American Airlines has just announced that basic economy fares will once again include the ability to take free carry-ons as of September 5, 2018. This change applies for tickets purchased or flown as of that day, so even previously booked tickets would be eligible for a free bag. Until then, the current restrictions will continue to apply.
American says that this is to make basic economy “more competitive.” Here’s what Robert Isom, American’s president, had to say about the change:
“Basic Economy is working well in the markets where we offer it, and we continue to see more than 60 percent of customers buy up to Main Cabin when offered a choice. Removing the bag restriction will make Basic Economy more competitive, allowing us to offer this low-fare product to more customers.”
I love how airline executives will claim victory no matter what, even when they’re rolling back a change because something clearly isn’t working. Isom claims that it’s working well in the markets they offer it, and that more than 60% of customers pay extra to avoid it. But now they’re going to make it “more competitive” so that presumably more customers book basic economy economy fares.
When it’s convenient Isom claims the metric of success is how many people pay extra to avoid basic economy, but now he’s saying he wants more people to buy those fares. The 60% number doesn’t account for all the customers who choose to book other airlines because of the existence of these fares, and that’s a much more valuable statistic.
This is just such exciting news. It’s not just about the removal of the restriction as such, but rather it’s so satisfying to see one of the “big three” US carriers say “oh yeah, we got a bit greedy there.”
American first introduced basic economy fares in early 2017. They started by testing them in just a few markets, and then quickly expanded to most of their domestic network. However, over time we’ve seen them roll back the prevalence of these fares, and offer them on fewer flights. Clearly they realized that they were losing business to the competition.
With carry-on bags once again being allowed on basic economy fares, the restrictions for these fares include:
- You can only pay to assign a seat at most 48 hours in advance, and otherwise you’ll be assigned a seat at check-in
- No changes allowed
- No upgrades
- Group 9 boarding (elite members and credit card holders who get priority boarding are exempt)
It’s oddly thrilling to see one of the “big three” US carrier roll back restrictions on basic economy fares. The US airline industry doesn’t have enough competition, yet it’s nice to see that consumers have behaved in a way that caused American to reconsider this policy.
It will be even more gratifying to see Scott Kirby at United roll back their basic economy policies, given that he bragged about how the airline would make a billion dollars on better segmenting the market (aka introducing basic economy).
Interestingly Delta has offered basic economy for many years, and since day one they’ve allowed carry-ons. Delta just consistently seems to be smarter than American and United when it comes to this stuff.