Beginning March 1, Amtrak’s popular “saver” tickets will be nonchangeable and nonrefundable, ending a popular policy that gave passengers the flexibility to rebook if their travel plans changed.
New rules will also establish restrictions for standard fares, the railroad said.
Amtrak said the changes will allow the company to introduce more “deep-discounted” ticket sales, and increase ridership and revenue in the system that carries 32.5 million passengers annually.
But the moves are likely to be widely viewed as another sign of Amtrak’s evolution into a system that operates more like airlines, with fees for extras and nonrefundable fares. Under the leadership of Richard Anderson, former chief executive of Delta Air Lines, Amtrak has turned to more airline-like practices, from serving prepackaged meals to introducing cancellation penalties.
Executive Vice President Roger Harris, who is Amtrak’s chief marketing and revenue officer and also a former airline executive, said the new rules around low-end fares are a trade-off that will allow the railroad to make “the very lowest fares even lower.” For customers who already purchase the lowest-cost tickets, it will mean the end of refunds.
“In other words, once you buy it, you use it or you lose it,” Harris said.
The shift follows a report in Business Insider in December on a leaked Amtrak memo laying out the planned fare restrictions. Amtrak has been tightening rules around ticket refunds and cancellations for several years. The company’s policy of giving full refunds to ticket holders ended two years ago, when it introduced a 25% cancellation penalty.
Such penalties have long been the norm in the airline industry, which says that nonrefundable fares help keep tickets affordable. U.S. airlines collected $2.7 billion in reservation-change and cancellation fees in 2018, according to data from the U.S. Bureau of Transportation Statistics.
Amtrak officials said they anticipate the new change and cancellation fees will yield about $10 million dollars a year.
Details of the restrictions, affecting mostly “saver” and “value” tickets are as follows:
– Passengers who purchase saver fares will be able to cancel or change their travel plans up to 24 hours after purchase. After 24 hours, the ticket will become nonrefundable, and no changes or upgrades will be allowed.
Currently, saver tickets can be canceled any time before departure – with a 25% cancellation fee – and be changed at no charge.
– Restrictions for standard or so-called value fares will tighten so that a 25% penalty may apply for cancellations or a 15% penalty for changes made within two weeks of departure, unless the passenger is changing or upgrading the reservation on the same train or day as the original reservation.
Today, standard fares are fully refundable if canceled eight days or more before departure. If canceled less than eight days before departure, the 25% cancellation fee applies.
– Passengers holding flexible, business and Acela First-Class Premium tickets will continue to enjoy the flexibility to make changes and receive a full refund up to the moment of departure. Those fares are much more expensive than saver and value fares.
Amtrak had a record 32.5 million passengers in fiscal year 2019 and reported financial milestones, too. Company leaders say the investments and operational changes they have made are yielding results. Amtrak added nonstop Acela service between the District and New York last fall, freshened up train interiors with new carpet, seat covers and cushions, and upgraded bedding, towels and linens in long-distance accommodations. It has overhauled WiFi systems aboard trains, modernized menus, improved the cleanliness of its bathrooms and added new facilities – including lactation suites – at several major stations.
To attract more travelers, it has beefed up sale promotions, adding more buy-one-get-one ticket sales. The company says it will push even more deeply discounted fare offers with its new fare rules, including for its Acela and long-distance trains.
Amtrak says it has no plans to make additional policy changes to increase its revenue from fees, such as adding baggage restrictions like the airlines. The railroad’s baggage policy is more generous than any airline’s, allowing each passenger two personal items and two carry-ons, plus two checked bags free.
However, Harris said the company may review the policy.
“Frankly, we should review it,” he said. “But I don’t think we’re going to be like an airline that suddenly says give me $30 for your bag. . . . I don’t think that’s the value proposition that we offer.”
Still, Harris said, the railroad is taking some lessons from the airline industry to help run the business more efficiently without reducing the appeal of trains that offer plenty of legroom, flexible seating and no middle seats.
“There are lessons to be learned from the airlines, but I don’t think we should ever be an airline or like an airline,” Harris said. “We’re trying to get people out of cars and out of less-carbon-efficient forms of transportation onto trains. And one of the ways we do that is to make fares more affordable for new segments of the population.”