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American Airlines Surrenders To Reality On Basic Economy

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American Airlines Surrenders To Reality On Basic Economy

Unread post by bimjim » Thu Aug 02, 2018

https://www.forbes.com/sites/michaelgol ... c-economy/

American Airlines Surrenders To Reality On Basic Economy
Michael Goldstein
Aug 1, 2018

An American Airlines plane taxis Friday, April 13, 2018, at the Seattle-Tacoma International Airport in Seattle. (AP Photo/Ted S. Warren)

As summer gives way to fall, there’s a bit of good news for economy-minded passengers flying on Basic Economy tickets. American Airlines has announced that customers flying Basic Economy will be allowed one free carry-on (in addition to a personal item) to all destinations as of September 5, 2018. The policy change, though welcome, will be too late for the summer flying season.

Is this a major development, or just a concession to the reality on the ground (and in the air)? Let’s look at what Basic Economy is—and mostly, isn’t.

Basic Economy typically is the lowest-priced ticket the airlines offer, and passengers are treated as such. Airline policy to date seems aimed at getting passengers to upgrade to a higher-cost fare. Glen Hauenstein, Delta’s president, said of Basic Economy, “The success of that product in our minds is not how many people buy it, but how many people don’t buy it and choose another product.” Or as American Airlines President Robert Isom told USA Today “We've seen about 50% of the customers that are presented with the Basic opportunity fare are choosing to buy up. That's really good news...That is all improved revenue for us.”

(Disclaimer: I own stock in Southwest Airlines and Jet Blue.)

For the uninitiated, features of Basic Economy include no advance seat assignments, no eligibility for seat upgrades, no ticket changes permitted and no guarantee you will sit with your family or significant other. There is one guarantee: that you will always board in the very last group. And is typical with an economy ticket, there is no “free” checked luggage included. (Only two US airlines, Southwest Airlines, and tiny Cape Air, currently offer free baggage.)

While you will earn AAdvantage miles when flying American Basic Economy, “Elite Qualifying Miles (EQMs) and Elite Qualifying Segments (EQSs) earn at a reduced rate of 0.5 per mile/flight segment flown on flights marketed by American.”

To this unappetizing mix, United and American added another restriction. Basic Economy flyers are permitted one personal item like a purse or small handbag that fits under the seat and is no larger than 18 x 14 x 8 inches. But until now, United and American have banned Basic Economy flyers from using the overhead bin for carry-on items. (Delta permits it.)

Predictably, this has resulted in a battle over bin space. There have apparently been numerous arguments between flight attendants and Basic Economy passengers forced to pay a $25 fee at the last minute to check luggage.

And when Basic Economy passengers do board (marked as such with the “scarlet letter” of being the last boarding group) coach passengers, including “elites”, (those with exalted mileage status) complain that basic economy “lowlifes” are “stealing” bin space.

In this Tuesday, March 24, 2015, file photo, a traveler walks past a sign advertising a Delta Air Lines credit card at Seattle-Tacoma International Airport. Even if you make purchases with another card, consider getting the card of the airline you usually fly to enjoy benefits such as priority boarding and free bag-checking, even on so-called basic economy tickets. (AP Photo/Elaine Thompson, File)

As comedian Alonzo Bodden put it on Twitter, “If you ever questioned people's selfishness Check out the battle for bin space on any flight. Peace on earth my derriere. Christmas is over.”

So did American Airlines flight attendants tire of playing policeman in constant bin battles? Or is it because as American Airlines CEO Doug Parker said on American’s earnings conference call, the concession will allow the airline to "become more competitive.” President Robert Isom noted on the same call that the Basic Economy product from American had “fallen short of expectations.”

Whatever the reason, American Airlines flyers finally got a hard-earned break, leaving United the only no-bin-for-you player. Unless United wants to maintain its less-than-customer-friendly reputation, many experts are predicting that barrier, too, shall fall.

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