Save an average of $67 on airfare with 24-hour cancellation policy - Hopper Research

Save an average of $67 on airfare with 24-hour cancellation policy

By Patrick Surry
Posted Oct 20, 2014


  • The US Department of Transport requires that all domestic and foreign airlines offer a 24-hour free cancellation policy for tickets purchased at least a week in advance of departure
  • Over two out of three ticket prices will drop at some point within 24 hours of the original search or booking with an average saving of 14%
  • About one in six times the airfare will drop by at least 20% during the cancellation window

Booking flights these days is a long and complicated process: in a recent study Hopper found that the average American spends 12 days searching for airfare before booking []. Much of this time is spent comparing prices as consumers search for the best possible price, but during this time prices rise an average of 5%, leading to an average increase of $15 per ticket.

However, there’s a little-known policy that could protect consumers against increasing prices: the 24-hour cancellation policy.  The US Department of Transportation (DoT) consumer rule “Enhancing Airline Passenger Protections” (14 CFR 259.5(b)(4), 76 Fed. Reg. 23110, 23166, Apr. 25, 2011) requires that U.S. and foreign air carriers either hold a reservation at the quoted fare for 24 hours without payment or allow a reservation to be cancelled within 24 hours without penalty, for all reservations made seven days or more prior to the flight’s scheduled departure time [].

Eight of the US’s largest airlines (American, Delta, United, US Airways, JetBlue, Southwest, Spirit, and Frontier) provide a free cancellation within 24 hours of purchase for tickets purchased at least a week in advance of the departure date (Table 1). Five of the airlines (American, Delta, United, Southwest, and Frontier) have no fee even for flights purchased within a week of departure. American has the most consumer-friendly policy, allowing consumers to reserve a price for 24 hours without charging them the fare. Passengers can then cancel the reservation within 24 hours (having never been charged), or choose to book the ticket and pay.

Airline Policy 7-Day Advance Req.
Delta Full refund by midnight of day after purchase for most flights No
United 24-hour free cancellation No
American Keep your reservation 'on hold' for free for 24 hours No
US Airways 24-hour free cancellation Yes
JetBlue 24-hour free cancellation Yes
Southwest No fee for cancellation, receive full credit No
Spirit 24-hour free cancellation Yes
Frontier 24-hour free cancellation No

Table 1: Cancellation Policy by Airline


Hopper analyzed just how useful the cancellation policy is, aiming to ultimately answer the question, ‘How often will I find a cheaper price within the 24 hour cancellation window?’ It turns out it’s quite frequent: 68% of the over 16 million searches we tested dropped in price at some point during the 24 hours following the search (Table 2). 50% of the time, the lowest price seen within 24 hours was at least 5% lower than the original price, and 35% of the time the price was at least 10% lower. Given how much prices fluctuate, a savvy (and speedy) consumer could potentially book, cancel, and rebook repeatedly, using the 24 hour cancellation policy multiple times.

Minimum Savings Frequency
>0% 68%
1% 63%
2% 59%
3% 56%
4% 53%
5% 50%
10% 35%
15% 24%
20% 16%
25% 11%

Table 2: Frequency of Finding a Lower Price by Pct. Savings


Data and Methodology

The data presented in this analysis comes from Hopper’s combined feed of Global Distribution Service (GDS) data sources which includes about 10 million queries and 1 billion trips per day.  The data in this article analyzed over 15,700 flights covering 100 markets over a two month period.