Are airlines making money off ticket-name problems?

Many times customers will book their reservation on a name they go by. For example Nicholas will say “ please hold this under Nick “ , later he will call and make a payment without correcting that he is actually Nicholas. In the past this wasn’t a problem for the airlines but since Nov 1 st 2010 you can ‘t get on the plane with discrepancy in your name per passport and your ticket. Under the Transportation Security Administration’s Secure Flight program, the name on a ticket and on an ID must match exactly. If they don’t, you could be delayed or prevented from flying.

Airlines sometimes offer to make an electronic notation on an airline reservation that contains a minor error, but they can’t guarantee that it will work. The only way to be 100 percent sure, they’ll frequently say, is to buy a new ticket with the correct name. In some cases, they’ll offer to change the name for a fee anywhere from 50 to 300. No question, Secure Flight is an opportunity for airlines to make even more money. The airline industry just wrapped up its most profitable year in a decade, in large part by charging so-called “ancillary” fees, such as change fees. United Airlines collected $243 million in cancellation and change fees during the first three quarters of 2010, and domestic airlines as a whole collected $1.7 billion, already surpassing the figure for all of 2009.
Are airlines exploiting the TSA’s stricter name-matching requirements to squeeze even more money out of passengers? No, says Delta Air Lines, which collected the most cancellation and change fees ($533 million in the first nine months of 2010). Delta is promising to work with customers to fix name errors instead of sticking them with a change fee or telling them to buy a new ticket. “It’s handled on a case-by-case basis,” says airline spokeswoman Susan Elliott. “It depends on how significant the change is that they’re requesting.”
Typically, airlines will correct small errors, such as changing a letter or two, without any questions or surcharges. Beyond that, it’s often up to the airline to decide how to solve the problem. And that’s where things get a little murky.
If you catch a mistake on PaylessFlights.com within 24hours of booking we can cancel/void the ticket and reissue. Unfortunately beyond that 24hour window it really comes to the airline flexibility on case by case status.

After the one-day window closes, the next best option is a notation in your reservation, which is no assurance that you’ll be able to board. Passengers who want a sure thing often find themselves thinking that they have only one choice: to buy a new ticket.
On Sabre, reservations systems that we use for bookings over the phone, the Secure Flight passenger data field is separate from the passenger name field, and the TSA doesn’t require the two to match. For example we put First and Last name on the ticket, and to TSA we enter first, middle and last name.
The information in the passenger data field “can be modified at any time,” says Sabre spokeswoman Heidi Castle. “When this field is updated, the content is transmitted to the airline, which in turn passes this information on to the TSA for boarding pass approval.”
In other words, passengers wouldn’t need to worry about changing the names on their tickets; they would only need to ensure that the field with the Secure Flight passenger data had been changed. That seems like a reasonable compromise, allowing the TSA to pre-screen the passenger and giving air travelers the peace of mind that they’ll be allowed to board.
Why don’t airlines just let travelers know that the name on their ticket doesn’t need to match exactly the name on their ID, only the name on the field that’s transmitted to TSA? Clarifying the policy would come as a relief to many passengers and no doubt will save money to consumers. Will airlines do it?