Why do airlines insist on selling non-refundable tickets?



Why do airlines insist on selling non-refundable tickets? How do you get the most bang for your buck with your extra air miles?  We answer these and other pressing travel questions. 

Q: With airline tickets, the reason many buyers seem unhappy with the service is because of the 'non-refundable', 'non-transferable' policy that most airlines have adopted. From my point of view, it seems that these restrictions could only lead to dissatisfied customers and a negative stigma attached to dealing with the airlines. Why then do the airlines insist on keeping these policies? Are there any laws that say they have to prevent tickets from being transferred (security etc.)?

A: Actually, some airlines do permit tickets (or fare value) to be transferred or spent on someone else in the case of a cancellation. Some of Frontier Airlines’ non-refundable fares can be transferred to another person for a fee of $50 (or $100 on their cheapest fares).  Mexican airline interjet allows name changes for $25. Over in Europe, Ryanair allows name changes for a stiff fee of 110 Euros, which often wipes out any value the ticket might have had. I don’t think there are any laws against airlines issuing a credit or allowing name changes, but doing so for free would rob them of their hefty cancellation penalties. Why more airlines don’t follow Frontier’s or interjet’s example, allowing a name change for a reasonable fee, is a mystery to me, unless they believe that doing so would result in a revenue hit or excessive administrative costs.  Clearly, if Frontier and interjet can permit this then there can’t be a government regulation banning the practice.

Q: I am planning a River Cruise trip to Europe this fall.  

Three persons are leaving from Knoxville, arriving in Amsterdam and one week later departing from Zurich. I have a travel agent handling the cruise portion.  Should she also handle the air portion?  Most importantly, I have 250,000 United miles.  What would be the best way to use them?

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A: Well, you might be in luck with your miles. I did a sample search for your itinerary on United’s MileagePlus section and I found seats available for exactly 250,000  miles in economy class with $71 in taxes and fees. That might seem like a lot of miles and it is; it would cost you $1220 were you to buy the ticket instead. But were you to only do a roundtrip from Nashville to Amsterdam (taking the train perhaps back to Amsterdam from Zurich at the end of your cruise), it would only cost 60,000 miles plus $217 in taxes, a better deal in my estimation. Your travel agent would probably come up with the same ticket price I did, more or less, for the “open jaw” ticket (Nasvhille-Amsterdam, Zurich-Nashville). Even with the cost of the train ticket to Amsterdam, I’d say spending 60,000 miles plus $217 for a $1200 fare is reasonable. But definitely see what your travel agent can come up with and make the decision from there. 

George Hobica is a syndicated travel journalist and founder of the low-airfare listing site