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Fees And Penalties Waived By Travel Companies: Nice Or Strategic Move?

by Chris Owen (RSS feed) on Dec 9th 2012 at 4:00PM

Frequent travelers know that fees and penalties happen when we change plans. Booked elements of a travel plan, especially when discounted, often carry heavy charges to prevent changes. But when major disruptive events happen – situations beyond our control that force plans to be modified – travel companies often waive those fees. It seems like a logical, good business move to make. But sometimes they need a little encouragement to do so.

Weather events, like a hurricane, a massive winter snowstorm or even disasters far away like an earthquake in Japan can throw off air schedules, empty or fill hotel rooms and make normal operations nearly impossible. When that happens, airlines, hotels, car rental companies, cruise lines and more adjust quickly to do the best job they can under the circumstances. Commonly waiving cancellation or change fees for these situations out of our control, it's a show of good will by travel service providers. They don't have to do that.

But it's also a strategic move since the rescheduling is going to be done anyway, putting a severe strain on reservations systems and personnel. It's kind of like the boss that is mad when someone calls in for work vs. the understanding employer who wishes them well and hopes they get better soon. Either way, the worker is not coming in today but the understanding employer gains good will with his workers. The mad boss? Not so much.

As Hurricane Sandy caused aircraft to be grounded or moved out of harms way, United spokesman Rahsaan Johnson told USA Today, "We will likely suspend operations scheduled for tonight and tomorrow at several airports in the region. Conditions are likely to keep us from operating with an acceptable margin of safety." Delta went on to suspend change and cancellation fees, as did most major airlines, asking passengers to consider departing earlier, postponing or re-routing their travel. At the time of Hurricane Sandy, it made sense.

After the storm passed and normal operations resumed, back came the fees and charges. But on the ground, the lives of those affected where far from back to normal. Homes left standing were still without power in many areas, forcing residents to live in hotels, scramble to find a rental car and change plans well into the future. For a while, it looked like airlines were going to hit passengers with fees again until Senator Charles Schumer (D-N.Y.) stepped in to lobby airlines on their behalf. As a result, airlines reevaluated their policies and made the right move.

"JetBlue and Delta have stepped up to the plate for those teachers and families with students whose travel plans have been ruined by Superstorm Sandy - now other airlines and cruise lines should follow suit ASAP," said Schumer on his website. "Having to cancel a long planned vacation because of the storm is bad, but being forced to shell out hundreds or thousands in cancellation or change fees is worse."

Whether it is nice to do in order to earn or keep our good will, or a strategic move that should make resuming normal operations more efficient, we're always happy when fees we don't think are justified are removed, regardless or what (or who) caused them to happen in the first place.

Want to know more about how to avoid fees? See this video that tells us fees are big business for airlines, between 3 - 4% of their income:

[Photo Credit: Flickr user swanksalot]