Monday, January 7, 2013

Rebooking Fees

A few months ago I went on vacation, and it was lovely. A few weeks before we left I realized the cost of my flight had decreased by $250. I called the airline for a price adjustment and all they essentially did was change the price of my ticket. However, in order to do so, they had to cancel my ticket and then rebook me, a task that apparently costs $150 to perform. I don't really understand why it costs that much. Is the service rep on the phone being paid $600 per hour and so the fee pays for 15 minutes of her time? If that is the case, then it's no wonder airlines charge all sorts of ridiculous fees--it's to pay their employees an absurd amount (also if that is true, I am definitely changing jobs). Is it because it requires a lot of paperwork to change a passenger's documentation? Unlikely, because even though airlines and their employees sometimes seem very disorganized and painfully slow, I'm pretty sure they've upgraded to electronic records. And what about the issue of revenue dilution, aka, if you cancel and the airline looses the money because they can't resell the seat? Hotels, rental car agencies, even massage therapists all have a cancelation policy. I'm sure airline CEOs are smart enough to understand that. And with priceline.com and other discount flight locators, airlines should easily be able to sell a flight even at half the price, and fill the seat.
So seriously, can anybody explain this? How are airlines able to get away with this? What if other types of businesses started going with this model? "You want to change your hair appointment? That is totally fine. It will be a $150 rebooking fee, however."

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