Data Dive: With $200 Change Fees Gone, How Much Will Companies Actually Save?

In recent weeks, the U.S. air industry’s largest carriers have done something that as of nine months ago would have been unfathomable: They’ve killed change fees on domestic routes… permanently. These new policies, meant to provide comfort to consumers by getting rid of the up to $200 cost of altering a ticket, will offer even greater benefit to companies.

How much benefit? For Emburse Analytics Pro Travel’s inaugural Data Dive, we dug into how corporate travel programs will gain from the loss of change fees.

Analyzing the data of 15 Emburse Analytics Pro Travel clients, we found the percentage of air spend that goes to change fees is 2.8%. That means for an organization with $95 million in spend on U.S. domestic air travel annually, $2.6 million is spent on change fees alone. With these new policies, assuming that all domestic air spend is with  the major air carriers, that’s $2.6 million that stays in the company’s coffers at a time when organizations are working to save every cent.

But beyond how much organizations spend on change fees, how often do changes occur? If we look back at 2019, we see that among that same sampling of Emburse Analytics Pro Travel clients, 11.2% of tickets had a change made to them.

Unsurprisingly, 2020 tells a different story for altered tickets. During the first quarter of 2020, 12.4% of tickets had changes made to them. By the second quarter, that share had more than doubled with 30.8% of tickets changed.

As we wrap the third quarter, we can see that in July and August 26.3% of tickets had changes made to them. That marks a slight improvement in recent months, but for some Emburse Analytics Pro Travel clients that rate still sits even higher at more than 50% of overall tickets changed.

Another consideration in this conversation is the average number of times changes are made to a ticket. Among that same sampling of Emburse Analytics Pro Travel clients, we found the average to be 1.8 changes per ticket for tickets that were changed. For some clients, the average is even higher at more than 3 changes per changed ticket. That means that for many companies that $200 change fee hits not just once, but multiple times on a single air ticket.

It’s no wonder when you consider the numbers and cost involved in altering an air ticket that the major carriers would look to eliminate change fees as a way to improve customer relations coming out of COVID-19.