Is Delta Air Lines willing to take a potential $615 million gamble?
The Atlanta-based carrier is hinting that it might reduce – or even drop – the dreaded ticket change fee, with the hopes that the loss of the ancillary income is offset by an increase in extra business.
Last year, Delta made $615 million in ticket change fees through September of 2019, second only to American’s $622 million according to the federal Bureau of Transportation Statistics. Between the change fees themselves – up to $200 per person on domestic flights and $500 on international flights – and the difference in fares, it’s quite the hefty slice of revenue.
In an interview with USA TODAY in Las Vegas last week at the annual Consumer Electronics Show, Delta CEO Ed Bastian suggested that, at the very least, the airline is looking at that ticket change policy.
“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?” Bastian said.
Bastian added that he is fully aware of how the flying public perceives ancillary fees.
“When you think about our fee structure, I think there’s fees in there, and change fees are part of that, that people feel are punitive,” he said. “…I’m not suggesting that we’re going to make changes. We don’t know.”
Southwest Airlines does not charge change fees or baggage fees, although if you have to make a change to a ticket the carrier will charge you the difference in fares. Southwest has long maintained that it draws more business for its lack of fees than it would if it charged for bags.
If Delta did reduce or drop fees, it might convince other airlines to do the same
“The airline business is a copycat business,” CNBC airline and auto reporter Phil LeBeau told NBC Nightly News. “If one airline is successful with one strategy, other airlines will try the same strategy.”
