An American Airlines flight from North Carolina to Florida dropped tens of thousands of feet in a matter of minutes on Thursday, resulting in a "scary" experience for passengers on board.
27.07.2023 - 18:33 / smartertravel.com / Tim Winship
Thanks to the DOT, U.S. airlines are required to allow customers who book non-refundable tickets more than seven days in advance to either 1) hold the reservation for 24 hours before being charged for it, or 2) pay for the reservation but cancel within 24 hours and receive a refund.
The industry-standard policy is the latter. And it’s easy to see why: Forcing customers to pay up front, even with the option of requesting a refund later, gives the airlines control of passengers’ payments, some of which are surely never refunded, through inertia or inattention.
There was one high-profile exception to the general rule, American, which until last week allowed travelers to wait 24 hours before either paying for their reservations or allowing them to lapse. Given the alternative, it was a notably customer-friendly policy. And one which certainly resulted in lost revenue for American.
RELATED: Alaska Air Buying Virgin America? Say It Ain’t So!
As it turns out, it was unsustainably customer-friendly, as is often the case with policies that both fail to maximize revenue and diverge from the mainstream. Why be nice when there’s no competitive pressure to do so, and it’s costly?
So on Friday, April 1, American initiated a stepwise adoption of the more conventional, more lucrative booking rule. To begin with, up-front payment will be required for bookings not made on American’s website. And eventually, probably sooner rather than later, the policy will be extended to AA.com bookings as well.
There’s no word on whether or when the new policy might cover AAdvantage award bookings. For now, such bookings can still be made with a generous five-day hold before miles are committed.
An American spokesperson, quoted in USA Today, explained the move as follows: “We’re making the switch to minimize the customer confusion that arose sometimes because our policy was different from those of other airlines.”
Minimizing confusion or maximizing revenue? Whatever the motivation, the change is gonna come.
Reader Reality Check
Did you find American’s 24-hour-hold policy confusing?
More from SmarterTravel: Southwest Partners with Rideshare Service Airline Employees Behaving Badly Alaska Air’s Bad Day – Highlights and LowlightsAfter 20 years working in the travel industry, and 15 years writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.
We hand-pick everything we recommend and select items through testing and reviews. Some products are sent to us free of charge with no incentive to offer a favorable review. We offer our unbiased opinions and do not accept compensation to review products. All items are in stock and prices are accurate at the time of publication. If you buy something
An American Airlines flight from North Carolina to Florida dropped tens of thousands of feet in a matter of minutes on Thursday, resulting in a "scary" experience for passengers on board.
How much will you be charged for that hotel stay? The answer, of course, should be obvious: You’ll pay the published rate, plus government-imposed taxes and fees. Whatever that total turns out to be is your price.
When an airline’s own pilots call its service “outright embarrassing,” and deride the company’s corporate culture as “toxic,” you can safely say that airline has a problem.
In a big win for Uber, the ride-sharing service today announced a new partnership with American, the world’s largest airline. “The companies will work together to provide customers faster service, better airport navigation, rider promotions and mileage promotions.”
Bad news for the airlines often translates as good news for travel consumers.
That 10 percent AARP discount for Hyatt stays? Per Hyatt’s website: “Act now. Offer Expires January 31, 2016.”
Enter the American Airlines “Your Vacation Spot” sweepstakes by April 1, 2016, for a chance to win the grand prize: a $10,000 American Airlines Vacations travel voucher.
In a first for a U.S. airline loyalty program, Alaska Airlines is offering members of its Mileage Plan program the option to redeem miles to pay for TSA PreCheck service.
Flying to Europe between now and July 31? Good. Flying on a first-, business-, or full coach-fare ticket? Even better. Because, bonus miles.
American Airlines’ AAdvantage program is 35 years old this month, and to promote that milestone, the airline is giving away miles:
Until yesterday, American Airlines customers dismayed at the airline’s August 1 pivot to a spend-based mileage program had a fallback option: Earn miles for their American flights in Alaska Airlines’ Mileage Plan program, which still awards miles the old-fashioned way, according to the distance flown.
In its latest effort to capture the hearts, minds, and expense accounts of the travel universe’s most privileged 1 percent, American is raising the bar for airport lounges.