Delta Gets a Lot Right: Will They Change…. Change Fees?

I read, with great interest, this article in USA Today from Dawn Gilbertson.

She talks about comments from Delta CEO Ed Bastian that hint that they are evaluating changing the way they approach change fees, in which he seems to acknowledge that customers find them punitive.

And they are. It doesn’t cost the airline anything to make the change – which can often be done online. The fee is just a fee that airlines can charge because most airlines (except the extremely customer focused Southwest) do.  Remember that even without change fees, there is often a fare difference. So a customer moving to a more expensive flight will always pay more. But these fees are so lofty (around $150 – $200 on domestic flights and as much as $400 or more on international flights) that they often amount to more than the ticket. And while airlines offer refundable fares, they aren’t a small amount extra… they tend to be double or triple the cost! So that makes no sense for a leisure traveler.

Dawn Gilbertson, in her piece, quotes Ed Bastian as saying: “How do you, with change fees or other fees that you have in the process, how do you turn them into something that people can understand more, why they’re there, and maybe provide greater value alongside it, or change the structure?”

Delta – the Airline vs. Delta SkyMiles

Now here’s the thing: Many regular readers of MilesTalk think that I dislike Delta because I often write about how opaque and untrustworthy Delta’s SkyMiles program is. And my opinion on the Skymiles program is alive and well.

But many don’t realize that my opinion on Delta as an *airline* is the polar opposite. They are an extremely well run company that puts the customer first. As an example, as other airlines work to remove in-flight entertainment and make your experience on-board generally worse to save a few bucks, Delta has expanded their IFE offerings.

Their Medallion program (ignoring the Skymiles component) is extremely compelling. Higher tier members get upgraded regularly and don’t need to use any upgrade instruments to do so domestically.

American, by example, requires the use of 500-mile upgrades for anyone who is Gold or Platinum on any flight over 500 miles – giving only top tier Platinum Pro, Executive Platinum and Concierge Key members free unlimited domestic upgrades.

I find that Delta planes are the most consistently modernized, with not just IFE but working Wifi and comfortable seats. Their Delta One product is solid. It may not rise to the levels of Asian carrier’s Business Class, but it’s a solid product all around.

And MilesTalk Facebook group members have told me time and time again that they will stick to Delta in spite of Skymiles because they like Delta *that much*.

And while Delta reps sometimes struggle with the intricacies of their own SkyMiles program (I’ve often had to help them with how to ticket partner awards), they are generally friendly and willing to help.

Recently, Delta has come out saying that they have a goal of making Wifi free for all onboard. And I believe them. While they say bandwidth considerations currently make this unfeasible, I wouldn’t be the least bit surprised if they were the first major carrier to make it free as a Point-of-Differentiaton (marketing speak!).

Regarding change fees, the point of this post:

There are two change fees at play in the current market.

All three major US carriers charge a change fee, in addition to the difference in fare to change a revenue ticket.

On award tickets, Delta will charge anyone below their Platinum Medallion level a fixed $150 a ticket to change or redeposit. You also cannot redeposit for any reason within 72 hours of travel.

American Airlines currently is the most flexible of all carriers, allowing unlimited changes to awards as long as the origin and destination don’t change. It’s $150 a ticket if you have to redeposit but if you have multiple tickets on the same reservation, it’s only $25 after the first one. However, American has been shifting more and awards to their dynAAmic Web Specials, which don’t allow any changes.

And United has a tier system, allowing free redeposits for Premier Platinums more than 60 days in advance of the flight up to $75 for general members. This rises to $50 for Platinum Premiers up to $125 for general members less than 60 days out.

So, for revenue tickets Delta is on parity while for awards they are the most punitive by a fair bit. And while credit cards like the Amex Platinum will reimburse change fees, wouldn’t it be nice if you didn’t have to pay it at all?

So I’m wondering what Mr. Bastian’s plan is. 

Delta could decide to relax rules on award ticket changes, perhaps making the changes far more reasonable with even the lowest Silver Medallion status? Or make changes free for all, while charging only for a wholesale cancellation?

They could also choose to reduce or do away with the change fees altogether on revenue tickets, perhaps limited to one free change per ticket, while still charging the difference in fare.

The potentially huge upside for Delta is, of course, becoming the lone major US carrier to relax the rules and standing to win over customers from AA and UA that would welcome increased flexibility. You might choose to ticket with Delta for that reason the same as you may choose Delta if they offer complimentary Wifi while the others charge.

The challenge, though, is two-fold: 1) The airline reaps enormous pure profit from the change fees. So the increase in business would need to more than offset that. 2) If the other airlines were to see a loss of business and follow suit, they’d all see a drop in profit with, at that point, no gain.

Of course, if Delta moves first they could pick up real marketshare while AA and UA debate matching.

What do you think? Would you fly Delta more if you could save on ticket change fees?

Let me know here, on Twitter, or in the private MilesTalk Facebook group.

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