Get less for more with Basic Economy
Well, we warned you it was coming – now it’s official:
American Airlines yesterday trotted out its new Basic Economy
fares at its hubs, DFW, PHL, MIA and CLT and TPA, MSY, BWI and FLL.
If you’ve flown economy class recently, you know it’s already extremely “basic”. how much more “basic” they can go?
As their press release enthuses, paying more for less is a good thing! It gives consumers “choices” as to which services to pay for.
Except, it’s not giving customers more options when you’re taking away options they had, for the same price. This is a hidden fee. It’s also a blow to consumers in an industry reporting record profits. United Airlines made it clear it expects Economy Basic to collect $1 billion by 2020 – proof it isn’t intended to produce lower fares, it’s designed to restrict the number of the lowest fares being offered and increase auxiliary fees.
However, airline defenders still sell it as a way of keeping fares low. But, in reality, this new low fare was the old, you-get-to-choose-your-seat-and-bring-a-carry-on-too, fare, (and that fare just got raised another $60.)
Today, for example, let’s say FLL- JFK is $200 round trip. With the new Basic Economy ticket, FLL-JFK will remain $200 but the regular economy ticket, what you used to get for $200, will now be $220.
Probably the biggest impact will be restricting interline agreements when rebooking passengers in Basic Economy. That is, in the event of a flight cancellation or severe delay, AA’s interline agreements won’t help you, because AA has stated that Basic Economy passengers are not eligible to be reaccommodated on other airlines.
Needless to say, Basic Economy fares are not welcome news to many business flyers who are required to book the absolute cheapest base fare.
Monkey See Monkey Do – Following the Spirit model?
These legacy airlines say it allows them to compete with low-cost Spirit, Allegiant and Frontier. But that’s not the case since their fares will not be any cheaper. AA’s president said it himself, “its not a new discount, its a new set of features for our lowest fares” – as in, a new set of reductions in features for our lowest fares.
The usual response from airline advocates is ‘nobody is forcing anyone to pay these fares’ – and – ‘air travel is not a constitutional right.’
But air transportation is very much a commodity and an essential service.
Presently, the domestic airline industry is very much an oligopoly. It’s all about reducing competition, squeezing your patrons and diluting the offering. Legacy carriers also dominate gates and slots at key airports and create barriers for new entrants.
Business class passengers may say, “Why should I be concerned? It doesn’t affect me.” But once the airlines begin on this path of diluting product and services, they will eventually work their way to every class of service.
It will be interesting to see just how much more people are willing to put up with before standards bottom out.