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No-frills fares take off
GULLIVER wrote last week about American Airlines handing indignant flyers a
notable victory. The carrier rescinded a plan to take away an inch of legroom
from economy-class seats on new planes, following a public outcry. Such
concessions are rare. Airlines generally worry about how customers vote with
their wallets not how they grumble with their words. Hence, they cut comforts
to offer the low fares that people demand.
Anyone hoping that American Airlines climbdown might signal a reversal of that
trend should think again. Earlier this year, United Airlines introduced a new
class of fare, basic economy . Such tickets, which strip out those few
remaining comforts that economy passengers enjoy, have been derided as last
class . But, like it or not, cost-conscious passengers are showing their
approval.
The airline expanded the programme to all domestic markets last month. Andrew
Levy, United s CFO, said last week that about 30-40% percent of economy-class
passengers have chosen basic-economy fares since they were introduced. These
fares tend to be $15 to $20 cheaper for a one-way flight than regular economy,
but they come with significant drawbacks. Flyers cannot take a carry-on bag on
board (just a personal item), select their seats in advance, or be eligible for
certain upgrades. And the fares are not even lower than they were before. As
the airline explained to Gulliver earlier this year, basic economy tickets cost
the same as standard economy ones used to. It is the latter that have been made
more expensive.
So there is good reason not to love last class. Yet flyers are choosing it in
their hordes. It is an inspired move by United and the other big American
carriers, many of which have adopted similar programmes. Passengers who fly
basic economy are often confused or surprised by the restrictions and end up
paying extra to carry on bags. Often those fees are larger than the difference
between the fares for standard and basic economy. Those who fly standard
economy are now paying more for the privilege.
The profits for United will be mighty. Delta, which was the first to introduce
basic economy, earned an additional $20m from it in the first three months of
2016. And that was when it was available on only 8% of the airline s routes.
For travellers, there is less to be excited about. On social media, some flyers
have expressed confusion and frustration over the restrictions (although, to be
fair to the airlines, they are hardly hidden). But one angry flyer might have
inadvertently put it best when tweeting:
How many times does @United have to abuse me before I finally leave it? #
BasicEconomy, with its no carry-on policy, is such a sleazy move.
Miss GoWhitely (@missgowhitely) June 3, 2017
The answer appears to be many .