There’s a Painful Catch to Those Discount Fares

Want a discount fare between Los Angeles and New York? A round-trip ticket will cost you as little as $278. How about the fares between Buffalo and Chicago? Yes, there are discount seats on these flights, too; a round-trip discount fare costs $108.

The highly discounted, or Q fares, exist on dozens of other runs. Some examples: For only $218 you can fly between Dallas and San Francisco, between Denver and Pittsburgh or between St. Louis and Miami.

The good travel news is that, with few exceptions, discount air fares are still very much with us. Most airlines are still pushing them, as summer travel statistics did not live up to expectations, and fall passenger volume also promises to be slow.

If you’ve traveled on discount fares, you know the rules: You must book and pay for your tickets at least 14 or 30 days in advance (depending upon the market and the fare offered).

But now there’s an additional, and often quite painful catch: Almost all Q fares carry a stiff penalty if you change the ticket once you’ve bought it.

Stiff Penalties

As a result, a lot of travelers are paying much more for their tickets than they’d bargained for. In some cases the penalties are so stiff--between 25% and 50% of the original cost of the ticket--that some passengers are forfeiting their flights altogether.

For example, if a passenger changes his flight plans after buying a $278 Q fare ticket on TWA from Los Angeles to New York, the penalty assessed for changes would be an additional $139. If he changes his plans for his return flight from New York once he’s flown there, he’s in worse shape: His return ticket is now worthless, and he may have to pay as much as the full coach one-way fare of $490 to fly home.

Consider the plight of Marilyn Bart, a retired schoolteacher who lives in Northridge, Calif., and her daughter, Leslie.

Leslie was scheduled to receive her doctorate in industrial psychology from Ohio State University. Marilyn Bart and six other family members all planned to attend the degree ceremony in Columbus. They booked their Q discount fares more than a month in advance at a cost of nearly $2,000.

“But we were told that Leslie wouldn’t know officially about the Ph.D. until her dissertation was accepted,” Bart said, “and that won’t be until two weeks before the ceremony. If it’s not accepted now, then Leslie won’t get her degree until December. If we have to cancel our reservations the penalty from TWA is 50%, or almost $1,000. It’s unfair, unreasonable and unconscionable.”

Growing ‘No Shows’

The airlines argue that the penalty fees may not always be fair or reasonable, but they have become a financial necessity. Officials point to a growing “no-show” percentage on their flights, passengers who book seats but don’t show for the flights. On some heavily traveled routes, supposedly sold-out flights have often left the departure gate only half filled.

The financial ramifications can be great. American Airlines has estimated the value of its “spoiled” seats--seats for which reservations were made but which were not filled--at more than $27 million. TWA estimates annual spoiled-seat losses at more than $100 million.

“Once it leaves empty, you’ve lost it. You can never recover that revenue.”

Now the airlines are trying to recover at least a part of it.

In the process, they’re angering a growing number of discount-fare passengers.

“We’re getting a lot of complaints about these penalty fees,” said Con Hitchcock, legal director for the Aviation Consumer Action Project (ACAP), a nonprofit watchdog group based in Washington.

“The cornerstone of deregulation,” Hitchcock said, “is that there would be more competition in the industry, and as a result there would be more choices for the consumer.”

Hitchcock is right. Unfortunately, in producing more airlines, airline seats and more choices, deregulation has also created fewer full airplanes. Hence the penalty charges.

Cancellation Insurance

Special flight cancellation insurance plans are being marketed by travel agents. But most such insurance only covers passengers if the flight itself cancels, or if the tour operator who booked the flight goes bankrupt. No insurance policy covers losses in the event a passenger has to change his plans.

However, if your flight plans on a discount ticket have to be changed because of a medical emergency that affects you or a member of your immediate family, most flight cancellation insurance will reimburse you for any penalty fees.

But most airlines will waive the cancellation penalties when presented with a letter from your physician at the time you check in for your flight.

There are those who claim that the no-show statistics presented by the airlines to justify these fees are misleading and that the penalty fees are being used as a means of generating additional revenue.

(Once a seat has been canceled and a penalty assessed, nothing stops the airline from reselling that seat. Not surprisingly, the seat can be resold at a higher fare, as it’s more than likely that it will be sold less than 30 days before departure and not eligible for discount fare.)

An argument has also been made that the charges should only be assessed if a passenger is a no-show and hasn’t notified the airline before the flight.

And there is also confusion as to which fares contain the penalty provisions for cancellation. For example, the lowest Q fare, between Dallas and San Francisco, requires a 30-day advance reservation and purchase and carries a 50% cancellation penalty. But a 14-day advance purchase Q fare between the same two cities costs just $20 more and carries no penalty for cancellation.

Hands-Off Position

Don’t look to the Department of Transportation for help. The federal agency charged with overseeing the nation’s airlines has adopted a hands-off position when it comes to the penalty fees.

“This area comes under the umbrella of deregulation,” said Hoyte Decker, chief of the consumer affairs division of the DOT. “It’s not an area of government responsibility. The consumer is open to choosing between the highly discounted airline ticket that has restrictions attached, and a higher-priced ticket with no restrictions.”

Some think that the penalty fees are a good idea. Ray Greenly, director of consumer affairs for the American Society of Travel Agents, said, “After all, if you have tickets to a Red Sox game and you miss that game for whatever reason, it is highly doubtful that you will get your money back for that ticket when you go to the box office the next day.

“Airline tickets should be the same thing. If you purchase a ticket and the airline reserves that space specifically for you, it’s your responsibility to pay for that seat whether you choose to fill it or not.”

ASTA’s chairman-elect, travel agent Francis Goranin, agrees. “The idea of using the fee is not a bad one, because people have overly abused the option of canceling their airline flight reservations by just not showing up.

“However,” Goranin added, “the travel agent is then put in a precarious position in that when they are rewriting tickets, they then have to collect the penalty fees for the airlines. The public then thinks we’re the bad guys.”

One final note: Leslie Bart got her doctorate on schedule, the Bart family kept their flight reservations to Ohio and thus avoided the stiff penalty charges. Whether they got the seats they wanted is another matter.