Nonrefundable, Really The days of banking unused nonrefundable airline tickets are over, at least for the moment for clients of the major carriers. Six airlines—US Airways, American, Continental, Delta, Northwest, and United—have announced changes in refundable fares, leaving meeting planners to consider the potential impact on company budgets and policy.
In brief, the airlines’ nonrefundable fares are now unusable after the scheduled date of travel if the traveler does not confirm itinerary changes beforehand. In the past, travelers could pay a fee to have unused nonrefundable tickets reissued within a year. Now, itinerary changes can be made before the date of travel for $100, but the full value of the ticket is lost if they don’t. Passengers who want to travel same-day standby will be charged $100 on American, Continental, USAir, United, and for most Delta flights (Delta Express is $50.) Northwest still permits standby travel at no charge. United and Northwest have excluded some of their higher priced nonrefundable tickets from the new policy.
The impact on meeting budgets will be significant for companies that are accustomed to booking travelers on less expensive nonrefundable fares and that face frequent meeting cancellations.
When Stephanie Bihlmire, meeting planner for Hillenbrand Industries, Batesville, Ind., cancels a meeting, the new meeting date typically is not known. "With the old policy, we were able to just put those tickets in the safe and keep them to use for something else," she says. Not anymore. "Normally if we were to cancel a meeting we would look at it like ‘Yes, we’re going to pay the cancellation fee at the hotel, but we’re going to save on the airline tickets and the ground [transportation costs] and in the long run cancelling the meeting is not going to cost us as much [as having the meeting].’ Now with the new fare changes, they’re going to be eating the airline tickets, too. So it’s not going to be beneficial for them to cancel."
How the new changes will affect meetings remains to be seen, with possibilities ranging from increasing use of more expensive refundable tickets (including zone fares), booking air closer to the meeting date, and considering cancellations more carefully.
"I definitely think there will be an impact on meetings, but it’s early to say what," says Julie Fenker, director of conferences and incentives for Oracle Corp., Redwood Shores, Calif. "I don’t think people are going to believe it until they see costs not being recouped. I don’t think they’re actually going to believe this is happening."