American Airlines Reduces the Value of its ‘Choice’ Fare Bundles With New Variable Pricing and Benefit Changes

Pizza in Motion breaks the news on changes to American Airlines airfare benefits.

American Airlines introduced a set of fare options in December 2012, a modestly higher fixed fare price for a set of value-added benefits, that you could purchase at time of ticketing — through American’s own channels, and also they hoped through third parties as well.

However the details of American’s fare bundles were updated on February 25.

What the lower tier bundle offers has been cut back, and pricing has changed. These options no longer represent the value they once did.

Choice Essential fares used to include at a fixed $68 price point:

  • No change fees (avoid the $200 charge when making a ticket change)
  • Free checked bag
  • Priority boarding (“Group 1”)

Choice essential prices have changed and no longer waives change fees.

It’s no longer a good value overall. It’s hard to imagine this being a good deal for anyone, better to buy the free checked bag separately if you’re going to be charged for that, Group 1 boarding doesn’t matter — you don’t need to board first, you just need to make sure you do not board close to last in order to not be shut out of overhead space.

And certainly no elite frequent flyer should ever buy a ‘Choice Essential’ fare under these terms.

Choice Plus fares were rolled out with the following benefits at a fixed $88 price point:

  • No change fees (avoid the $200 charge when making a ticket change)
  • Free checked bag
  • Priority boarding (“Group 1”)
  • 50% bonus miles
  • No fee same-day changes and no fee same-day standby
  • Premium beverage onboard

All of the benefits of ‘Choice Plus’ fares appear to remain intact, however pricing is now higher.

The waived change fees as part of the fare was the biggest benefit. Even as an elite frequent flyer with American who already got free checked bags and priority boarding, I thought it was a more than reasonable hedge against changes when plans had the potential to get mucked up. (Which happens to me more than I’d like to admit.) And once it made sense to pay for waived change fees, the modest increment to earn 50% bonus miles and other benefits could have made sense at all.

The higher price points we’re now seeing are much harder to justify.

I never entirely understood the argument for offering these things are part of the airfare, rather than ancillary offerings for an extra charge, since domestic airfares are subject to a 7.5% excise tax while fees are not. American said they wanted to change the way airfares are sold. I’ve been skeptical of that approach.

Regardless of whether that happens, and I’d guess it’s less likely at a higher price point, I don’t see the fare options offering nearly the value they did when first rolled out a little over a year ago.

What sorts of prices are you being offered to ‘buy up’ to these fare bundles?


About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Would love to see Congree bring Parker in on charges of lying to Congress about this merger ultimately being good for the consumer.

  2. There’s a really good article in the NYT on how the government’s refusal to let AT&T buy T Mobile has caused a revolution in the cellphone business. T Mo has cut prices drastically and gotten incredibly consumer-friendly, forcing other cell carriers, especially AT&T, to follow.

    Flip to US and Parker buying AA. Reverse situation where with no important competition the airlines’ service is going down and prices going up. Parker only knows how to run an America West-style airline and has no reason to try anything better now.

  3. Was really hoping for UA to copy and start bundling no change fees and I agree with Gary’s take on how it was a reasonable hedge. The new maths are a farce though and I don’t see UA copying at this point or it being worth while.

  4. Yep, just bought a RT SFO-SAT yesterday and Choice Plus was about $150 more. Really steep. And Choice Essential is just a complete ripoff now. $60 to check a bag?

  5. Gary, AA isn’t worry about people that read your blog, they only care about those who fly infrequent and they are the ones who do not check bag but do over stuff their carry on’s so they do NOT check a bag. So to them if they can get Group 1 boarding, they are happy…. Very smart on AA side…

  6. As a sales guy that travels sometimes with large sample duffle bags, the Choice fare options always made a lot of sense. As an elite, I get 2free checked bags, the Choice fare bundling scheme allowed me to check a third bag for $68-$88 each way instead of the $150 it would cost me otherwise. Add the flexibility of the ticket change, and this was a no brainer.

    If the Choice essential price goes down and I can still check the 3rd bag for $58, that’s ok by me, but the value was the waived changed fee. I realize I’m probably not the intended target for this fare, but it works with that 3rd checked bag.

  7. “Would love to see Congree bring Parker in on charges of lying to Congress about this merger ultimately being good for the consumer.”

    oh Congress is not an elite member of the Lying Party?

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