It’s no secret that United Airlines has plans to introduce a kind of basic economy fare similar to what Delta Air Lines already sells, with a target of mid-2016. Everyone claims this is an attempt to compete with no-frills carriers like Spirit Airlines. But I’d argue that just as Delta was trendsetter in revenue-based loyalty schemes, it’s also leading the competition in basic economy. Spirit can be ignored to some extent. You can’t ignore an 800-pound gorilla like Delta. American Airlines has similar plans.
For a dose of hilarity, check out the Devil’s Advocate’s review of flying Spirit Airlines from Las Vegas to Los Angeles.
United hasn’t released details on the specifics of this new fare class even as speculation grows on FlyerTalk. Some already use the term “economy minus” for what is just standard economy, and I wonder what name could be given that is even worse. It’s meant as clever play on United’s Economy Plus seats with extra legroom in coach — one of the reasons I first earned elite status with United.
I have an anonymous source who offered some information, but which obviously I can’t corroborate further other than to say I know and trust this person. Like Delta, my source says United plans to offer zero benefits for its version of basic economy. Even if you have invitation-only Global Services status, you won’t be eligible for an upgrade, priority boarding, seat assignments, or same-day changes. And if you think you can get around those rules by changing your ticket later to a higher fare class, think again. There will be no changes or refunds allowed.
That’s not big news. I think it’s consistent with most people’s expectations, although extending such restrictions to Global Services seems a little surprising. (Then again, if you have Global Services status I wonder how you manage that while buying basic economy fares.)
What’s more surprising is that this person suggests United plans to raise other fares by 10-15%. In other words, basic economy won’t be a new, cheaper fare class. United will just raise everything else so it looks cheaper.
I really don’t see how that strategy works. If the goal is to compete on price, it doesn’t make sense to keep the same (presumably higher) fares. The target market is comparing one airline’s lowest fare to another airline’s lowest fare, not multiple fares offered by the same airline.
In a recent Bitcoin Code review, it’s been said that in United’s defense, the economy is improving and airlines are raising fares across the board. This rumor could be satisfied by holding basic economy fares at the current baseline and letting other fares go up naturally. But 10-15% is a big number when you consider some people report increases as small as $3.
I don’t think that United’s version of basic economy will be quite as bad as Spirit. In the Devil’s Advocate’s review, he points out numerous cases of fees that are not just optional but punitive, too. I can understand charging for checked baggage. Charging for carry on bags is questionable, but can be justified. Charging double for carry on bags if you pay your fee at the gate, rather than at check-in, is just mean. Spirit knows that customers have no options once past security to send the bag home or leave it in the car. It must go with them on the plane, and so they shell out $100.
So I’m not especially worried about basic economy fares. As long as you’re traveling on a decent airline (and yes, I’m calling United “decent”) you should be alright. What I am concerned about is the rhetoric used to justify them. At some point it’s no longer about trying to match the competition. There’s no reason United should raise its other fares to compete with Spirit, and travelers shouldn’t have to worry about whether basic economy might be another way to slip in a new fee or price increase somewhere else.