We reported last night on rumored details about American Airlines’ Basic Economy fares, and it looks like American has made it official this morning. The fares will be available in 10 markets to start, with tickets available starting February 10, 2017.
American Airlines’ New Basic Economy Fares
Most of the important details are as expected, including the limit on carry-on luggage (“personal item only”) and last-group boarding. There will also be no changes and refunds permitted, and no upgrades or advanced seat assignments will be offered, regardless of status level of the passenger.
Passengers on these “no-frills” tickets will still earn elite-qualifying credits, including full elite-qualifying dollars (EQDs). However, elite-qualifying miles and segments (EQMs/EQSs) will be halved.
Comparing Basic Economy Fares Between American, Delta, and United
|American Airlines||Delta Air Lines||United Airlines|
|Boarding||Last Group||Last Group||Last Group|
|Carry-On||Personal Item Only*||Regular Rules Apply||Personal Item Only*|
|Elite-Qualifying Credits||Reduced (Half EQM/EQS)||Regular Rates||None|
|Changes/Refunds||None Permitted||None Permitted||None Permitted|
|Seat Assignment||Extra Fee, or at check-in||At Check-in||At Check-in|
|Elite Upgrades||None Offered||None Offered||None Offered|
*Passengers with elite statuses and co-branded credit cards will still be able to bring a full-size carry-on onboard with both American and United.
All in all, American’s offering falls somewhere between Delta’s and United’s in terms of restrictions. Like United, passengers on AA’s Basic Economy won’t be able to bring a full-size carry-on onboard, so only a personal item like a laptop bag will be permitted. However, American will still allow flyers on a Basic Economy ticket to earn elite-qualifying credits, like Delta does, though at a reduced rate.
Delta was the first of the major US carriers to announce Basic Economy, and interestingly, the announcements from American and United allowed Delta to be ahead of the competition here. I have flown on Basic Economy fares with Delta, and other than boarding last and not having a seat assignment until check-in (read: middle seat), it really wasn’t a different experience, and I saved about $30 on one flight compared to regular Economy. Of course, Delta could alway make changes to their rules, and that’s really not unlikely in light of American and United’s more restrictive rules.
What I think legacy carriers have to be careful about, however, is making these restrictions very clear to customers. For the most part, people buying tickets from the big three airlines will still expect a non-LCC experience; being forced to check a full-size carry-on at the gate for $25 will not be good PR for these airlines. A number of customers also buy their tickets from travel agents, and if they end up with a Basic Economy ticket there, they could very well be in for a not-so-pleasant surprise (though the new DOT protections may help prevent that from happening).
How Does Legacy Carriers’ Basic Economy Stack Up with Low Cost Carriers?
The introduction of these no-frills fares are partially aimed at competing with low-cost carriers, which offer lower fares with tons of restrictions. For example, Frontier and Spirit Airlines both charge for advance seat assignments, as well as full-size carry-ons (up to $35 if selected at booking). Both American and United are replicating these restrictions, and prohibiting refunds and changes altogether on top of them.
Since legacy carriers offer somewhat more lucrative frequent flyer programs, and still offer beverage services and snacks, some people might prefer them over full-blown low cost carriers like Frontier and Spirit. If you have co-branded credit card or elite statuses, you might even et to bypass some of the restrictions.
However, for the ultra price-sensitive consumers, In fact, I’d venture to say that if you don’t care about frequent flyer programs and travel with just a backpack, you might have better luck not getting a middle seat on a LCC, assuming that most people will still be buying “non-basic” fares with legacy carriers.
The introduction of Basic Economy will bring the flying experience between legacy and low-cost carriers much closer. Not to say that’s a good thing, or even a pleasant thing for flyers, but I can see how this will help legacy carriers compete on price. Where I am not convinced, however, is that fares will go down on legacy carriers because of Basic Economy—the fares for non-basic Economy will mostly likely simply go up.