Smart: Frontier Airlines May Increase Revenue By Reducing Change Fees

@Ben
Probably a good move for F9. However, the airline is now managed by a former Spirit guy who is known for being extremely rude and aggressive, so this may help them to achieve more revenue in the short-run, but in the long-run, they won't be able to keep customers. F9 used to be a decent airline yet that's not the case anymore and their customer service keeps getting worse and worse.

This is an issue with airlines cancelation penalities. People have no incentive to cancel. Better to wait and hope your flight is cancelled or very delayed. With the move to ancillary revenue, getting a butt in seat is becoming almost as important as the actual fare for the cheap way advance purchase tickets.

From a rational standpoint, airlines should have a system where they offer people who want to cancel some pecentage of their paid fare. For a sold out Friday afternoon flight In two weeks, it could well make sense for an airline to give me 100 bucks back if they think they can sell the seat for 400 bucks. For a Wednesday afternoon flight that never sell out, maybe 10 cents. Between the opportunity to resell a seat and get ancillary revenue it's not rational to give people no motivation to cancel even when they know they can't take the flight.

I'm surprised that particularly (U)LCCs haven't implement a system whereby you cancelling gets a % of the ticket back when cancelling, with a set upper limit for how much you can lose.

Or, say that cancelling/changing for than 100 days away is free, and then within 100 days you get the % back of the ticket that is the number of days til the flight. Would be a neat solution.

Smart move by F9. most of their sales with $20 fares are almost always for flights < 90 days. i'm somewhat surprised that they included the cancellation fee elimination as well.

This move by Frontier could be a real win-win for the airline and the passenger as you outline. Bravo to Frontier. I'd be more inclined to book them for discretionary trips with this new policy.

Of course lowering the price of something can increase overall revenue/profit. F9 didn't claim the move was a revenue loss to help the consumer. They simply said the new policy would make it easier to book early and that seems to be the case.

In a similar vein, could you write an article discussing the fact that US based airlines all make their international C class fares changeable, but nonrefundable? Just looking at a BR fare to BKK in December, the cost came to roughly $5,500 as did DL. The DL fare was nonrefundable, while BR charged a mere $100 to cancel. LH seems to charge a reasonable cancelation fee transatlantic as well. Why would anyone risk that much money other than to earn status?

I'd like to see an airline try this: you don't buy a ticket for a particular seat, but instead u buy an option to purchase the seat at a fixed price any time up until the flight takes off. The airline can run the options market in case you want to sell your option to someone else, taking a cut.
It'd be similar to the way tickets are now being "reserved" for college bowl games w/ essentially an options market.
If you no-show/cancel last-minute, your option expires, and the airline keeps whatever you paid for it.

The real reason why is that they're lowering the fees before the government makes them lower the fee.

Why did anyone not see this. More people will book knowing their ticket can be refunded.
Interest rates are going up. This is like getting 0% interest loan from you to reinvest in anything.

If they can sell the ticket for more than $20, why did they sell it for $20 in the first place?