Over the past few years we’ve seen basic economy fares expanded greatly at the “big three” US carriers.
Airlines market these as being lower fares that enable them to compete with ultra low cost carriers, though in reality they’ve used these to try and get people to pay more for the same product they received before.
Delta was the first of the major US airlines to introduce basic economy, and they did so back in 2012. Delta has been the least punitive of the “big three” US carriers when it comes to basic economy. American and United added basic economy in early 2017, and have done everything they can to make the fares unpleasant (though American decided to roll back some of those changes).
For the most part airlines at least haven’t expanded basic economy to award tickets. The exception is Delta, which last December started rolling out basic economy tickets on a limited number of domestic routes.
I guess this latest update shouldn’t come as much of a surprise, given that Delta’s frequent flyer program is the closest to being revenue based. That means the number of miles required for a ticket is often closely correlated to the cost of a paid ticket on the same flight.
Well, now Delta has rolled out basic economy award tickets on all flights within the United States and Canada. As they describe it, “basic economy is a value-driven option for members who require less flexibility when traveling.” Those who book basic economy award tickets won’t be eligible for:
- Advanced seat assignments
- Paid or complimentary upgrades
- Paid or complimentary preferred seats
- Voluntary changes (including same-day standby confirmed or same-day standby travel changes), cancellations, or refunds, regardless of Medallion status; one of the benefits of award tickets for Platinum and Diamond Medallions is that you can refund the tickets for free up until 72 hours before departure, and that doesn’t apply here
As mentioned above, it’s not surprising to see Delta be the first airline to expand basic economy award tickets on a widespread basis, given that:
- They’re typically the “innovator” among the big three
- They don’t have an award chart, and that their award pricing is dynamic, which makes it easy for them to implement something like this
Delta seems to peg the value of a SkyMile somewhere around one cent, sometimes a little bit more.
For example, take the below flight from Los Angeles to San Francisco. A cash ticket costs $64.30 in basic economy or $94.30 in regular economy.
If redeeming SkyMiles you’re looking at either 5,000 miles plus $5.60 for basic economy, or 6,500 miles plus $5.60 for regular economy.
As you can see, in this case the “upsell” from basic economy to regular economy is less when redeeming miles (1,500 SkyMiles rather than $30), so the general pattern is followed.
Now the question is just how long it takes until American and United implement this on a widespread basis. I would find this more concerning for those carriers, given that they still have award charts.
What do you make of Delta expanding basic economy award tickets? Do you think American and United will follow?