Travelore Report, Monthly In Print Since 1971: basic economy

Showing posts with label basic economy. Show all posts

Tuesday, December 23, 2025

Travelore News: Basic Economy On American Will No Longer Earn Miles Or Loyalty Points, A Blow To AAdvantage Members

American Airlines just gave travelers yet another reason to avoid basic economy.

The carrier will no longer let its AAdvantage loyalty members earn miles or status-earning Loyalty Points when flying on its no-frills tickets.

It's a blow to AAdvantage members who had been willing to stomach the restrictions of basic economy in exchange for saving money.

The changes, spelled out on the airline’s website, apply to all new bookings made from Dec. 17 onward.

This isn't the first time American has taken a bite out of loyalty earnings for passengers flying on its basic bookings.

Until now, AAdvantage members flying basic earned 2 miles and Loyalty Points per dollar spent — a reduction from the normal 5 per dollar. Going forward, they'll earn none.

"We routinely evaluate our fare products to remain competitive in the marketplace," American said in a statement. "Basic Economy customers will continue to receive one free personal item and one free carry-on bag, free snacks, soft drinks and in-flight entertainment.”

Carriers first introduced the discounted ticket option in the mid-2010s as a way to compete more forcefully against budget airlines. We’ve seen policies — from ticket flexibility to carry-on rules and loyalty earnings — ebb and flow in the years since.

American basic economy: What to know

Until now, American had offered one of the most lenient basic economy policies of any U.S. airline, especially for its status holders.

American’s basic fares come with many of the industry-standard restrictions:

Most travelers can't select a seat for free

Passengers can't make ticket changes, and face a fee if they want to cancel

Basic economy customers board last

But AAdvantage elites and cardholders maintain most of their perks even when flying on the slimmed-down fares.

Because of that, I've occasionally opted to book the airline's basic fare class — especially as the price gap between main cabin and basic economy tickets has widened through the years.

I'll certainly be less likely to do that now that AAdvantage members won't earn any miles or Loyalty Points.

How other airlines compare

American’s move to strip away loyalty earnings on basic tickets is not without precedent in the airline industry.

Delta Air Lines similarly bars its SkyMiles members from earning any miles or Medallion Qualifying Dollars needed for status when flying on its basic economy (now “Main Basic”) tickets. United Airlines passengers do earn miles on basic bookings, but only get partial credit toward Premier elite status. Specifically, they get credit for Premier Qualifying Points, but not Premier Qualifying Flights.

Could more restrictions be next?

At this point, American flyers can only hope the airline doesn’t make additional moves to make basic economy even stricter — and more like its rivals.

Delta, for instance, doesn’t let its basic economy customers into its Sky Clubs.

United bars most basic economy passengers from bringing a full-size carry-on bag on board, carving out exceptions only for Premier elites and certain cardholders.

Both Delta and United elites are unable to gain free access to the airlines’ extra legroom seating section — normally a complimentary status perk.

We should also point out that Delta has also taken "basic" a step further with a no-frills version of its Comfort tickets, and has seemingly opened the door to basic first- and business-class fares in the future.

As for American, AAdvantage elites can still get upgraded and select Main Cabin Extra seats when flying basic ... at least for now. But they'll earn zero miles.

By Sean Cudahy

Monday, January 23, 2017

American and United Overhead Bin Fees: A ripple effect ?

New York Senator Charles Schumer has threatened legislation if airlines continue to monetize every atom, Senate minority leader said Sunday.

His target: Overhead bin fees. American Airlines recently announced that it would join United Airlines in instituting such a policy and Schumer feared of the ripple effect the move will have on other carriers.

American Airlines recently announced that it would join United Airlines in instituting such a policy and Schumer feared of the ripple effect the move will have on other carriers.

United announced late last year that it would adopt an overhead bin fee as part of the company’s change in pricing model. Under the new “Basic Economy” fare, travelers will be allowed to store a carry-on that fits below the seat, but will be charged extra if they want to lay claim to overhead real estate on their flights. More expensive Economy tickets still provide bin storage without additional charges.

The company has argued that, in creating a “new tier” of ticket, it has made airfare more affordable for flyers willing to travel lightly. Several weeks later, American Airlines unveiled a similar new policy with the same framing.

American Airlines liked the idea and argued it will now have something to offer to every passenger, from those who want simple low price transportation to those who want ultra premium First Class.

“American Airlines now has something to offer every customer, from those who want simple, low-price travel to those who want an ultra-premium experience via First Class,” said American Airlines President Robert Isom in statement announcing the news. “Importantly, this new fare product also gives American the ability to compete more effectively with the growing number of ultra low-cost carriers.”

“I’m announcing that in the upcoming FAA bill, which regulates the airlines, I’m going to lead a push to expand the airline passenger bill of rights…to add provisions so they don’t allow these extra fees for the overhead and for some other things—because enough is enough,” Senator Schumer said at a press conference in New York.

“Jet fuel prices are low; competition is narrow because there are so few airlines,” continued Schumer. “Profits are way up and they’re gouging the consumer.”

Thursday, November 17, 2016

United Will Not Allow Lowest-Fare Passengers To Use Overhead Bins

Charging passengers more to use the overhead bin is one step too far.

Jeffrey Dastin

United will become the first big U.S. airline to limit low-fare customers to one carry-on bag that fits under a seat.

The announcement on Tuesday could frustrate flyers who already feel burdened with airline travel restrictions and fees.

United, the No. 3 U.S. airline by passengers carried, said customers who bought its cheapest fares would not be assigned seats until the day of departure, meaning people on the same ticket may be split apart.

United will also prohibit these travelers from carrying on bags that can only fit in overhead bins, and they will not accrue miles toward elite status.

The company expects the moves to add $4.8 billion to its annual operating income by 2020, although the figure does not include rising wages.

Fare initiatives such as “basic economy” will account for $1 billion of this, as more customers pay to check bags or select higher fares that give them two “free” carry-ons.

United’s announcement follows Delta Air Lines’ decision to sell cheap tickets that prohibit itinerary changes and seat selection.

“This action clearly shows how airline consolidation is eliminating choice,” Charlie Leocha, chairman of consumer advocacy group Travelers United, said in an email. “Simply stated, this is an example of airline consolidation gone too far, with choice and transparency being wrung out of the system.”

Delta and United hope to lure customers with cheap fares and upsell them once they reveal the conditions of the ticket. It’s a practice they are using to compete with low-cost carriers Spirit Airlines and Frontier Airlines, which charge for add-ons including carry-on bags.

“Customers have told us that they want more choice and Basic Economy delivers just that,” Julia Haywood, United’s chief commercial officer, said in a news release.

The boarding process will also be faster because fewer customers will be searching for overhead bin space, United said.

Chicago-based United said it would begin selling the no-frills fares in the first quarter of 2017 for travel starting in the second quarter. Prices will be comparable to low fares it now charges for the economy cabin, but with more restrictions.

The initiative is part of United’s long-promised plan to rival Delta, which is more profitable and cancels fewer flights.

(Reporting by Jeffrey Dastin in New York, additional reporting by Ankit Ajmera in Bengaluru; Editing by Lisa Shumaker, Sai Sachin Ravikumar and Ted Kerr)

Thursday, February 18, 2016

Airlines To Offer Cheaper Flights, But Are They Worth The Savings?

Graham Roumieu

Rock-bottom fares once unique to low-cost carriers like Spirit and Frontier may, in the coming months, be offered by all three of the nation’s legacy airlines, American, United and Delta.

Great news for you and your wallet, right? The answer isn’t so clear-cut.

Spirit Airlines cemented its no-frills reputation a couple of years ago when it declared itself the “home of the bare fare”: a ticket that doesn’t include a seat assignment, a checked bag, even water. (The airline’s Twitter accountis duly frugal: “A big social media team costs money,” it explains, “so we put our feed on Autopilot to save you cents on every ticket.”) Frontier also offers bargain fares that don’t include seat assignments, in-flight entertainment and checked or carry-on bags as well as a slightly more costly package called “the works,” with privileges such as being able to choose your seat and bring a carry-on bag. Travelers have flocked to these airlines, drawn by fares like $53 each way between Chicago and New York on Spirit, and $79 each way between Miami and Philadelphia on Frontier. Unwilling to lose customers in certain markets where the low-cost airlines fly, major domestic airlines are rolling out their own no-frills fares.

Delta was the first to take the plunge, introducing “basic economy” fares on routes where it wanted to compete with discount carriers. Basic economy tickets do not include advance seat assignments. They cannot be changed or refunded (after a one-day grace period). And there are no free upgrades for anyone — even travelers with elite status, or travelers willing to pay to upgrade to business class or simply a preferred seat in coach.

Last year Delta put a number of changes to the fare rules into effect and announced that basic economy had spread to more than 450 markets since its introduction in 2012. Now the other big domestic carriers plan to follow suit. United said during its quarterly earnings call in January that it plans to introduce an entry-level fare “that will appeal to the purely price sensitive customer” in the second half of this year. American Airlines said during its quarterly call that it will roll out the first phase of a basic economy product in the same time frame.

The particulars of the programs are still under wraps. In the meantime, the frequent flier world is abuzz. On FlyerTalk, a popular frequent flier website and forum, United’s earnings call sparked chatter amid elites that the new discounted fares would be as restrictive as Delta’s basic economy fares. “I’m assuming as an elite we won’t be allowed to book these Entry Level fares right?” one member wrote. “Or we will and we won’t get any of our benefits?”

Another member pointed out that many business travelers work for companies whose policies require them to book the cheapest fare, which would mean they would have to fly with no perks and less flexibility. “A lot of business travelers are going to be hurt by this,” the user said. (Other members hypothesized that they would be able to avoid the fares because their company policy is to take the “lowest logical fare” — and that such stripped-down fares are not logical for business travel.)

For the most cost-conscious travelers, no-frills fares allow them to afford certain trips that they might not otherwise have been able to take. And, of course, no-frills fares are good for the airlines. “The more we segment our fares,” Jim Compton, vice chairman and chief revenue officer for United Airlines, told investors during the most recent earnings call, “the better opportunity we will have to minimize revenue dilution.”

It’s too early to know how these no-frills fares will affect different types of travelers (I’ll revisit that later this year). But the big domestic airlines are in the habit of copying one another, which suggests that Delta’s basic economy fares are the best indicator of what’s to come.

“We realize that Basic Economy fares aren’t for everyone,” Delta explains on its news site, “including families traveling with children.”

That’s in part because the fares don’t allow travelers to choose a seat in advance, so a mother could end up sitting in a different row than her children. (The airline makes it clear on its website what basic economy does and does not include.)

For travelers who frequently need to change their tickets, such fares are problematic because voluntary changes are not allowed.

For elites, the restrictions already implemented by Delta on such seats seems to send a message: We value your loyalty— sometimes.

“Delta’s elite frequent fliers need to shout from the rooftops, ‘I am not my fare,’” wrote Gary Leff, an air travel expert and author of the blog, View From the Wing. “I am a valued customer, or I am not, and how welcome I’m made to feel should not change between Tuesday on a full fare and Thursday on a discount one when I’m buying a ticket pretty much every week.”

For the occasional leisure traveler, how helpful the new fares will be remains to be seen. But let’s say that at some point you spot one of these rock-bottom fares on a big domestic carrier and it’s on par with a fare from, say, Spirit. Which carrier do you choose?

As a general rule of thumb, don’t assume that a low-cost carrier, or a legacy carrier that offers no-frills fares, always has the best price. You still have to do your homework, which means comparing prices as well as reading the fare rules, especially with regard to the flexibility of your ticket and its ability to earn you miles in your preferred program. Also look at which airline offers the most convenient flight times and airports. If possible, spending a few dollars more can be worth it. When Delta first introduced basic economy, Brian Kelly, author of the Points Guy blog, priced a particular itinerary and found a basic economy fare to be “a measly $12 cheaper.”

“Frankly, I’d rather pay the extra few bucks and be assured of a seat assignment I liked,” he wrote.

If looking at the fare rules and flight times doesn’t bring you any closer to a decision, and all things are still equal, consider the planes and the perks. Spirit, for example, has seats that don’t recline. There’s no Wi-Fi. Or video. A Delta basic economy fare is on a plane with seats that recline. Wi-Fi is available. You get in-flight entertainment. And a snack. So in that case, if the fares are about the same and you’re not trying to accrue miles, Delta would be a smart choice because you would have a more comfortable flight.

There is also the bigger picture to consider. Will economy seats with no benefits become the industry norm? Delta is already expanding its basic economy fares to routes where it does not compete with Spirit or other low-cost carriers. Will such fares further dilute frequent-flier programs by barring elites from upgrades? Will the big domestic airlines squeeze their smaller competitors, endangering their health and, in turn, healthy competition? We’ll learn more before the year is out.

Stephanie Rosenbloom