Airlines

Delta, American drop domestic change fees, following move by United

Key Points
  • Delta Air Lines and American Airlines are the latest major carriers to sideline ticket change fees, one day after United Airlines announced a similar new policy.
  • Delta CEO Ed Bastian told CNBC that it was a "path we were on," notwithstanding the effects of the coronavirus pandemic.
  • The industry as a whole brought in more than $2.8 billion of revenue in related change and cancellation fees in 2019, down from a peak of $3 billion in 2015, according to the federal Transportation Department.
Delta Air Lines Inc. signage is displayed as a traveler uses self check-in kiosk in Delta Air Lines Inc.
Patrick T. Fallon | Bloomberg | Getty Images

Delta Air Lines and American Airlines said Monday they are dropping domestic change fees, mirroring an announcement by rival United Airlines on Sunday in a push to woo back travelers.

Atlanta-based Delta said the elimination of change fees is effective immediately and includes tickets purchased for travel within the United States, Puerto Rico and U.S. Virgin Islands for all tickets except basic economy. American's change also covers flights to Canada, Mexico and the Caribbean.

In an appearance on CNBC's "Closing Bell" Monday afternoon, Delta CEO Ed Bastian said management had for months mulled changing punitive policies for customers.

United happened to beat Delta to the punch, announcing that it would do away with its $200 ticket change fee.

"This was a path we were on. I think it's the right move by United, and we're pleased to confirm that we're staying on the path and .... [we] have eliminated those" fees, Bastian said. "They're not in effect currently and won't be coming back into effect once we get outside this year."

Bastian did not unequivocally say whether dropping the fees would be permanent. "They're effectively eliminated from this point forward," he said.

VIDEO4:2004:20
Delta CEO on eliminating change fees for travel within the US

Delta, United and American were already waiving change fees through the end of the year to give travelers more flexibility in an uncertain environment.

"By eliminating change fees, giving customers an opportunity to get where they want to go faster with free same-day standby on earlier flights and providing access to upgrades and seats for all fare types, we're giving customers the freedom to make their own choices when traveling with American," Vasu Raja, chief revenue officer of American, said in a statement.

The standby flight benefits will go into effect Oct. 1, the company said. A spokesperson with American declined to say whether the moves will be permanent for the carrier. 

Delta collected $830 million in ticket cancellation and change fees last year, American $819 million and United $625 million, according to the U.S. Department of Transportation. The industry as a whole brought in more than $2.8 billion in related fees in 2019, down from a peak of $3 million in 2015.

Shares of the three airlines closed down more than 3% on Monday.

The changes come as the three major carriers all consider furloughing nearly 6,300 pilots total as a mandate to protect airline jobs tied to a $25 billion federal aid package under the CARES Act to help the hobbled industry through the coronavirus slowdown. The mandate is set to expire Sept. 30.

"Hopefully we'll be able to mitigate those through work we're doing with the union," Bastian said on CNBC. Delta said more than 1,900 pilots face temporary layoffs without more aid from Congress.

As the economy makes slow progress from the throes of the Covid-19 lockdown earlier this year, passenger traffic has declined 70% year over year, especially due to a drop in leisure and corporate travel, according to the Transportation Security Administration.

"If we can't and don't get the extension, we'll be forced to go ahead with the furlough," Bastian said.

— Reuters contributed to this report.