Charities Lose As Airlines Grasp For Profits From Unused Tickets

Excerpted from WSJ “Why Fliers Can’t Donate Unused Tickets” By Scott McCartney, Feb 10, 2009

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“I was absolutely flabbergasted” by Delta’s response, said Mr. Zizzo … He had the unused tickets after canceling a trip because he and his wife suddenly had to care for an elderly relative.

Delta, like other airlines, says it doesn’t allow name changes on tickets …  Most airlines make their tickets “nontransferable” to protect their fare structures and maintain control of their inventory. Otherwise, entrepreneurs might hoard cheap tickets and then resell them at higher prices closer to departure …

Travelers can fly later on their unused tickets by applying the value of the ticket to another trip to any destination after deducting change fees. But most airlines require the new ticket to be in the original passenger’s name … The restriction means that when plans change, consumers are often left holding nonrefundable tickets they can’t use … many end up getting thrown away.

How many? Airlines won’t say. Airlines don’t break out revenue from “spoiled” tickets and won’t publicly estimate how many tickets are never used … One thing is clear: Spoilage is big enough to allow overbooking of flights — selling more tickets than there are seats on a plane because some customers typically don’t show up.

Industry insiders … suggested that about 2% of all tickets expire unused. One official put the figure as high as 3% of an airline’s revenue … Based on 2007 passenger revenue …  $1.8 billion to $2.7 billion worth of tickets are thrown away each year. Even after change fees, that’s enough to make a major difference for charities.

Organizations such as Make-A-Wish say they would be thrilled to make use of some of those tickets … Airline customers donated millions of frequent-flier miles to Make-A-Wish, resulting in about $3.6 million worth of tickets for 880 families. But the organization had to purchase tickets for 7,790 other wishes granted …

Carriers say they won’t make exceptions for charities, and don’t have any mechanism to convert donated tickets to miles, gift cards or airline vouchers that could be transferred to approved charities … Some carriers said they didn’t have the technology to allow donations; others said that even though they charge change fees, the cost of allowing donations is the main hurdle …

Making airline tickets transferable isn’t a security issue. The TSA says the airline simply has to check passenger manifests against extra-security screening criteria and no-fly watch lists before departure. “TSA does not have a rule directly forbidding the transfer of airline tickets,” a spokesman said …

To Mr. Zizzo, the airline policy doesn’t make sense. “If I don’t use the tickets, they get to put $700 in their pocket,” he said. “With the economy the way it is, it makes sense to use everything available, especially for someone in need.”

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