The pandemic has forced airlines to offer more flexible tickets, continually waiving change fees so that customers – facing greater uncertainty than ever – would be willing to buy tickets. Southwest Airlines didn’t have change fees (or baggage fees) to start with. United Airlines declared their domestic tickets would no longer have change fees either except for Basic Economy tickets and flights to and from Guam.
Change fees no longer have the same importance they once did for segmenting business travelers from leisure travelers, leaving aside that right now there are almost no business travelers. Segmentation has fallen to Basic Economy fares, and this change at United made the gulf between Basic and Standard economy even wider.
United’s move clearly puts pressure on other airlines to match, and in a little less than 24 hours American Airlines has done so and indeed gone a little bit further.
3 Changes That Go Farther Than What United Announced Yesterday
United’s move to end change fees on most domestic tickets rocked the travel world when it was announced. It led to tremendous speculation about who would follow. American didn’t just follow, they exceeded with an even more generous policy.
- Waiving change fees immediately (excluding Basic Economy fares), like United, but extending the policy to include Canada, Mexico, and the Caribbean as well.
- American will give a travel voucher to customers who apply their old ticket to buy one that’s less expensive. United will not.
- Eliminating fees for standby travel, like United, but doing it starting October 1 – instead of waiting until January 1.
Furthermore American is extending its change fee waiver on all new tickets (including international and basic economy) through purchases made by the end of the year. This includes AAdvantage award tickets.
Restoring Benefits To Basic Economy, But No Longer Offer Elite Credit To These Fares
American is also making Basic Economy more flexible. The change fee waiver won’t apply, but while United – which has the most draconian Basic Economy, banning full-sized carry on bags – is widening the difference between basic and regular economy, American is willing to let customers spend more money for just about anything when flying on a basic economy ticket.
Starting October 1 American will permit Basic Economy customers to buy upgrades, priority boarding, Main Cabin Extra seats, and same day confirmed changes.
Furthermore, “later this fall” elite benefits will be restored to Basic Economy fares:
- They will become upgrade-eligible
- Able to access elite seating
- Eligible for same day confirmed change benefits
Starting next year though Basic Economy won’t count towards earning elite status. This makes sense – decide what you want to count as a good customer (not those buying basic economy regularly) but treat that customers well every time they fly.
American’s Senior Vice President Vasu Raja says they need to offer the product the customers they have today want to buy rather than waiting for the old days to return. Being willing to sell anything a customer wants to buy makes sense.
And treating a loyal customer well each and every time makes sense too – when they buy that expensive ticket for work, or the cheap one on the weekend with their family – at a time when winning each and every customer really matters. It didn’t matter as much when customers were largely replaceable, but there are no longer enough passengers to go around.