Basic Economy fares take the lowest fare being offered by an airline, and work to give customers less. Delta started by restricting changes and seat assignments. United and American doubled down by saying that whereas you can even pay for a carry on bag flying Spirit Airlines, they won’t let you bring one on at all.
On the same day that American Airlines went live selling Basic Economy fares on ten routes, United has also announced the sale of Basic Economy between Minneapolis St. Paul and United hubs.
- Chicago O’Hare
- Denver
- Houston Bush International
- Los Angeles
- Newark
- San Francisco
- Washington Dulles
This is an interesting move because Delta has a hub in Minneapolis, so they’re competing directly against a full service legacy airline which still allows you to bring a standard carry on bag onboard even when buying a basic economy fare. United has chosen to make themselves instantly uncompetitive head-to-head against a major rival.
They’re trying to spin this thing, though. Whereas American Airlines has been honest that the introduction of Basic Economy isn’t giving customers more or giving them lower prices, here’s what former American Airlines President and current United President Scott Kirby says about them,
“The launch of our Basic Economy product is transformational – offering customers seeking the most budget-conscious fares United’s comfortable and reliable travel experience across our unmatched network of destinations,” said Scott Kirby, president of United Airlines. “Basic Economy lets you go where you want to go at our lowest available fare while enjoying United’s Economy cabin and the exceptional inflight service that comes with it.”
The quote makes it sound like it’s transformational for customers and in a good way.
- It is transformational, for United’s revenue management (attempt to derive more revenue from the same seats on the plane)
- It does offer United travel (I’m not sure the middle seat in the back by the lav is comfortable, but to each their own).
- To the extent it’s transformational for customers, it’s only so in terms of giving them less for the same money they spent before.
When booking at United.com the Basic Economy fare is obvious, for Minneapolis – Washington Dulles avoiding it costs $20 one-way (and it’s not available on connecting itineraries).
Notably on this same day you’ll see that United is not cheaper than Delta for the same non-stops (and similarly-timed midday departure is even cheaper on Delta, plus you bring a carry on onboard).
Just like with American, United’s website shows a warning page that tries to upsell you from the Basic Economy fare, laying out all of what you don’t get.
However also like with American when searching for United’s tickets at Expedia it’s flagged during the purchase process that you’re buying Basic Economy but not nearly as clearly as at United.com about what that means. I anticipate there will be some customers who didn’t understand what they were buying through online travel sites.
Yes, everything the airlines do is supposedly in the best interest of its customers….Not really. It is all about the bottom line. Fuel prices have dropped but the price of tickets have not. Airlines started charging for bags and said that the cost of bags was “hidden” in the ticket prices, really? Ticket prices didn’t drop. They cram more seats on an aircraft lessening leg room and forcing taller customer to pay more if they want the same leg room they used to get.
I just did a dummy booking for ORD-MSP and a popup appears that shows what you do not get in basic economy. It specifically mentions sitting with your family, carryon bag etc. You actually have to then check a box that says ” Basic Economy works for me” before you are allowed to proceed. I think they actually do a decent job of spelling out the details. I think the issue is a lot of consumers are going to blow through that and be angry later. I’m not sure how the fares will be displayed on sites like Expedia…which could also lead to some unaware consumers.
I agree that their press release is pushing the limit between marketing spiel and flat out bull$hit, but they are airline execs so not too surprising.
@shaun – where did you see that *on expedia*? didn’t come up for me on msp-iad
A truly revolutionary “enhancement” from United. You pay the same amount of money and they give you less than before.
“@shaun – where did you see that *on expedia*? didn’t come up for me on msp-iad”
The popup that came up that clearly spelled out the limitations of Basic Econ was on United.com. My comment on Expedia was that I wasn’t sure how the OTA’s like Expedia would show that same info….sorry if i was confusing. Either way, I agree that UA trying to spin this in a positive context is extremely shady.
I am so glad I just got the Southwest companion pass again so I won’t have to deal with these jokers at United and American most of the time. I can’t believe they somehow changed me from hating Delta to cheering for Delta to embarrass them in 3 years.
@gary – based on your comments it would seem that pricing algorithms also include competitive comparisons. If they’re doing that then their IT has gotten incredibly smarter recently, but I think that there can’t be much of that going on.
“I agree that UA trying to spin this in a positive context is extremely shady.”
What exactly did you expect ? An honest description from UA marketing and PR that this is all a money-grabbing scheme for the unsuspecting ?
Or flip it the other way – if YOU were tasked with writing the spin message, how would you have done it differently ?
how do elite benefits (gold status for example) apply to these fares?
I’m so glad I’m retired and don’t have to travel for business anymore. (I was 1K for more than a decade, nearly all on domestic flights.) At the time my employer required us to take the lowest fare. If that’s still the case, my former colleagues are going to spend a lot of time in 31B.
IAHTRVLR:
“If you’re a MileagePlus member, you will still earn award miles based on the fare and your MileagePlus status.
However, MileagePlus members, including Premier members, will not earn:
Premier qualifying dollars (PQD)
Premier qualifying miles (PQM)
Premier qualifying segments (PQS)
Lifetime miles
Toward the four-segment minimum
MileagePlus members, including Premier members, will not receive:
Complimentary Economy Plus seating
Paid upgrades
Mileage upgrades
Complimentary Premier Upgrades
Regional Premier Upgrades
Global Premier Upgrades”
The sad truth is most Americans make decisions on price alone. Study after study shows price is the number one reason people purchase a ticket with comfort falling way behind. Heck I bet with you surveyed safety vs price – price would win.
Apparently the legacy airlines have discovered that their approval level was slightly ahead of the MSM, and wanted to be “number one”, but in the reverse way. 😉
So this is their way of getting to the absolute bottom. When their customers choose to save $10 by flying Spirit and Frontier, they are going to be as shocked as Hillary was late on Nov 8th. Welcome to reality…
It’s been proven that lying has no consequences, the truth is now irrelevant.
UA was not competitive into MSP before these fares. This fare increase (because that’s what it is) is just more hub captive gouging.
How could anybody call this “transformational” with a straight face?
Is there no rule of PR equivalent to, don’t piss on me and tell me it’s raining?
Marketing Basic Eco as “transformational” is unethical. But as long as people are buying the cheapest seat no matter what, UA has no reason to stop.
Expedia is showing a “Basic Economy” note in the fare comparison with some of the restrictions, but not all. Kayak doesn’t say anything, so you’ll not know until you are on united.com to book…
There is an app out already that lets you filter out the basic economy fares – it’s just a matter of time till people figure it out. Until then, I’d expect a few angry people at the airport and during boarding…
How would the new rule get enforced? Is the boarding pass flagged and Joe Doe gets stopped because he has a carry on and a 5 minute discussion ensues?
The fact that it makes your blood boil probably means UA is doing something right here. You want everything for nothing and coach your flock to do the same (while getting hits and hoping they use your affiliate marketing links/don’t reset their cache and clear cookies before applying for one of the CCs you feature).
This is a business not a charity, take your head out of the sand Gary it’s not 2008 anymore when you’d get a $200 eCert for a defective reading light on a $100 fare and a skykit when you didn’t get your meal choice in (upgraded) first class. UA is right to have tighter MM requirements you hardly flew AA yet bragged years ago you had 2 MM status.
@Josh G – Once again you didn’t read the post. I have no problem offering basic economy for sale. American has been honest about it, doesn’t claim it reduces fares. What made my blood boil is “how they’re describing it” as being transformational for customers (in a good way). That’s a lie.
Nothing wrong with an airline offering whatever product it wishes, I’ve been a huge proponent of Spirit’s business model for instance, arguing vociferously against proposed legislation from Chuck Schumer and others that would set minimum standards for seat pitch and require allowing free checked bags, etc.
There *is* something wrong with lying to your customers. That does make me angry, and I want to point that out.
Perhaps you don’t understand the difference between being permitted to offer a product, and telling the truth about your product.
@Anne – Basic Economy gets the last boarding group (unless you are an elite or co-brand credit card holder) and customers in the last boarding group aren’t permitted full-sized carry ons.
I’m having a hard time deciding whether Josh G is a troll or a moron. He always offers insults rather than actual arguments, so I think he’s a troll. I’m not sure though.
What is the fare class for BE on United?
Hi Gary,
I guess my question is, how do you know it won’t reduce fares in some markets? Legacies are not matching prices dollar for dollar against ULCCs all the time because of additional benefits one would receive on legacy carrier. But now those benefits have been removed, wouldn’t you anticipate they would be more likely to match the ULCC fares more often?
Every airline executive should have to fly basic economy, for a percentage of flights equal to the percentage of economy vs business and first class on their planes.
@Cdog –
I have posted examples of where Delta introduced basic economy into a market, and the fare did not go down.
The fares did not go down in markets where United and American introduced Basic Economy yesterday.
American has said fares won’t go down.
Delta has long been a punching bag for domestic air consumers because of its deplorable SkyPesos program. Now that United and American are as bad as Delta, and in some instances worse than Delta, not only does it makes Delta look good, but also it makes cash-back and pure points credit cards look even better.