United Escapes the Cranky Jackass Award Despite New, Restrictive Schedule Change Policy

Cranky Jackass, United

This was a close one. When the news came out Saturday night that United was altering its schedule change policy to severely restrict refunds, I immediately dusted off the Cranky Jackass award and began typing furiously. But yesterday I got a clarification that softens the blow, so the Jackass goes back into the closet. I may not love this, but I understand it.

As Brian Sumers first tweeted, United has changed its refund policy on schedule changes. You can only get a refund if the schedule changes at least 25 hours versus your original plans. Previously, this was a 2 hour limit, so it is a very negative change. But why?

With travel demand tanking as this coronavirus spreads around the world, United took drastic measures this weekend by slashing its schedules. (I have an analysis of that change coming tomorrow.) This isn’t the first time we’ve seen a sudden shock downturn like this, and United should be praised for reacting quickly. As Sequoia Capital noted in its ominous letter on Thursday, “…nobody ever regrets making fast and decisive adjustments to changing circumstances.”

In this case, United was the first out of the gate, and it was smart to do so. Other airlines will have to follow at some point, but probably not before they lose more money than they had to lose if they had reacted faster.

That massive schedule change, however, put United in a tough position. The whole reason it was cutting flights was because it was trying to shore up its finances as demand disappeared, but it might have had to shell out a ton of money in refunds to people impacted by the change. That means this proactive change would have had the opposite of the intended effect.

That is quite the pickle, so you can understand why United decided to change its rules on when passengers can get a refund during a schedule change. With this new solution, it can hold on to the money.

That alone would absolutely make this Cranky Jackass-worthy, but yesterday I received more information than was originally reported from United spokesperson Leslie Scott:

We’ve made reductions to our international and domestic schedules and know many customers are impacted as a result.  Our goal is to rebook as many people as possible without interruption and right now, more than 90 percent of impacted customers are being put on a flight that is within 2 hours of their original booking. For any rebooking that goes beyond 2 hours, those customers can change for free or cancel altogether, and use the value of that ticket toward future travel up to 15 months from their original ticket issue date.

It’s the last piece that makes the difference here. It wouldn’t surprise me if this was hastily added after the angry Twitter mob exploded, especially since the updated travel agent policy didn’t include this information when I last looked. But how they got there doesn’t matter to me as much as the fact that they did get there… quickly.

Now, you can’t get your money back if the change is between 2 and 25 hours, but you can have that put into a credit which you can use in the future for any United flight. When the time comes to rebook, the change fee is waived, so it’s basically like holding a gift card for the value of the ticket.

There’s one other positive thing buried in here. Almost every airline has a rule that makes tickets valid for one year from the original date of issue. United last week extended that temporarily to 15 months in order to give travelers more time to use their credits.

What’s funny here is that United actually appears to just be exercising its options per the airline’s contract of carriage. Allow me to quote Rule 24, Section C:

C. Schedule Change- When a Passenger’s Ticketed flight is affected because of a Schedule Change that modifies the original departure and/or arrival time by 30 minutes or more, UA will, at its election, arrange one of the following:

1. Provided that the dates of departure and arrival must be within 7 days of the originally scheduled dates of departure and arrival, respectively, transport the Passenger on its own flights, subject to availability, to the Destination, next Stopover point, or transfer point shown on its portion of the Ticket, without Stopover in the same class of service, at no additional cost to the Passenger;

2. When a Schedule Change results in the cancellation of all UA service between two cities, at UA’s sole discretion, UA may reroute Passengers over the lines of one or more carriers in an equivalent class of service;

3. Advise the Passenger that the value of his or her Ticket may be applied toward future travel on United within one year from the date of issue without a change or reissue fee; or

4. If the Passenger is not transported as provided in C) 1) or 2) above and does not choose to apply the value of his or her Ticket toward future travel as provided in C) 3) above, the Passenger will be eligible for a refund upon request. See Rule 27 A).

Look at part 3. United has the right in there to let you use a credit for future travel without paying a change fee. It already had the language, but it just opted to let people get refunds if disrupted by more than two hours in the past. Now it’s shifting its plan to conserve cash.

United created a model and realized money was going to fly out the door with this schedule change. The airline then had to try to figure out how to prevent bloodshed in this very uncertain time. Is this solution as good for customers as the old policy? No, definitely not. But the reality is that it is a mostly fair solution considering the circumstances.

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18 comments on “United Escapes the Cranky Jackass Award Despite New, Restrictive Schedule Change Policy

  1. After years of heady growth, the global airline industry and esp. United among legacy carriers is now in cash preservation mode. We are still around a month away from the first quarterly financial report from a US airline (likely Delta as they usually are the first to report) but there is no doubt that the airline industry is facing its greatest challenge ever. While 9/11 was a US event that had global repercussions, this is a global event that has US implications. As the US’ largest international carrier and also Houston’s largest airline as the oil industry also is dragged into a global shootout, United is by far the most vulnerable.

    But make no mistake that other airlines including supposedly domestic-only airlines will be spared from enormous long-term impact. Unlike with 9/11, the legacy carriers are not sitting ducks while low cost carriers continue their expansion. There will be a wholesale rearrangement of route networks, market strategies, and pre-corona initiatives.

    United already had massive capital expenditure plans for 2020 which is why, on top of the market-specific downturns, it had to act first and act aggressively.

    In less than a couple weeks, airline stock values have fallen apart. Now, as demand evaporates at least for a couple months, airlines have to figure out how to survive this thing. Worldwide, some will make it and some won’t.

    Policies including refunds and rebooking as well as how long airlines will hold onto parts of their networks including previously underperforming hubs will soon be clear.

    United’s refund moves, just as its cuts, are just the tip of the iceberg.

    CF was an interesting place to hang out for the ride up. It will be even more interesting as major parts of 10 years of global growth for some carriers is unwound.

  2. This change is “a mostly fair solution” only for United. It’s mostly unfair to United’s customers whose travel plans are being disrupted because of the United schedule change. United should bite the bullet and stick to the 2-hour refund practice. United once again shows that it doesn’t care about customers’ needs and cares only about United’s profits.

  3. Good clarification. Its been an odd weekend that United, then Delta, then Southwest have given me COVID-19 email updates (what am I chopped liver American?). I am not sure what to think about United — on one hand all change fees are waived, but full cancellation is not allowed for a schedule change. Six one way, half a dozen another?

  4. Sorry, Cranky, but I have a different reading of the contract of carriage. You’re right in stating that according to 3, United has the right in there to let you use a credit for future travel, but it doesn’t say the passenger has to accept this credit. And according to 4, it appears to be the passenger’s choice whether to apply the value towards future travel or to request a refund.

    Of course, I’m not an expert in the language of contracts, so I’d appreciate it if someone more knowledgeable could clarify the issue.

    1. Ron – No, it’s saying United has the choice of what it wants to offer. “UA will, at its election, arrange one of the following”

      1. Also, the contract of carriage is exactly that – a contract. By purchasing the ticket, you are agreeing to those terms.

      2. United’s contract of carriage is a bit ambiguous. The opening clause says, “United will, at its election, arrange one of the following.” But 24.D. says, “If the Passenger is not transported as provided in C) 1) or 2) above and does not choose to apply the value of his or her Ticket toward future travel as provided in C) 3) above, the Passenger will be eligible for a refund upon request.”

        “Will be eligible for a refund on request” *should* mean that they *will* get a refund if they take action to make the request. But the word *eligible* is loosy-goosy. I might be *eligible* to win a prize in a sweepstake, but that doesn’t mean I’ll get the prize.

        (Note: I’m not an attorney, but I play one on the Internet.)

  5. With this new policy of a 25 hour delay to a journey, UA must have been looking at forward bookings and realized that they will have a fair number of passengers who will be caught up in the schedule shift.
    While it is good to see the airline working to rebook passengers in the short term passengers who opt not to travel due to COVID-19 stand to lose the most.
    When they rebook for a later date they must put their credit towards the fares in effect at the time of rebooking.
    At a time when capacity is tight due to the carrier withdrawing flights, the fares are sure to rise thus passengers rebooking at a later date will pay more for a new ticket even tho the change fees have been waived.
    At least that is my experience from 40 years in the airline industry.

    1. “passengers who opt not to travel due to COVID-19 stand to lose the most” – presumably, those of us debating this very issue aren’t affected by these new schedule change policies, as ‘opting’ not to travel is our choice, not enforced by UA. I’m due in San Francisco in 17 days – if I cancel, I’ll get $90 back (basically some of the Air Passenger Duty, I presume); the change fee on a restricted fare is close to $200. So glad this whole COVID-19 thing turned out to be a storm in a tea-cup…………wait a minute…

      1. Actually, they changed their policy overnight, so no change fee regardless of when travel was booked – have managed to alter my March LHR-SFO flights to June, for $140 fare difference; better than a kick in the undercarriage.

  6. Sorry but while I understand how this helps United, 25 hours is not a schedule change but a cancellation of that day’s flight. And as a cancellation I should have the right to my money back as they are not providing the service I bought. As I live in the EU there is a rule over here that any airline flying from the EU that have a delayed flight will have to pay a penalty. So if UA, or other airlines, think they can just willy nilly do a 24 hour schedule change claim then at least for those travelling from the EU will able to have a little more pressure to put on them.

    I am one to allow airlines reasonable changes, and lord knows since I book in advance I endure said schedule changes, but this is taking the Micky to call up to 25 hours a schedule change.

  7. If they have managed to rebook almost all their customers to flights within 2 hours, then allowing cancellations for 2+ hours shouldn’t be a big deal as that’s only a few customers, not all of them that can claim refunds.

    Also, how will this work with trips containing flights from Europe? The EU 261 rules say that if the flight is cancelled then the passenger can choose whether to accept an earlier rebooking, later rebooking at their choicce, or free cancellation. (Probably no compensation but that doesn’t change the rebooking/cancelation rights).

    1. Jason – EU 261 only applies to changes within 14 days of travel. These changes are outside, so there is no compensation.

      1. No compensation, but the airline must still offer the passenger a choice of rerouting at the earliest opportunity (including OAL) or a refund. The choice of which to take lies with the passenger. It’s only the 600 Euros compo that’s exempted for cancellations within 14 days.

        1. Exactly. Passengers can still choose to cancel for a free refund if they want, not just if United feels like it.

          (As an aside I think that force majeure/extraordinary circumstances would reasonably apply here even if the cancellation were within 14 days so no compensation anyway).

  8. TRUST me, United Airlines deserves the “award” and more!
    We are over 75 y.o.a. & had purchased round trip tickets in February ’20 to visit family in Los Angeles in April ’20. There was NO ability to ascertain procedures on United’s website regarding scheduled flights for high risk individuals (Diabetes & Infusions, in addition to age). OPTION? Hold on phone line for ONE hour!
    Then, I discovered they changed our return flight…with NO notification/option offered. Our 10 a.m. departure had been arbitrarily changed to 6 a.m.
    Obviously, that means an arrival at LAX somewhere around 4 a.m. That, assuming they would have informed us at some time.
    No refund, no apology, no accountability…at least we were granted a credit (which hasn’t been verifiable).
    If there were ANY alternate option, we would NEVER fly United again.

  9. I think the damage has been done and people are pissed. The timing is just wrong and they’re more concerned with keeping their shareholders happy. It’s a chicken and egg situation. If customers choose other airlines, shareholders will not be happy in the long run. Another question facing the industry is whether or not other airlines will follow suit.

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