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United’s basic economy fares have arrived and are now being sold on routes from Minneapolis to various United hubs across the country, including IAH. The reactions to the new basic economy fares have been mixed, but most seem to have taken a negative view of the changes that in many ways represent another “race to the bottom” between major carriers.
What are the basic economy fares?
Basic economy is a new fare class that is meant to compete with ultra low cost carriers like Spirit Airlines who offer some of the cheapest routes in economy. Presumably, basic economy fares were there to offer passengers lower economy fares than currently offered but with fewer benefits (more on this below). In United’s words, they were “[c]reated for our customers who may be more price-sensitive.”
On average you may find that the basic economy fares are about $20 to $30 cheaper than the standard economy fare each way. On the booking below from MSP to IAH, you can clearly see that basic economy is $20 cheaper.
So you save $20 but what benefits do you lose out on? When it comes to United, you’ll lose out on the following benefits:
Seat selection and upgrades not available
You will not be able to select your seat when you purchase your ticket and after its assigned you won’t be able to change it either. Also, even if you are a MileagePlus Premier member, you will not be able to upgrade your seat to economy plus, whether you are trying to do so by purchase or by complimentary upgrades as en elite member.
Group and family seating is not available
Groups and families will not be grouped together when assigned seats.
This is a pretty big hit for families who like to jump on those low fares and could easily cost them a couple of hundred bucks more just to keep the family together on the plane.
No full-sized carry ons
You’re not allowed a full-sized carry-on bag unless you’re a MileagePlus Premier member or companion traveling on the same reservation, the primary cardmember of a qualifying MileagePlus credit card or a Star Alliance Gold member. Everyone else who brings a full-sized carry-on bag to the gate will be required to check their bag and pay the applicable checked bag fee plus a $25 gate handling charge.
This is the change I have the biggest issue with, since it just doesn’t “feel right” to me. Luckily, Delta still allows a carry-on with its basic economy fare but both American and United have waived goodbye to the carry-on for basic economy. And what I really don’t like is if you don’t get the memo, that’s a checked bag fee and a “gate handling charge” of $25!
Admittedly, United does make it pretty clear what benefits you’ll be losing when you book a basic economy fare as evidenced below. The $25 fee is also mentioned in bold in footnote 2. They could probably make that fee a bit more apparent but I don’t think it’s quite as hidden as the fees are for airlines like RyanAir.
One personal item allowed
You are allowed one small personal item that fits under the seat in front of you, such as a shoulder bag, purse, laptop bag or other item that is 9 inches x 10 inches x 17 inches (22 cm x 25 cm x 43 cm) or less.
Flight changes and refunds are not allowed
With Basic Economy, you’ll also be in the last boarding group unless you’re a MileagePlus Premier member or companion traveling on the same reservation, the primary cardmember of a qualifying MileagePlus credit card or a Star Alliance Gold member.
Certain MileagePlus and Premier member benefits are not available
So it’s easy to see that basic economy fares are not going to be very pleasant. The no carry-on rule and extra $25 gate handling fee are what really get me, as I can understand the loss of seat selection and other benefits in consideration of the lower fee. But that’s not my biggest issue with the basic economy fares.
Are these fares actually cheaper?
View From the Wing writes that basic economy fares aren’t actually offering lower priced fares. How is that the case? Well, as Gary and many others will point out, United along with other major carriers like Delta and American have been working to compete with the low fares of the low cost carriers like Spirit for some time. (This is how you’re able to find those ridiculously cheap economy fares at times, like $40 one way to Miami.)
Now, with basic economy, those low prices will still be there but the tickets will be stripped down so that you lose basic benefits like taking on a carry on item, seat selection, ability to upgrade, etc. This is why a lot of people are unhappy about these fares. In many instances, basic economy fares have been presented as a new, cheaper way to fly when in many cases, those cheap fares already existed and they’ve just lost benefits.
I have to admit that I’ll have to do more research on these fares to find out how they compare historically to previous economy fares, but based on my limited research so far, it doesn’t look like United is offering new bargains to its passengers. So for now, every time I hear about the “cheap new basic economy fares,” I’ll just have to settle for a big eye roll.
Will this affect award tickets?
I understand that these airlines are in the business of making money and maximizing profits and that this type of segmentation is probably necessary given the state of competition that legacy airlines are facing. So I’m not so much against the idea of basic economy, as I am the way I see it being presented to consumers. I don’t buy into the idea that they created these low fares for “price-sensitive” consumers.
Instead, it seems like they adjusted their business model by further segmenting their price-sensitive consumers into those who will pay for basic benefits and those who won’t, all while not actually dropping prices. Since I still need to look in this more this is part conjecture, but I don’t see this as an overall win for price-sensitive customers and thus don’t care for the way it’s been packaged.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. His content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.