Qantas doesn't plan to follow US airlines in permanently dropping booking change fees, and could even slightly increase some fares to aid with post-COVID recovery, says CEO Alan Joyce.
United Airlines, American Airlines, Delta Air Lines and Alaska Airlines this week declared they would ditch fees charged for changing bookings on almost all domestic flights, except on their least-expensive 'economy basic' fares, in an attempt to woo passengers back in the wake of the coronavirus pandemic's decimation of travel demand.
Qantas and its low-cost offshoot Jetstar suspended change fees in May to provide passengers with "complete flexibility and certainty to make bookings and adjust them as they need," Joyce remarked at the time. On each airline's lowest fares, those fees would usually amount to between $55 and $99.
However, those change fees will inevitably return, Joyce forecast at today's CAPA Australia Pacific Aviation Summit.
"We did for the first time give complete flexibility on every airfare during this crisis, but is that going to continue indefinitely? It can’t."
Once passengers have more confidence that their travel plans won't be disrupted by border closures, change fees will return for the lower tier of heavily-discounted fares.
"I think when certainty comes back, I’m of the view that it’s a big part of how we manage (revenue and yield)," Joyce said.
"There is a product of fares for the corporate market that’s completely flexible (but) iIf every airfare is going to be completely flexible, then your revenue management system I think fundamentally breaks down over the long term."
Low-price fares would remain a vital part of the overall mix and would be especially useful for restoring the airline's cashflow, Joyce allowed, but tipped that prices would later increase to bring profitability back into the equation, especially if business travel is slow to rebound.
"What we're going to have to see, if there is a hit on some of the business traffic, is more of the slightly more expensive airfares being sold," although he suggested the uptick would be in the range of $10-$20, where "people might not even notice it."
Additional reporting by Chris Chamberlin