictions.

While each airline seat might look the same onboard to the average traveler, the product mix of the fare types people purchased to sit in them is anything but similar.

Related posts:

Airfare Pricing Bucket and Airline Fare Basis Codes Explained

American’s New Bundled Pricing ‘Choices’ for Coach Travel

Involuntary Denied Boarding Compensation Explained

Posted by Darren | 13 Comments

13 Responses to “Are Airline Change Fees and Cancellation Penalties Fair?”

  1. Jackie says:

    but UA’s website is also great for choosing the EXACT fare bucket if you know what you’re doing

  2. Darren says:

    @Jackie: Very true, very true… I love that ability :-)

  3. Absolutely fair….because they are disclosed. If you don’t like the terms, buy a different ticket or don’t travel.

    Pretty simple.

  4. Charles says:

    Yes and No.
    I recently tried to cancel 3 tickets arranged using Deta miles. I honestly travel a lot but was unfamiliar with the draconian penalties involved in changing or cancelling Delta FF trips. I ended up speaking with “LEROY” who quite honestly put me into the ground with his nasty, unwarranted attack on my knowlege.
    Thank you Delta and Leroy, you helped me see the light. Delta, no more revenue from me.

  5. Jacob says:

    I agree with the concept of them, but it really would only be fair if it was last minute. If you cancel a month out or even a week out, good chance the seat could be resold. Therefore no justification for the fee.
    However, when the airlines cancel or delay your flight you are at the airlines mercy and have zero recourse. So when it’s your fault you pony up hard earned money n when it’s their fault your out of luck. This is why I oppose fees. If the airline gave me a check for $150 for delaying my flight 3 hours, I will gladly pay them $150 for when my schedule changes b

  6. Darren says:

    @Charles: Sorry to hear “Leroy” was nasty with you.
    @Jacob: I’d love a tiered penalty based on when you change/cancel, but that will likely never happen in the airline industry. The EU has a pretty generous compensation policy if a flight is severely delayed or cancelled, and there’s new fodder that shorter delays might get compensation (even for weather delays!)

  7. Nic says:

    under oligopoly or monopoly(at airport level), you think those fees are fair?

  8. Kris Ziel says:

    @Darren
    The EU just increased the threshold for compensation during delays, it went from 3/4/5 hours (depending on flight length) to 5/9/12 hours.
    http://www.fodors.com/news/eu-rules-again-on-passenger-protection-6580.html by none other than Seth Miller

    And yes, I think the fees are fair.

  9. Andy says:

    I always fly Southwest, and it is great. I love the free bags, no change fees and free snacks. Its pretty chehap too! Im wondering if anyone here has flown on the new Evolve interior. I have heard mixed reviews. I kind of want it for my trip next week(TPA-HOU-ABQ) but if its uncomfortable…help me god.

  10. Darren says:

    @Andy: Southwest certainly has the best change/cancel policy! I believe my RNO-LAS-RNO trip in January sported the Evolve interior. It was fine for an hour flight… not sure I’d like it on your itinerary.

  11. Kris Ziel says:

    Just a thought, but If someone picks up the last ticket in a low fare bucket, that will preclude another passenger from booking that cheap ticket, so they may go elsewhere. Once that passenger cancels, that seat may not return to the lowest fare bucket (correct me if I’m wrong, Darren), thus the revenue from the passenger who went elsewhere will never be had, and neither will that of the original traveler, just another reason fees are appropriate.

  12. Darren says:

    @Kris: You’re absolutely correct that when a passenger cancels their reservation, there are no guarantees that his/her “seat” will drop back into the fare bucket purchased. Where that seat re-appears would depend on the flight’s load and inventory management calculations at the time of cancellation. And if someone booked away from a flight due to lack of lower-class availability, the airline then thinks it can fill the flight with higher yield passengers. That person may be “lost” revenue, but in revenue management’s mind, they think there’s another passenger willing to pay more coming along later.

  13. Kels says:

    Whats not fair is when air flights are cancelled and you need to be somewhere. If air flights can be cancelled then you should be allowed to get a full refund cuz then theres no point on goin on the plane to a specific place at a certain time and the 5-10 hours later when the event is over you get a flight

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