Delta, American Airlines follow United’s lead, cut ticket-change fees

United Airlines announced they would scrap ticket-change fees for domestic flights in an effort to appeal more customers. Delta Air Lines and American Airline soon followed United’s lead, hoping that more people would fly despite the risks of the COVID-19 pandemic. Yahoo Finance’s Alexis Keenan joins The Final Round to break down the details.

Video Transcript

SEANA SMITH: From a COVID winter to an industry that's been hurt tremendously by COVID, and that's the airline stocks. But today, we had United taking some steps to get flyers back. The airline becoming the first to announce that it's eliminating fees for standard economy and also for premium cabin flights as well as the standby fees. Alexis Keenan is looking into this for us. And, Alexis, bold moves by United. And then later on this afternoon, we had Delta and American joining United and also dropping their fees.

ALEXIS KEENAN: Hi, Seana. Yeah, it took about 24 hours for Delta and American to follow suit there with United's move a bold one permanently eliminating change fees for domestic standard economy and premium cabin flights and also permanently eliminating those standby fees for same day earlier departures that made United for at least 24 hours the only US airline to do that, giving all customers that standby option for free.

Now, United also extended a temporary policy that allows an unlimited number of fee changes for all flights at least until December 31st. Now, United CEO Scott Kirby, he gave a video message talking about the airline's changing approach here. Listen to what he had to say about forever getting rid of some of these fees.

SCOTT KIRBY: You may remember that as we emerged from previous tough times, we made difficult decisions to survive financially but sometimes at the expense of customer service, either by adding new fees or cutting the things that made the experience of flying better simply because they were too expensive. United Airlines won't be following that same playbook as we come out of this crisis.

ALEXIS KEENAN: Now, no doubt a welcome change for passengers, one that definitely put some pressure on these other carriers. So far, Delta and American, they have not exactly matched the policies. Delta coming in and not going with those standby changes, but American picking those up, of course, all against the backdrop of all of the carriers saying and announcing over the course of the COVID-19 pandemic that they might have to make possible cuts depending on whether there's more relief coming from Washington. Shauna.

- Hey. I have a question, Alexis. That word "forever"-- I mean, I'm delighted that United is doing this. I mean, this is great for passengers. But that doesn't mean anything, does it? I mean, there's no way to enforce that United will do this forever, like 150 years from now, if they're still flying to Mars, they're not going to have-- you know, that they're not going to ever have a change fee.

ALEXIS KEENAN: Yeah, no question. And although Scott Kirby from United said, look, we're taking another direction, he kind of intimated that it was a mistake in the past when they rolled out these fees, that they weren't good for customers, and they weren't making the experience for customers any better, kind of nickel and diming passengers, if you will.

But, look, I have the same question. What does really forever mean? That's the way that United, at least, put it. But whether they stick long-term, I think it's going to be really challenging given the number of layoffs and furloughs that these companies are already facing and the low passenger levels.

You know, look, passenger levels started to come back in August. Early in August, there were reported levels coming back to at least March 17th levels, but they were far below year over year levels. So a lot of work still to be done here. But, you know, we'll see if United got a bunch of bookings in the last 24 hours with this policy.

- Alexis, I wonder if there's another way to read this. I mean, what does it say about just how dire the situation is for United? When you look at change fees, that is a huge source of revenue for these airlines. It had been pre-pandemic. The fact that they're getting rid of that, I mean, does that speak to the desperation the airline industry faces right now?

ALEXIS KEENAN: You know, perhaps it does. It is a huge revenue source for them. I would think that perhaps maybe they would have hoped they got more than 24 hours out of this policy and would get a big spike in bookings.

But, look, you know, United is one of the airlines that has announced that unless they get additional funding from the federal government by October 1st that they're looking at a total of 36,000 employees possibly having to be laid off. American has warned that 19,000 could face layoffs. Also, Delta saying-- kind of the outlier there saying that they're looking at 1,900 approximately-- just over 1,900 pilots facing furlough unless the union agrees to more concessions with the airline.

But indeed, it could be a kind of desperate measure by these airlines. But it'll be interesting to see if they do make a difference with passengers having at least some peace of mind that they'll have a lot greater flexibility, because you and I both know those fees are-- they were quite high.