QI am confused by American Airlines' new economy-class airfares, some of which let you change your date of travel and include a checked bag. Can you change your flights as many times as you want? Is the checked bag included for round-trip travel? More importantly, is it worth paying the higher fares, which seem to be $68 round-trip?
A The new American airfares, which were introduced earlier in December, may be a wise choice for some travelers. Airline passengers hate all those extra fees for bags and flight changes, and according to my emails and Twitter feed, many would like the extra perks to be "re-bundled" into fares (i.e., stop "nickel and diming us"). Well, American Airlines seems to be experimenting with fare bundling (as have Air Canada, Southwest and Frontier previously).
In brief, American's newest fare initiatives (and they are indeed "fares," not "fees"), which they call "choice essential" and "choice plus," offer several packaged perks for a set price.
For a $68 add-on, Choice Essential fares include no change fee on domestic flights, which normally costs $150 per change; one round-trip checked bag (normally $50), and "Group 1" priority boarding, which some airlines also charge for (Southwest charges $20 round-trip, for example, to board ahead of other customers).
For an $88 fare add-on, Choice Plus gives you all of the above plus a free same-day flight change (normally $75) plus a premium beverage (which costs $7 to $8 on American).
These fare add-ons (and again, they are fares, which will be taxed at the 7.5 percent federal air transportation excise rate, whereas "fees" are not taxed), are optional, obviously, but for some people they may make sense.
The "expectant grandmother" who isn't exactly sure when the baby will arrive and who normally checks a bag might be happy to pay just $18 for a "change fee insurance policy" rather than the onerous $150 fee (that fee is charged for each change, and I don't believe you're entitled to just one change per fare, although you will have to pay extra if the fare on your new flight is more than on your original one).
Business travelers frequently change their plans, too, so if there's a good chance the meeting will go shorter or longer than originally planned, paying $20 extra for same-day change flexibility plus a cocktail might be considered a "bargain."
There's no telling, of course, if American will keep these fares, or whether they will increase them later on. Also uncertain is whether American will end up losing money on change fees (in the first quarter of 2009, for example, customers paid American $116 million in change and cancellation penalties). It will also be interesting to see if other airlines follow suit.
Today's column comes from George Hobica of Airfarewatchdog.com.