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Why $250 Is Too Much for a Change Fee

If you have a nonrefundable international airline ticket, most airlines charge you a fee of $250 to exchange it. A new filing requests the Department of Transportation (DOT) to rule such fees excessive. Although the DOT has no authority over fees for domestic travel, it still has authority to require that "every air carrier and foreign air carrier shall establish ... reasonable prices ..." for foreign air travel, and DOT precedent defines "reasonable" as "reasonably related to the costs of providing the service."

Is that $250 fee reasonable? When airlines first decided to allow exchanges on nonrefundable tickets, they reasonably allowed travelers only to retain the cash value toward a future ticket, not get a cash refund. Furthermore, most set exchange fees at $25, again a reasonable amount. Since then, however, most lines have boosted exchange fees to a standard $150 for domestic tickets and $250 for international tickets. Clearly, those fees have no relation to cost and are instead intended for some combination of increasing revenue and discouraging exchanges. So the petitioner, attorney Donald Pevsner, asks the DOT to require that the fees be set at reasonable—and therefore much lower—than the current rate of $250.

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In the same filing, Pevsner asks that DOT require airlines to add language in their official contracts of carriage—the contracts that actually govern your transaction with an airline—that in the event of any schedule change, any traveler holding a ticket, even if nonrefundable, be entitled to a full refund. This filing raises two related but separate issues:

  • All airline contracts I've seen specifically say that their schedule is not part of the contract, that failure to conform to schedule does not violate the contract, that they are free to change schedules at any time, or some combination of those. Although failure to adhere to a schedule during bad weather and other events outside an airline's control should certainly not be construed as a violation of the contract, it's hard to see any why schedule changes in advance of travel should not be considered as contract violations, or at least the basis for a full refund.
  • All airline contracts I've seen include lots of detail about what they will do for affected travelers in the event of a last minute delay or cancellation—including an optional full refund on most lines—but none specifically addresses the question of advance schedule changes. Regardless of what might be "right," airline contracts should at least deal specifically with such cancellations.

The petition is posted as Docket DOT-OST-2012_0109-0001, which you can view or download as a PDF from Regulations.gov and where you can submit online comments:

  • As a consumer advocate, I support both the petitioner's requests and am accordingly submitting my comments.
  • On the other hand, some of you may view the petition as "another unnecessary interference with the free market."

Either way, I urge you to submit comments and let the DOT know what you think. Ordinary travelers don't often get the chance to have their voices heard: Don't waste this one.

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