US United Airlines Permanently Eliminates Domestic Flight Change Fees

A Desperate Measure to Overcome the Sharp Decline in Travel Demand

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] United Airlines, one of the four major U.S. airlines, announced on the 30th (local time) via Bloomberg News that it will eliminate change fees for domestic flights only. This is a desperate measure in response to the sharp decline in travel demand caused by the COVID-19 pandemic. It is expected that passengers transferring to domestic flights within the U.S. will be able to reduce costs associated with schedule changes.

In a statement released that day, United Airlines announced, "Starting next year, passengers will be able to place their names on a standby list free of charge if there are empty seats available on the planned date when changing their schedule." This is the first time among U.S. airlines that a permanent elimination of schedule change fees has been implemented.

United Airlines' decision reflects the airline industry's judgment that a short-term recovery in demand is unlikely due to the direct impact of COVID-19. The U.S. airline industry has been cutting costs, including reducing staff, as demand plummeted and federal government support ended. Bloomberg News evaluated that it is unusual for an airline to voluntarily give up revenue from schedule change fees while airlines are engaged in a long and lonely battle for survival.

According to the U.S. Department of Transportation, schedule change fees account for about 2% of airline revenue. Last year, United Airlines earned approximately $625 million (about 740 billion KRW) from fees related to ticket cancellations and changes, while the top 10 U.S. airlines collectively earned about $3 billion (3.5 trillion KRW).

United Airlines' elimination of schedule change fees is expected to influence competitors such as Delta Air Lines and American Airlines, which have announced temporary suspensions of related fees until the end of September.

Scott Kirby, CEO of United Airlines, said, "We heard many requests from customers to eliminate schedule change fees," adding, "In past crises, airlines made difficult decisions to survive, sometimes sacrificing customer service, but we will not follow that precedent in this COVID-19 crisis."

Helaine Becker, an analyst at U.S. investment bank Cowen and Company, forecasted, "It will take 3 to 5 years for airline demand to recover to pre-COVID-19 levels," and added, "Until then, incentives such as waiving schedule change fees will inevitably continue to stimulate airline demand."

However, United Airlines will maintain schedule change fees for international flights.

This content was produced with the assistance of AI translation services.