OUR TAKE
Friendlier Policies for Travelers

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By Rick Aristotle Munarriz (TMF Edible)
March 20, 2003

You know that rigid, nonrefundable airline ticket you're holding? Well, it's feeling awfully limber these days. Facing traveler uncertainty at the worst time in the hobbled sector's history, air carriers are rolling out the one customer service few figured they were capable of -- flexibility.

Two weeks ago, American Airlines parent AMR (NYSE: AMR) announced its Comfort Level Policy. The plan does away with the standard change fees typically associated with rescheduled flight plans. While the initial plan only covered domestic and international travel through the end of March, the troubled carrier widened that window to mid-May earlier this week.

Others, such as Continental (NYSE: CAL), Delta (NYSE: DAL), and AirTran (NYSE: AAI), have followed suit by updating and expanding their flyer friendly policies last night. Bankrupted heavies United (NYSE: UAL) and U.S. Airways have also loosened the screws. While the initial plan was to allow free exchanges only if war broke out or if the Homeland terrorist advisory threat reached Code Red, many airlines have decided to bend the rules and make their flexibility even more flexible.

And why not? It's not as if planes are packed like sardine cans these days. Load factors continue to come in low, even as most major air carriers pare daily departures.

It's not just the friendlier skies that are caving in to consumer demands for more flexibility. Last night, Hotels.com (Nasdaq: ROOM) launched a similar plan. Leave it to the online lodging reservations specialist to hop on the trendy coattails. Last month, the Web-based travel agent began to offer a $20 gas rebate for folks booking rooms through its site.

Wait a minute! Isn't the hotel industry far more lenient than the rigid air carriers? Can't you call off some hotel reservations on the very night of your arrival? Yes, but many travel sites began tacking on their own cancellation fees to help compensate for dried up commission payouts throughout the travel sector.

The cruising industry has been slower to swing into action. Last week, Royal Caribbean (NYSE: RCL) rolled out its own cancellation policy, but with a few twists. It applies only to Mediterranean sailings, and passengers receive just 90% of the forfeited deposit on a future cruise.

But, you know how it goes in the travel sector. If one company rolls out lower fares or implements a new policy, survival banks on a good game of copycat by everybody else. Right now, these bulky air carriers are showing dexterity worthy of a Cirque du Soleil acrobat. The tenuous traveler is being coaxed into booking travel plans with fewer strings attached. War or not, it's just what the industry needed.

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