basic economy

Tag Archives for basic economy.

American Airlines Tests Effectively Killing Basic Economy

by Gary Leff on November 21, 2019

Nov 21 2019

American is testing what happens when they eliminate the biggest remaining restriction on Basic Economy fares, the inability to select seats at time of booking.

If American does this they’ll pick up more seat selection revenue, fewer customers will be chased away, but much of the encouragement to buy a more expensive coach fare will be lost. Presumably this test allows American to see which factors are greatest – to see whether Basic Economy is really costing them money as currently conceived.

4 Things I Learned From a Presentation to Investors By 2 United Airlines Executive Vice Presidents

by Gary Leff on September 5, 2019

Sep 05 2019

Executive Vice President and Chief Financial Officer Gerry Laderman and Executive Vice President and Chief Commercial Officer Andrew Nocella answered questions from Helane Becker at the Cowen and Company 12th Annual Global Transportation Conference.

During the discussion there were four things that stood out to me as being interesting, even if some were relatively tangential for analysts covering the stock.

American Makes Basic Economy Seat Assignments Easier to Get in Advance

by Gary Leff on July 12, 2019

Jul 12 2019

American already eliminated their rule that basic economy passengers couldn’t bring on a full sized carry on bag. Now they’re making it easier for passengers on basic economy fares to get advance seat assignments – allowing paid seats 7 days prior to travel. And with bigger overhead bins, boarding last isn’t even a big deal anymore either.

American Admits Basic Economy ‘Underperforms’: Making Your Product Worse Doesn’t Make More Money

by Gary Leff on October 3, 2018

Oct 03 2018

American Airlines used to believe that ‘basic economy’ would be worth a billion dollars to the airline.

We keep hearing that basic economy is a success. American now concedes that despite those proclamations that it has ‘underperformed’.

Basic Economy: 73.6% of Statistics are Made Up

by Gary Leff on September 29, 2018

Sep 29 2018

Everyone believes basic economy works because airline executives keep repeating that it’s true. It was supposed to be a billion dollar idea and yet once implemented the revenue benefits don’t clearly materialize in the financials.

We keep hearing things like 50% of customers buy up to a higher fare, which strikes me as like “73.6% of all statistics are made up.”

Basic Economy is the New “Saturday Night Stay” – a Tool to Stick it to Business Travelers

by Gary Leff on September 13, 2018

Sep 13 2018

Airlines have taken that knowledge, that business travel booking engines will filter out basic economy options, and used it as ‘the new Saturday night stay’ — the means to differentiate pricing for leisure travelers and business travelers.

United Starts Selling WiFi Subscriptions — and Seats to Basic Economy Customers

by Gary Leff on February 1, 2018

Feb 01 2018

During United’s earnings call last month they explained they would be tweaking Basic Economy fares.

The idea of Basic Economy is to offer such a bad experience that you’ll spend more money to avoid it. However when United first rolled out the fares they lost about $100 million — because customers were avoiding United.

I Flew American Airlines Basic Economy for the First Time — and Liked It

by Gary Leff on January 28, 2018

Jan 28 2018

Basic economy isn’t supposed to be a new cheaper fare. It’s supposed to be new restrictions on what used to be the cheapest fare. That way people who don’t like the restrictions are supposed to spend more money to avoid the inferior experience.

But American offered me such a spread between Basic Economy and regular coach fares that I couldn’t justify spending more money, and I wound up flying Basic for the first time.