It’s been years since flying was an enjoyable experience for most travelers, who by and large have now come to expect long lines at security, extra charges for checked bags, the disappearance of free snacks or priority family boarding, and generally being nickel-and-dimed by the airlines.
Now, the carriers are introducing new types of tickets aimed at squeezing even more revenue out of each traveler. Rather than having a single economy class ticket, airlines are offering various levels of basic fares. A few years ago, several international carriers began introducing “premium economy” tickets that offer perks such as additional legroom and enhanced meal service. The tickets might cost double what you’d pay for a regular economy seat, but would be significantly less than the price of a business or first-class fare.
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“They’re trying to reach the people who can spend more than the cost of a coach ticket but who won’t pay for business class,” says Gary Leff, owner of BookYourAward.com. “They’re hoping to get someone who would have traded down. They’re looking to get more money for the same real estate.”
At the other end of the spectrum, Delta started selling “basic economy” fares — dubbed by some as “Economy Minus” or “Last Class” — on about 40 percent of domestic flights. American and United rolled out their versions of suck tickets last month. While the basic economy fares will save you money, they’re not right for everyone. Such tickets sometimes don’t even allow you to bring a carry-on aboard the plane if it won’t fit underneath the seat in front of you.
The strategy is comparable to how hotels have priced rooms for years. “In that case, you’re not just paying for one type of room, you’re paying for a standard room, or a suite, or a deluxe room, or one with a view,” says George Hobica, founder of the flight-deal web site AirFareWatchDog.com.
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The approach reflects increased competition for budget flyers. International airlines like Iceland’s Wow Airlines and low-fare U.S. carriers like Spirit and Frontier are muscling in on the legacy carriers’ turf, pushing the airlines to find ways to remain attractive to frugal flyers who are willing to accept no-frills service. It’s their attempt to fill seats that would otherwise remain empty.
In the statement announcing its basic economy tickets, American Airlines President Robert Isom framed the move as one that would help the airline meet the needs of more customers. “American Airlines now has something to offer everyone, from those who want simple, low-price travel to those who want an ultra-premium experience via first class. Importantly, this new fare product also gives American the ability to compete more effectively with the growing number of ultra low-cost carriers.”
The Basics on Basic Economy Tickets
The basic economy tickets will be clearly labeled as such at purchase, and the airlines will give you a chance to upgrade to a standard economy seat. Given that the difference could only be $30 to $40 for shorter flights, it might be worth it to spring for the pricier seat. However, there are subtle differences between the basic economy fares on each airline that are worth noting.
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Regardless of carrier, your basic economy ticket is going to be a middle seat (you don’t get to choose at purchase, although American passengers can pick their seats at check-in), and you’ll be among the last group to board the flight, unless you have an airline credit card. That can make the tickets a poor choice for families flying with young children. “It kind of puts families in a position where they don’t have much of a choice other than to pay the higher fare if they want to be able to sit together,” says Jeff Klee, CEO of CheapAir.com.
If you end up over-packing and can’t fit your luggage under the seat, you’ll be forced to pay to check it, which could wipe out any potential savings, although the rules vary. Delta still allows basic economy passengers to bring one carry-on, and credit-card holders with all three airlines still get priority boarding.) The tickets are also non-refundable, not even with a change fee. So if you’re not totally certain of your travel plans, steer clear. Finally, basic economy tickets also won’t always help you rack up loyalty miles. They earn reduced mileage awards at half the rate of standard economy tickets on American airlines, and they won’t count toward elite status at United.
Still, if you’re trying to decide between a basic economy ticket on a legacy airline and a similarly priced ticket on a budget airline, you’re better off opting for the larger carrier. That’s because if your flight is ultimately cancelled or delayed, the legacy airline has a stronger network to reroute you quickly and get you to your destination. Plus, the in-flight service will likely be superior. Once you’re on board, the experience will be no different for basic economy ticket holders — they’ll still get access to the same meal or snack service and entertainment options as other passengers. That experience, of course, is also getting scaled back. American announced last month that it would no longer purchase planes with seat-back televisions.
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Not every airline is racing to rock-bottom ticket prices. Southwest Airlines CEO Gary Kelly said on a recent conference call with Wall Street analysts that he would rather focus on offering the same experience to everyone, rather than splitting flyers into tiers, which can “complicate” the message the brand has been focused on delivering. “With every other airline, they focus on the elite customers and they ignore the rest,” he said. “That is our biggest opportunity. We don’t ignore anybody.”
Still, he didn’t rule out Southwest making the shift down the road, if there were a “good reason” to do so.
