Changes Coming to United Basic Economy Like Paid Seat Assignments and Buy Ups

The point of ‘Basic Economy’ fares — which don’t let you assign seats in advance, upgrade, or make changes for a fee, and at United and American don’t allow you to bring a full-sized carry on onto the plane — is to make the travel experience so unpleasant you don’t want the fare, and will spend more to avoid the restrictions.

The risk is that customers don’t spend more with the airline offering the inferior Basic Economy product, but instead book a different airline instead (or even just decide not to travel). That’s what happened when United launched their basic economy product. They lost business. And they lost about a hundred million dollars.

Their belief was that they were just too early, American Airlines hadn’t fully rolled out their restrictions yet. So they figured once American followed them down the rabbit hole customers would have no choice (notwithstanding that Southwest Airlines carries the most domestic passengers, and that neither jetBlue nor Alaska have these restrictions).

United had perhaps the most draconion basic economy efforts. They won’t even let basic economy customers who aren’t checking a bag check in online. And they began their efforts intentionally offering basic economy to every customer every time. A full fare customer would get offered an $800 basic economy fare, asking them to spend an extra $20 for a seat.

During United’s investor event this afternoon United laid out that they’re now offering ‘basic economy’ fares on Denver – Hawaii, and they’re planning to go farther into their international network as well. That’s really following where the industry is headed.

And they’ve made changes to how they manage basic economy. They’ve learned the lesson not to impose these restrictions on customers giving them $700 for a one way trip. Now they only offer basic economy fares on their lower fare buckets.

United is going to start selling advance seat assignments to basic economy passengers. That undermines the belief in basic economy, but underscores the belief in a la carte pricing. They did not make clear what the dynamic buy ups for basic economy customers will entail, it will be fascinating to see if they offer sale of first class to these customers.

Meanwhile having just announced that they are following American and Delta in offering international premium economy in the future (“Premium Plus”) they laid out that it will take three years to reconfigure planes. On the one hand that’s generally slower than American’s roll out, on the other hand it’s much faster than they’ve bothered putting new Polaris seats into planes.

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. Anyone with a lick of common sense would predict that mandating BE in the high fare buckets would be alienating and cause book-away…yet United went ahead and did it. Amazing.

  2. I flew United “Basic Economy” once. Now I go out of my way to fly other airlines. in my efforts to
    PUNISH United for their GREED. They did their best to make flying miserable.

  3. I just wish Jetblue would grow faster.

    I always avoid United.

    But I also want to avoid AA.

    But Jetblue doesn’t fly everywhere

  4. Very curious to see whether they get back any customers now that American has shitty economy too. At what point would they realize it’s costing them? Or do they just ride it out as long as possible and hope WN raises their prices?

  5. United has continued in its despicable tradition of corporate greed and contempt for the passengers. Instead of selling us or even letting us select a seat we can actually survive in and do something like check a bag, they insult us into what they hope is an “upsell” and thus defeating the whole idea that we’ll actually save money with a basic economy seat. I’ve drained my ironically named “MileagePlus” program down to zero and I avoid United like the plague. Let’s hope the same multi-million dollar losses occur at their kissing cousins, Delta and American. I’m glad the public is continuing to vote with its pocketbook.

  6. United Airlines is the worst even without the Basic Economy class. What it does is just tell people to avoid this airline. Not sure what’s the rationale behind BE.

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