The airline industry, yearning to bounce back from the prolonged global outbreak of COVID-19, is pulling out more tricks designed to get fliers back on board.
United Airlines on Sunday spiked its loathed $200 change fee for domestic flights and said that, beginning next year, customers can fly standby for free if a there’s an available seat on the same day as their previously planned flight. Earlier in the day, American Airlines took the sting out of a 55 percent reduction in its October schedule by adding service to warm-weather destinations like Florida and Mexico.
“The travel industry recognizes the importance of its most loyal customers,” said Victoria Walker, who writes for travel blog The Points Guy, noting that more carriers and hotels have been adding promotions. “What we’re seeing is the industry getting really creative and targeting people who are pretty set on traveling, be it for work or a change of scenery.”
Airline executives are having to innovate to get people traveling again to stave off the worst consequences for the industry, including massive job losses. The International Air Transport Association is projecting losses of $84 billion for its travel-services members in 2020, and the situation could get worse with the end of the summer travel season — once prime time for carriers.
American Airlines Group Inc. said last week it will cut 19,000 workers once federal payroll aid expires Oct. 1, capping a 30 percent workforce reduction since the coronavirus pandemic began. American was the first major carrier to disclose how much it will shrink operations as it adjusts to passenger numbers that are down 70 percent from last year.
And similar cuts may happen in Europe. Deutsche Lufthansa AG, Europe’s biggest airline, is working on further belt-tightening measures that could result in the elimination of 20,000 more jobs, Swiss newspaper NZZ am Sonntag reported Sunday. A spokesman for Lufthansa, which employed more than 138,000 people as of Dec. 31, denied the report when contacted by Bloomberg.
United’s new policy make it the first U.S. airline to permanently end change fees, which the company and its rivals temporarily scrapped earlier this year as the coronavirus pandemic gutted travel. United collected $625 million in ticket cancellation and change fees last year, trailing Delta Air Lines Inc. and American, according to the U.S. Department of Transportation.
“When we hear from customers about where we can improve, getting rid of fees is often the top request,” United Chief Executive Officer Scott Kirby said in a video message to customers. “Following previous tough times, airlines made difficult decisions to survive, sometimes at the expense of customer service. United Airlines won’t be following the same playbook as we come out of this crisis.”
The decision brings United’s policies closer to those of rival Southwest Airlines Co., which has never charged customers to change tickets, and is likely to pressure American and Delta to weigh the future of their fee structures. Even with the suspension of change fees this year, travelers at all U.S. airlines are required to pay any difference in fares if they switch to a different flight.
American Airlines reduced its October flight operations by nearly 55 percent year over year, cutting the amount of routes to cities that typically experience colder weather that time of year. The airline is trimming operations during the industry’s slowest period, the transition where vacation travel slows and business flights would normally pick up.
The carrier is adding 24 seasonal routes in the new schedule to try to capture more leisure passengers traveling from cold weather cities to warmer destinations, including flights to Miami, Phoenix and Mexico, American said in a statement Sunday. Most of the routes will operate on Saturdays.
American said earlier this month that it will end service to 15 cities on Oct. 7, heralding possible similar reductions by other carriers if the government doesn’t provide additional financial aid. Airlines that accepted a first round of federal assistance to help cover payroll costs had to agree to continue flying to all locations they were serving as of March 1. While the Transportation Department later authorized a halt to some flights because of sustained low demand, the broader restrictions are set to expire Oct. 1.
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