I hate to make negative predictions, but I can’t help but feel like this is only the start of a trend that we’re going to see a lot more of in the coming years…
Some award tickets now cost up to $1,750 to cancel!
There’s a lot to love about redeeming miles & points, especially for premium cabin travel, given the amazing deals that are sometimes available.
Broadly speaking (there are many exceptions), one of the great things about redeeming miles is that award tickets typically offer more flexibility than those booked with cash. For example, while some airlines have eliminated change fees on many types of cash fares, that doesn’t mean you can refund them for free, but instead, you can cancel for a credit toward a future flight, within some amount of time.
The nice thing about redeeming miles is that airlines typically have no change or refund fees on awards at all, or otherwise, have minimal fees, at least compared to cash tickets. I’ve written a guide to airline award ticket fees, which outlines the policies of various airlines.
For example, I absolutely love how all American AAdvantage awards can be canceled or redeposited at no cost. It’s so nice to be able to lock in awards in advance, and then change or cancel them as the departure date approaches.
Quite frankly, given the limited amount of saver award space nowadays, this kind of method is often needed to optimize miles — you book something that’s good enough, and then closer to departure, you switch to something better, if available.
But there’s a generally frustrating trend that we’re seeing, whereby airlines are increasingly aligning award fare classes with revenue fare classes, and implementing similar fee structures for changes or cancellations.
For example, this is something that Etihad Guest has “pioneered,” and the lack of award ticket flexibility is enough for me to avoid the program whenever possible. The program allows no changes or cancellations within 72 hours of departure, and even outside of that, some types of awards just can’t be redeposited at all.
But there’s another program that’s now leading the way when it comes to absurd fees, as flagged by LoyaltyLobby. Lufthansa Miles & More has increasingly been aligning revenue fare classes with award fare classes, and that also means the policies are the same.
For example, the program in some cases now has redeposit fees of €1,000 for “flex” fares, which are supposed to offer the most flexibility, and redeposit fees are capped at €1,500, as it currently stands. Suffice it to say that a €1,500 fee for canceling an award is rough, especially when you could potentially book the same award through United MileagePlus, and pay no redeposit fees whatsoever.
What’s wild is that you pay more miles for the “flex” fare, because you want flexibility. But then a redeposit still costs €1,000.
I suspect this will increasingly become the norm, sadly
I hate to make negative predictions, but I think it’s worth being honest about the general trends we’re seeing in the airline industry.
I certainly hope I’m wrong, but I expect that five years down the road, tiered award ticket “fares” with different change and cancellation fees will become the norm rather than the exception.
Just look at what we’re seeing in the US airline industry, for example. Coming out of the pandemic, we saw airlines eliminate change fees, given the new level of flexibility that customers demanded in order to commit to booking tickets.
While airlines committed to this change being “permanent,” well, nothing in the airline industry is actually permanent. We’re now increasingly seeing airlines introduced tiered fare structures across cabins, and this includes things like the introduction of “basic” business class. So it’s no longer just economy where the cheapest fares lack flexibility.
The whole concept behind this is simple — airlines want to add punitive restrictions, in hopes of getting people to “buy up” to higher fares. We’re increasingly seeing even premium cabin tickets come with tiered fares, where flexibility is a major point of differentiation. That same principle can apply to award tickets in the same way it applies to revenue tickets.
We’ve slowly started to see this shift, but I imagine we’ll see it on a more widespread basis soon — airlines will likely introduce more tiered award fare options, so that award fares and revenue fares offer similar terms. We’ll see!
Bottom line
Unfortunately airlines are increasingly aligning revenue and award fare buckets, in an effort to extract as much money (or miles) out of each customer as possible. Lufthansa Miles & More might now be setting a record, with award fares having fees of up to €1,500, and even the “flex” fare in some markets having a €1,000 redeposit fee. I really don’t like this, but unfortunately, I fear this is only the beginning.
What do you make of this increased trend of tiered award fares with different change and redeposit policies?