December 15, 2009

If only the airline industry operated like school, or even work, where a note from our parents (or a pathetic email/voicemail early in the morning) excuses us for the day. Nope. If you’re sick, have a family emergency, or last minute travel changes, the airlines have no sympathy. Change fees and cancellation penalties for passengers are steep. How steep? According to the 2009 filings by the Department of Transportation it is about $2 billion dollars across the board.  Here are some tips for navigating the penalty-happy industry.

Don’t expect a refund if you cancel, but expect to pay a penalty. Paying to change a non-refundable ticket can often times cost more than the original ticket. And guess who pays the most? Business travelers. Those last minute changes and cancellations for meetings cost your company a pretty penny and account for the bulk of that $2 billion in earnings the airlines soak up in ticket changes and cancellations.

Fees and penalties are on the financially painful rise. And those fees are going up as many airlines are raising their already dissatisfying penalties. Why during a recession? Well, higher fuel prices. The average change fee on domestic flights has gone up $50. What was previously a $100 burden is now $150 with most airlines. The penalty for international flight changes can reach up to $250 plus the difference in fares if the new one is pricier.

Business travelers should consider full-fare, restriction-free tickets as opposed to discounted tickets. The simple solution to painful penalties, say  airlines, is to simply buy flexibility with full-fare, restriction-free tickets. The high penalties are ultimately the airlines way of managing overbooking. Speaking of overbooking, even JetBlue has raised their penalties by charging $100 a change vs. the former more digestible $40 a change. Meanwhile, Southwest rocks the friendly skies by continuing to not issue ticket change penalties.

Be honest with yourself and your business travel history. If you book what you really want and trust that you will travel on the booked dates, then the risk of higher penalties and steeper restrictions are worth the cheaper price. JetBlue is an example of this. (See my RyanAir article too.) Perhaps we’ve grown accustomed to finding cheap flights and have grown to expect such deals.

At the end of the day, we’re responsible for ourselves. But it is unfortunate how unforgiving some of these penalties are. Non-refundable shouldn’t mean we can’t swap or resell our tickets. A word of advice: Don’t book that cheap flight unless you can commit to the departure dates. Or, make quirky Southwest CEO Gary C Kelly happy and fly his airline if you don’t mind flying amenity free.