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Skift Senior Aviation Business Editor Brian Sumers writes this column with a critical eye on the important global issues impacting the airline industry, from the middle seat of the last row in economy class to the boardrooms of the world's largest carriers.
UPDATE: A day after this story was published, United Airlines changed its refund policy for a third time in one week. Now, passengers can receive a refund if United cancels their flight and rebooks them more than six hours earlier or earlier.
“The relatively small percentage of customers who are delayed by more than 2 hours, but less than 6 hours, are eligible to cancel and retain the value of their ticket for future use, and in the case of special circumstances can work with our customer contact center to find a resolution,” a United spokeswoman said.
ORIGINAL STORY: Should you trust a business that changes its guidelines on refunds after you buy?
It’s a question some frequent flyers and I asked over the weekend in the midst of the coronavirus crisis, after a source pointed me to a change United Airlines made on its website. The policy change covered when passengers could get a refund after the airline messed up their plans.
If you bought a ticket before Saturday, March 7 — and thought to look at United’s website — you would have seen a policy that allowed you to receive a refund in most cases if the airline changed your flight by two hours or more, without your permission. On Saturday, the language changed, from two hours to 25, regardless of whether you bought your ticket before or after the website update.
A United spokeswoman said the airline had the right, since the two-hour rule never appeared in the contract of carriage, the multi-page legal document governing airfares that no one reads. But it still was a policy, clearly listed on United’s website. Under its old language, it protected people who had booked a flight on, say, Tuesday evening, only to learn they couldn’t fly until Wednesday afternoon. Usually, advanced schedule changes are rare, but they’re becoming more common since United plans to cancel at least 20 percent of flights this spring as travelers avoid airplanes.
That doesn’t seem fair, does it?
I blogged and tweeted about the policy, and some frequent flyers complained about it online. So did Brett Snyder, who blogs as Cranky Flier. You may not know Brett, but he has an outsize following among airline executives. On Tuesday, Brett, a former airline employee who is normally sympathetic to the industry, gave United his Jackass award, a rare distinction bestowed only on the worst offenders.
United told me late Tuesday that it made another change to the website language. The 25-hour restriction is gone, replaced not by a new number, but by the most vague information you can imagine. Now you’re most likely to get a refund, if “the scheduled departure or arrival time significantly changes.”
What does that mean?
It means the airline can make a case-by-case decision about whether you’re due a refund. Maybe you’ll get one if United cancels your flight and delays you for 24 hours. But perhaps you’ll be out of luck if the airline cancels your nonstop, and puts you on a one-stop landing six hours later than the flight you bought.
Or maybe you’ll get a refund if you throw a tantrum but not if you ask nicely. Then again, a tantrum may not work so well, as agents have been told they need not worry about customer satisfaction scores when denying requests. A memo said the airline wants to ensure “our frontline is not unfairly harmed in this unique situation.”
Now, let’s step back. Airlines are facing a crisis level they have not seen since after 9/11, period. They know they can’t let money go out the door, so they’re doing everything they can to avoid refunds. Instead, they’re giving credits for future travel.
United President Scott Kirby is even more concerned than his competitors. As other airline executives tried to remain positive, on Tuesday he outlined a scenario in which the airline loses 70 percent of expected revenue in April and May, and the environment does not stabilize for 18 months. He’s even planning for a situation in which the CDC tells people not to fly.
“My personal No. 1 objective and all of our No. 1 objectives, as we’re going through this, is to make sure we take whatever steps are required for United to survive,” Kirby said at the J.P. Morgan Industrials Conference.
I get it. Kirby understands the industry is in trouble, and I commend him for doing what it takes to get through. If that means irritating some customers or employees, I’m sure he’s OK with it.
But let’s not forget about trust. If airlines are going to make it, they need passengers to keep buying tickets. And changing the rules on passengers after they buy doesn’t seem like the right strategy. (Interestingly, an American Airlines spokesman told me its schedule change policy is codified in the contract of carriage, so if the airline switched it, it could only do it for new bookings.)
To understand why trust is so important, think about what airlines now are asking of consumers. They know travelers don’t want to commit to advanced plans, so most carriers are waiving change fees for new bookings. If you book this month and you want to cancel or change dates, many airlines won’t charge you extra money.
How altruistic, right?
But what seems like a customer-friendly policy is more an act of desperation. Airlines can handle empty planes for a few weeks or even months, but beyond that, they need money coming in. They must persuade people to book future flights, for events three or six or nine months ahead, even though no one knows what will happen.
If you trust that your airline will take care of you, no matter what, you might book now. But what if there’s no trust? Airlines are asking customers for no-interest loans on travel that may, or may not, take place. If airlines show they’re willing to change website copy at any time, without warning, why should passengers give it to them?
Maybe United’s passengers are better off waiting. If this pandemic is bad as expected, airfares will stay low for awhile. What’s the rush in buying?
Here’s the policy that was in effect from Saturday through Tuesday.
How much does @united want to conserve cash? Before Saturday, after a schedule change of more than two hours, United happily would refund you. The new policy is 25 hours. Spokeswoman said: "We do everything we can to rebook customers in as timely a manner as possible." pic.twitter.com/BgEQ1PsyHA
— Brian Sumers (@BrianSumers) March 7, 2020