If Fares Drop, Fliers Are Due a Refund--Maybe

One ongoing marvel of the travel industry since the airline deregulation of the late 1970s is the freedom the airlines enjoy in setting and resetting air fares.

Scalpers may be barred from demanding top dollar for a hot concert ticket as demand builds, but airlines are not prevented from doing essentially the same thing. There’s also no help, legally speaking, for travelers who buy a ticket in advance, then watch helplessly when a carrier later drops prices to stimulate demand.

Consumer advocates have argued that airlines should be required to make up those differences. “There’s no federal rule that requires this, and no absolute right that passengers have,� said Bill Mosley, a spokesman for the U.S. Department of Transportation. “It’s really up to the airlines.�

Now, here’s the surprise: Most major U.S. airlines have voluntary programs that, at least in theory, give passengers a chance to recoup money when fares decrease.

Each of the 10 largest passenger airlines in the U.S. has its own version. The airlines’ reservations representatives usually don’t volunteer this information (after all, these cases take employees’ time and bring in no new revenue). And because of policy restrictions, only a slim percentage of bookings are eligible for refunds. Still, representatives say, rebookings aimed at capturing fare sales happen daily.

The scenario: If a consumer asks the airline or a travel agent to rebook a ticket to get a reduced fare--and if the same category of ticket is still available--the airline will agree and refund some or all of the difference, depending on how the customer wants to be compensated.

In theory, an adept travel agent might discover such a fare change and tell clients. In fact, this alertness to changing fares is often one of the arguments for using an agent. But in 20 years roughly split between using travel agents and booking trips myself, nobody, airline or agent, has ever called me back to tell me about a lower fare.

Plenty of seasoned fliers, in fact, are unaware that they have any recourse.

“I heard about this a few years ago, and I thought, ‘Holy cow, everybody should know about this,’ � said Gary Schmidt, author of the consumer advice book “Fly for Less� and a travel agent for 15 years in Minnesota. “Not enough people are aware of it. But the problem is that it’s so complicated. By the time you pay for the rebooking [or examine availability], it doesn’t affect most fares.�

If you use a travel agent, Schmidt notes, you can prod the agent to double-check the fare by asking point-blank, “Will you call me if a cheaper fare comes along?� But don’t expect miracles. Since airlines began cutting back on their commissions to agents in recent years, agents are less likely to spend time on any activity that doesn’t produce immediate revenues.

Given the way fares fluctuate, if you buy a ticket several months in advance, it’s a good idea to check on prices every few weeks.

Like many aspects of the airline industry, the programs are virtually identical from carrier to carrier. Generally, if a traveler buys a ticket, hears of a sale and calls to be reticketed at the lower rate, the airline will check to see whether the discounted rate is available with all the same attached conditions as the original booking (including seat class, travel dates and other conditions noted below).

If so, most major U.S. airlines offer two options. One is a cash refund for the price difference, less a $75 service charge. (That’s no great favor for consumers, really. A passenger could cancel and rebook for the same amount.) The other option is a credit toward future travel with the same carrier. If you’re willing to accept that, there’s no service charge.

The best version of this policy seems to be from Alaska Airlines, which charges $35 for rebooking. (Like most of its competitors, Alaska also says that if you’re willing to take your refund in the form of credit toward a future flight, there’s no charge for the rebooking.)

With any of these carriers, there are three potential catches: First, the rebooking must take place before advance-purchase requirements expire. Say you buy a ticket Jan. 1 for an April 1 flight, and the restrictions include a 14-day advance purchase. If the airline cuts its fares in early March and you respond immediately, you can get in on the lower price. But if the airline waits until less than 14 days before departure to cut its fares (as many airlines do on their Internet fare sales), you’re out of luck.

Second, there must still be seats available at the sale price. So if you buy a ticket for $300 and the airline later drops its price to $200 and sells out its limited inventory of $200 tickets in three days, you get nothing if you call on the fourth day.

Third, if you take a voucher for future travel, that travel usually must be done within a year.

It’s hard to say how often travelers actually capitalize on these policies. At United Airlines, that is “very tough to quantify,� said spokesman Kurt Ebenhoch. At American Airlines, spokesman Al Becker said he had no numbers but that “the circumstance will happen a few times a day in just about every market. It’s a fairly common occurrence.�

Continental Airlines, TWA and US Airways have essentially the same policies as American, Delta Air Lines and United. So does America West (although an operator was unaware of the policy on my first call to the carrier’s toll-free number). Northwest Airlines offers the travel-voucher option, but not the cash-less-$75 option. Southwest Airlines also offers only travel vouchers.

Why don’t the airlines tell us when they’ve cut the price of a ticket we’ve booked? The obvious answer is that it would cut into their profits. But Becker of American asserts that it’s more complicated than that. With American Airlines carrying about 270,000 travelers every day, Becker said, “you’re dealing with people in enormous numbers, and there’s just a limit to what you can do.�

Christopher Reynolds welcomes comments and suggestions, but cannot respond individually to letters and calls. Write Travel Insider, Los Angeles Times, Times Mirror Square, Los Angeles 90053, or send e-mail to [email protected].