American Airlines Delays The Introduction Of Basic Economy Fares

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In October 2015 Scott Kirby, the then American Airlines’ president, used a Wall Street earnings call to announce that 2016 would be the year American Airlines would introduce a new type of fare which would be priced to compete with low-cost carriers like Spirit and Frontier. We were told that “Basic Economy” fares would be coming to American Airlines.

Well, Basic Economy fares are still coming to American Airlines but they won’t be coming in 2016 according to the airline’s earnings call to Wall St. yesterday.

American Airlines’ new president Robert Isom confirmed that, while the airline would be in a position to launch Basic Economy fares by the end of 2016, they won’t go on sale until January 2017.

The Dallas News quotes Isom as saying:

Right now our game plan is going to be to hold off on that and to start to roll out in January. I want to avoid the holidays and disruption to our folks.

What Are Basic Economy Fares?

Basic Economy fares have little to do with making tickets prices cheaper (which is what the airlines would like us to believe) and have everything to do with airlines further unbundling their product to squeeze out as much extra cash as they can from travelers.

American is already on the record as saying that it wants to “disaggregate the product” which would then come with “appropriate benefits”….and “appropriate benefits” is the key phrase.

What this phrase really means is that the airline will be handing out less benefits than ever before and hoping that passengers pay extra to keep those benefits intact.

Unsurprisingly the American hasn’t been very forthcoming when it comes to telling us what benefits will no longer be offered with Basic Economy fares but we do have some pointers.

Back in March this year (when American still planned to roll out Basic Economy in 2016) this is what Doug Parker had to say :

We’ll have Basic Economy rolled out by the second half of 2016. It will allow us to have a product in place to compete with ultra low-cost carriers, that can be differentiated from our other products so that things like upgrades will not be included which will mean a lo… a number of our customers won’t want to buy that product. Again, things that some others have done that we think make a lot of sense and we’re moving very quickly, we’ll have that in place by the second half of 2016 as well as Premium Economy across the international fleet.

No upgrades for passengers who purchase Basic Economy fares and I’m taking that to mean no complimentary upgrades for Executive Platinum flyers and no option to use 500-mile upgrades for other elite ranks.

Not only will the Basic Economy fares completely rule out upgrades for passengers who purchase them but the “regular economy” fares will still only give passengers the chance to be upgraded, there’s still no guarantee. Passengers will be paying more just to have a chance at an upgrade – just like they do over at United for some of their upgrade instruments.

It’s also fair to assume that Basic Economy fares at American will share a lot of traits with the basic fares that Delta and British Airways offer….so no advanced seat selection regardless of status, no baggage allowance etc….

This is not going to be pretty.

As I commented at the time, it was amusing to hear Parker have to stop himself from saying “a lot of our customers” and, instead, just say “a number of our customers” because he knows just how many American Airlines flyers will be affected by this….and it will be a lot.

Bottom Line

This is nothing more than a stay of execution. I don’t know if I believe Robert Isom when he says that American could roll out Basic Economy in 2016 but it’s choosing not to (he’s hardly going to admit that is airline is behind schedule if he doesn’t have to)…..but it really doesn’t matter one way or another. Whether we get basic Economy in 2016 or in January 2017 it’s still not great news.

For a lot of us 2017 is not going to be a good year to be an American Airlines Elite. Basic Economy fares, Premium Economy devaluing our systemwide upgrades, minimum spend criteria making it harder to reach elite status in the first place, a new elite level with a silly name that devalues Platinum status and more.

If there was ever a time to sit back and think very hard about where you spend your travel budget then now is that time because loyalty no longer appears to be a two-way street.

Airlines have every right to change the rules of the game they invented but we as consumers have every right to take our money elsewhere if we don’t like what we’re seeing. It’s only when the money takes a walk that the airlines may be forced to rethink all the negative changes they’re implementing right now.

So, if you keep spending with an airline you feel isn’t doing the right thing by you, you only have yourself to blame if things don’t get any better. Have a think about that the next time you’re about to buy a ticket.


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