A positive development that we saw in the civil aviation sector as a result of the coronavirus pandemic is the elimination of changeover rates on most types of tickets. It is not just that airlines have temporarily waived the change fees, but the major companies have “permanently” eliminated the change fees (whatever that means, because nothing in life is permanent).
United Airlines was the first major airline in the United States to announce that it would eliminate change fees permanently during the pandemic, but the carrier’s policy went from incredible to not very competitive in a few hours. That has finally changed.
United now issues residual vouchers for changes
The way the unchanged fee policy works is that if you book a qualified ticket and you no longer wish to travel, you can cancel your itinerary and apply the ticket price on future trips. To be clear, tickets are not fully refundable in the original form of payment, but you do receive a voucher for a future ticket.
But there was a big problem with United’s policy until recently – if you rescheduled your itinerary and your new flight cost less than the original, you missed the fare difference. This was in contrast to the policies of American and Delta, which issue residual vouchers when you change your ticket.
Just to give you an example, let’s say you booked a $ 500 ticket, canceled it and wanted to use your credit for a $ 200 flight:
- At United, you could use that credit for the flight, but “lose” $ 300 worth
- At American and Delta, you could use that credit for the flight, and then you would be issued an additional $ 300 voucher to use on future trips
Well, United Airlines has finally updated its policy in this regard – United Airlines will now issue a voucher if the itinerary you rebooked costs less than your original itinerary. There are a few things to note:
- This feature is only available when making reservations directly with United and initially is only available through the United app and over the phone
- The voucher is valid for one year from the date of original issue and is non-transferable
This is incredible news. United was leading the way when it announced its plans to eliminate change fees and, in the end, consumers were still winning compared to the previous policy, even losing residual value. However, with other airlines having introduced a more generous policy, United quickly became uncompetitive.
You now retain the residual value on United vouchers when changing flights
An interesting twist from the travel agent
Brett Snyder makes an interesting observation about United’s new change fee policy. You will only issue a residual voucher if you book directly through United, and do not book through a travel agent (travel agents can change tickets without charge, but cannot issue residual vouchers).
What happens if you book through a travel agent? Well, all United non-basic tickets booked through travel agents are refundable for a fee. The fee ranges from $ 100 to $ 400, depending on the type of fare:
This is potentially important and, for some people, can be an incentive to book through a travel agent. To be clear, we are talking about the tickets being legitimately refundable, in the sense that it will be the money that will be returned to your credit card, instead of a voucher for a future ticket.
Why is this useful? For example, let’s say you are a business traveler booking a $ 5,000 business class ticket that is non-refundable in cash. I’m sure many people prefer to pay $ 400 to have money back in their pocket, rather than a United voucher for a future flight.
This is a very interesting angle, as it makes practically all United fares refundable in the original form of payment for a fee, instead of just being changeable for free.
Now, I must mention that I have no first hand experience with implementing this yet. In other words, I’m not 100% sure if this applies to online travel agencies in the same way and, if so, what the refund process would be like.
Most United tickets booked through travel agencies are refundable for a fee
Result
United Airlines improved its rate policy unchanged. If you cancel a ticket and make a new reservation on a cheaper flight, you will now receive a voucher for the fare difference, which was not previously the case. This is a major development and, ultimately, it was necessary, since American and Delta have always had such a generous policy.
What I find equally interesting is that tickets booked through travel agents are eligible for a cash refund upon payment of a fee. For those who are willing to pay to get cash back instead of a voucher for future travel, this may be a reason to book through a travel agent.
What do you think of United’s adjustments to the unchanged fee policy?