Some award tickets are now priced at as much as $1,750 for cancellation!
There’s much to appreciate about using miles & points, particularly for premium cabin journeys, considering the fantastic offers that can sometimes be found.
Generally speaking (with many exceptions), one of the benefits of using miles is that award tickets often provide more flexibility than those purchased with cash. For instance, even though some airlines have removed change fees for many cash fare types, that doesn’t imply you can get a full refund, but rather, you can cancel for a credit towards a future flight, within a designated timeframe.
The advantage of redeeming miles is that airlines usually impose no change or refund fees on awards at all, or alternatively, charge only minimal fees compared to cash tickets. I’ve compiled a guide to airline award ticket fees, detailing the policies of various carriers.
For instance, I genuinely appreciate that all American AAdvantage awards can be canceled or redeposited at no cost. It’s wonderful to secure awards ahead of time, and then adjust or cancel them as your departure date nears.
Honestly, considering the scarce availability of saver award space these days, this approach is often essential for optimizing miles — you book something suitable, and as the departure date approaches, you shift to something better, if available.
However, a generally aggravating trend is occurring, in which airlines are progressively aligning award fare classes with revenue fare classes, and instituting similar fee structures for alterations or cancellations.
For instance, Etihad Guest has “pioneered” this practice, and the inflexibility of their award tickets is sufficient reason for me to avoid the program whenever feasible. The program does not allow any changes or cancellations within 72 hours of departure, and even outside that timeframe, certain awards cannot be redeposited at all.
Yet there is another program currently at the forefront in terms of outrageous fees, as highlighted by LoyaltyLobby. Lufthansa Miles & More has been increasingly aligning revenue fare classes with award fare classes, meaning that the policies are now the same.
For instance, in some cases, the program now enforces redeposit fees of €1,000 for “flex” fares, which are meant to provide the most flexibility, with fees capped at €1,500 for redepositing. It’s fair to say that a €1,500 fee for canceling an award is quite harsh, especially when you could potentially secure the same award through United MileagePlus, without any redeposit fees at all.
What’s astonishing is that you expend more miles for the “flex” fare, as you desire flexibility. Yet a redeposit still incurs a €1,000 fee.
I fear this will unfortunately become the standard.
I dislike making pessimistic predictions, but I believe it’s important to be straightforward about the prevailing trends in the airline industry.
I sincerely hope I’m incorrect, but I foresee that in five years, multi-tiered award ticket “fares” with varying change and cancellation fees will likely be the standard rather than an exception.
Just observe what’s happening in the US airline market, for instance. Following the pandemic, airlines eliminated change fees, responding to the new level of flexibility that customers sought to commit to ticket purchases.
While airlines pledged that this change would be “permanent,” well, nothing in the airline industry is truly permanent. We’re currently witnessing airlines introduce tiered fare structures across all cabins, which includes the advent of “basic” business class. Hence, now even economy fares have flexibility issues with the cheapest options.
The entire concept is straightforward — airlines aim to impose restrictive conditions, hoping to encourage customers to “buy up” to pricier tickets. We are increasingly observing even premium cabin fares adopting tiered pricing, where flexibility is a significant differentiator. That same principle is likely to be applied to award tickets just as it is to revenue tickets.
This shift has begun to emerge, but I expect it will soon become more widespread — airlines will probably introduce additional tiered award fare choices, aligning award terms with revenue fare terms. We shall see!
In summary
Regrettably, airlines are progressively aligning revenue and award fare buckets, striving to extract maximum funds (or miles) from each customer. Lufthansa Miles & More may now be setting a record with award fares incurring fees of up to €1,500, and even the “flex” fare in certain markets carrying a €1,000 redeposit fee. I truly detest this, but regrettably, I fear this is merely the start.
What are your thoughts on this growing trend of tiered award fares with varying change and redeposit policies?