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Why Do Airlines Keep the Assorted Fees When You Cancel a Ticket?

The Wall Street Journal answers a question my father has asked me for years:  When you cancel a nonrefundable ticket, why do airlines get to keep the roughly 16% of the fare that was actually taxes and fees paid to airports, the government, etc?

Answer:  Because that’s how the laws are written.  International airlines will refund the taxes, fees and fuel surcharges (sometimes more than $200) on an international non-refundable ticket.  However, in the US airlines keep all of that because they can.  The Department of Homeland Security says that airlines should refund you the 9/11 security fee ($10), but the airlines say they shouldn’t because refunding such small amounts would make them incur costs (oh, that’s funny – keeping those fees on a nonrefundable ticket is making passengers incur a cost.)

This has always bothered me (and now that you know, it will now bother you) – thanks to the WSJ for bringing it to people’s attention.  Nothing’s going to change (now is not exactly the time to ask airlines to start giving money away), but at least you know.

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  1. I know in the past, on Southwest “non-refundable” tickets that I have been credited back at least the Sept 11 fee, and IIRC a big chunk of the taxes. (For instance, on refunding an $X one-way non-refundable ticket, I get $Y back to my CC and $Z as a 1-year credit.)

  2. Maybe I am missing the obvious here. But if you cancel a ticket, you apply the value of the ticket (minus the change fee of $150 or whatever it is) to a future booking. I just did that. So assuming you fly on a semi-regular basis, I would think this “fee stealing” doesn’t really happen all that often?

  3. Yes and no – You’ll be paying the fees twice when you change the ticket. Fees are built into the fare on the initial ticket, and then when you change the ticket you’ll pay $150 plus the whole fare of the new ticket — that new ticket has fees built in.

  4. It can be said that you are paying the fees twice, but in reality it is the total amount you have put down less any penalty fee for changes that makes the math.

    The original ticket has a fare and taxes/fees. When you change it to another ticket, the whole amount less the penalty fee for changes is applied against the new fare/taxes total in the new ticket. In reality it is all about the total amount paid vs the new one and not a fare vs fare and fees vs fees.

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