Basic economy fares are a tool to raise prices, while not losing business from the most price-sensitive customers. They take the lowest fares and impose new restrictions that will be unpleasant enough for about half of passengers that they’ll spend more to avoid them.
Although sometimes the pricing winds up weird and even those of us who might ‘buy up’ are faced with such a price difference that basic economy still makes sense.
The risk is that instead of booking a more expensive ticket, the customer flies a different airline.
However carriers are betting that all the major players will follow in lock step so consumers won’t have better options. Sometimes airlines get the pricing so far apart that Basic Economy can
Domestically we’ve seen Delta, United and American roll out basic economy. The biggest exception is the largest carrier of domestic passengers, Southwest.
Now we’re seeing Basic Economy spread to flights between the U.S. and Europe.
American Airlines and its transatlantic joint venture partners British Airways, Iberia, and Finnair are rolling out restrictive basic economy fares for travel across the Pond. This launches in April.
- No refunds or same day flight changes or standby (same day flight changes apply only to certain Heathrow flights today). In American’s version at least these tickets will be changeable for a fee.
- No free advance seat assignments
- No free checked bags
- No upgrades (so American’s eVIP upgrades given to Executive Platinums, ConciergeKey members, and million milers will have minimum fare class restrictions for international travel for the first time)
- Board last (British Airways and American only, on American this will mean Group 8, and this doesn’t apply to Finnair or Iberia)
- Only 50% of elite qualifying miles and segments when crediting to AAdvantage (no change for other programs)
Unlike domestic US basic economy fares, these basic economy fares will not include a carry on baggage restriction. And passengers flying on a domestic basic economy fare and connecting to an international basic economy fare will get the international allowance (so they can bring a full-sized carry on onto the domestic flight segment).
Young children traveling in the same reservation will be seated with their adult traveler, however families won’t otherwise be kept together unless they pay to assign seats in advance.
American Airlines and oneworld elites will still be able to retain premium check-in, security, and boarding and select seats for free and retain their existing checked baggage allowance on these fares.
British Airways already denies free checked bags to elites on their ‘hand baggage only’ fares and that does not change. Finnair will only extend free checked backs to top tier elites of partners. Lounge access benefits based on elite status or paid membership will continue to apply as well.
BA produced a chart that appears to suggest benefits like checked baggage is dependent upon the program you hold status in rather than the airline flown but that appears incorrect to me.
- Update: American called and confirmed my assumption that the chart above is inaccurate. They’ll be updating with corrected information shortly on how elite status works on these fares across carriers.
Here’s American’s info sheet comparing domestic and transatlantic basic economy:
Delta and its transatlantic joint venture partners introduced basic economy together in December. Those do not permit free first checked bags, but are otherwise less restrictive for most customers.
At the time I wrote it wouldn’t be long until American and United followed suit. We can expect to see something similar from United and their joint venture partners I think, presumably once they get the IT down.
File this under completely expected, but another degradation in the travel experience that offers less value to customers at the same price.
(HT: Traveling for Miles for the detail on British Airways, Ibera, and Finnair)
I can only hope that the legacy majors colluding in this manner marks the invitation fir governmental breaking of the Oneworld, Skyteam and Star Alliance Transatlantic joint ventures and that the likes of Norwegian and Wow Air eat the legacy majors business for breakfast, lunch and dinner as they all become increasingly alike in being consumer-unfriendly.
Iberia does not give seat assignments to OW Emeralds now (on AA codeshares)….
I’m roflmao at “same great Main Cabin seat, food, and inflight service.” I suppose the marketing department nixed, “same tight seat with crappy ‘food.'”
Meh. The bloggers hate basic economy. There’s no evidence that the market/consumers share that opinion.
As someone who travels these fares are irrelevant. They are too restricted even for our lowest Y policy. I won’t buy them.
I get why, but it’s stupid that you have four airlines that are supposed to be partners that each do it four different ways. Heck, you need a spreadsheet just to look at everything. For JV’s, it should be one set of rules across the board.
Hey Gary, could you explain why one-way TATL flights are so ridiculously expensive, even much more expensive than roundtrips? Even if they are targeting business travelers, the corporate travel departments must know that one-way is more $ than roundtrip. And they are basically losing all those one-way leisure travelers to LCCs.
I’m tired of this race to the bottom. Can they please just fast forward to the finish line?
I feel like in the first couple eras of airline travel, airlines actually believed they had a differentiated product and not a commodity product. The believed branding, and hard and soft product, were key differentiatiors for market share and revenue growth.
Overtime, I think you’re just getting more pragmatic management, albeit in some cases overly so. You’re getting management that is realizing, wait, we actually are a commodity product aren’t we? Damn it. Well, let’s act in accordance.
I think it’s confusing to the customer because we actually believed they were differentiated product, and because airlines actually practice price discrimination, it had a blinding effect.
Now we have comparison sites, UCCs, a non-competitive landscape… and way way more transparency than we’ve had in the past. In some ways, airlines came to term with the reality that commodity products really can only compete on lowest prices (except when supply is tight), and consumers are just the last to start figuring it out. It doesn’t help that loyalty programs are part of that blinding effect that guides somewhat irrational behavior for many.
Like you said, not unexpected. The true test to me would be what the airlines look like in the next down cycle. That could be tomorrow or years off but that will test whether the customer unfriendliness and hard switch to accepting commoditization is actually a boon or a short sighted long term failure.
my favorite line on the AA one is “same great main cabin seat, food and inflight service”
At least the basic economy people are getting what they paid for
So even if booking directly with BA or Iberia this is the case right?
So much for caring about Iberia returning to SFO this year…
Every day, another downgrade from AA. I am happy that my EXP expired in February and I no longer have an incentive to fly them. So far in 2018, I have flown 20K on other airlines, and 0 on AA.
If at all possible soon I will use up my near 200,000 British Airways miles and fly business class on Norwegian.
I will switch to Chase Sapphire Reserve also. British Airways, I can only take so many punches until I leave this abusive relationship.
Will AA credit card holders still get free checked bag on the transatlantic flights operated by AA? How does this work for flights operated by partners, especially if the first leg of the flight is on AA?
@Andy 11235
Can you believe AA has the cojones to put that in writing?
The only thing “great” about the inflight experience is when you land at your destination and get exit the torture tube.
The worst part of domestic Basic Economy – the inability to reserve seats in advance – is not carrying over. Looks like Basic Economy will do what most European carriers already do on most coach fares – if you want to select a seat before check-in, you have to pay – but free for elites.
I would never buy a fare that could result in my sitting in a middle seat for 13 hours.
AA has degraded badly, further hindered globally by the tie-up with the abomination called BA. Where OW used to be a shining star of AA-BA-CX-JL it is now a tattered, sad-sack affair from a customer experience point of view. This is principally due to poor management at AA-BA. Yes, the stock price is elevated and shareholders are happy. But meanwhile, I capitulate. No more AA. So far in 2018 I have moved a considerable amount of my ExPlat spend elsewhere.
You omit that BA already charges a fee for advance seat unless you are an elite (this is particularly offensive to business class travelers paying $$$$) as does AA if you want one of the more desirable aisle seats. So if you are a non-elite with an AA credit card, might as well just buy BE.
The 50% EQM essentially converts the upcharge from BE into an elite tax – pay more or you lose EQM.
How very sad. A once-great airline has been destroyed in the name of increased profits for the CEO and executive boardroom. If there were any justice in this world, these pirates would be forced to travel around the world in the cheap seats they created.
Ridiculous that they would allow the cabin to overflow with carry-on bags.
Should have banned it on those fares and returned to fast boarding and deplaning.
AA/BA truly don’t get it.
Say adios to those $400~500 fares to Europe, now they will be coded as BE, earning 50% EQMs and no upgrades will possible with SWU (on AA flights).
I’m not seeing what the difference is for BA…these restrictions/conditions are already in place for their cheapest fares (either directly or through consolidators searched on Momondo, for instance. I was searchingly recently and the BA options were priced competitively with Norwegian (not Wow) and in O booking code same fee for seats, reduced accrual, etc.
To those other ExPlats (and a life Plat) who are directing their spend elsewhere, count me in. Hitting 34K miles short of 4 million. 120K in the seat last year but didn’t make the spend. I run a SMALL business. AA must think we all have large corp travel accounts. They’re fooling themselves. 34 years as a loyal AA traveler. NO MORE. My spent is back on the open market.
Error in my last post. (and a life Plat) should follow loyal AA traveler and My spent….should read My spend.
Correction: This isn’t the “first time ever” that SWUs were fare-restricted. Back when they were called VIPs, they couldn’t be used on Q (and maybe not O), nor I fares. Back then, AA international business seats were recliners with leg rests (kind of like International Premium Economy today), and my company let me buy I fares, and it was so frustrating that I couldn’t upgrade to F with my VIPs.
@Justinb, some airlines are able to establish a differentiator for their brand. Domestically, Delta has a reputation for excellent operations and for treating people well and having good food, although far more true in premium cabins. Internationally, many Asian and Middle East airlines have stellar reputations and people want to fly them.
So what is the final word on baggage allowances?
I am a AA Platinum / OneWorld Sapphire.
What baggage allowance (if any) do I get on a BA TATL flight?
Does it change if it’s an AA codeshare (AA 6xxx)?