Ouch: United Expands Basic Economy To Virtually All Domestic Routes

Filed Under: United

United has been rapidly rolling out basic economy. The concept was initially tested on non-stop routes between Minneapolis and each of the United hubs.

That apparently went okay because literally the day after the first United basic economy passenger had taken to the air — and presumably survived — the concept expanded to further non-stop routes from a variety of hubs.

This only seems to be the beginning, as United has now rolled out basic economy to virtually all domestic flights.

I found basic economy on literally every domestic route I searched except those to Hawaii. That includes:

  • Nonstop routes
  • Single connection routes
  • Double connection routes
  • Business routes
  • Leisure routes
  • Alaska routes

United’s basic economy on a double connection route

A real gouge for connecting passengers

[Edit:  A few readers have pointed out that basic economy passengers can’t bring regular carry-on’s onto the plane at all. Therefore, if they bring one to the gate, they’ll have to gate check and pick it up at their final destination. So in that case, they would only pay the $25 penalty once, not for each flight. So I guess that’s good in the sense that you aren’t going to be dinged multiple times, but bad if you actually want your bag on the plane with you.]

As a reminder, with United’s version of basic economy you can’t make any changes to your ticket, don’t get a proper carry-on, can’t assign a seat, don’t have a chance at an upgrade, and won’t earn any elite qualifying miles.

Premiers flying on these fares get a carry-on, but otherwise the rules apply to them as well.

It’s to the point that you practically need to sign and notarize a waiver before United will even sell you a basic economy ticket.

Confirmation screen before you can buy a basic economy ticket

I would argue that the general public probably doesn’t care about upgrades, miles, refundable tickets, or possibly even seat assignments. But they do care about paying for bags. And they’ve been conditioned for years to pack a carry-on rather than a checked bag, if they want to avoid fees.

Now when they show up at the gate with their roller, United is going to charge them $25 for the privilege of [checking it to their final destination, in addition to the chceked bag fee. This is in contrast to Frontier which will allow you to bring a regular carry-on onto the plane, you just need to pay the fee and get a special tag for it.] bringing it onto the airplane. And they are going to do this at each connection. 

So if you’re flying from Albany to Redmond — a route that requires a double connection on United — you are going to get charged the carry-on bag fee three times! You’ll pay $25 when you board the plane in Albany. Another $25 when you board in Chicago. And yet another $25 in San Francisco.

Cha-ching. Cha-ching. Cha-ching.

I bet Scott Kirby is laughing all the way to the bank. And somewhere Jeff Smisek is smiling.

Buying your way out of basic economy

The goal of basic economy isn’t actually to save you any money. Rather, airlines want to get you to spend more for a regular economy ticket by stripping away the benefits from the cheapest tickets. United even has warning screens advising you that your experience may be miserable if you buy this ticket.

In my quick searches, it seemed that the cost of buying your way out of basic economy is between $15 and $40 each way. The price generally increases with the number of connections, presumably because United knows the alternative is to pay the carry-on fee multiple times.

Is this just a thinly veiled fare increase for elites?

United’s version of basic economy is really punitive for their elites flyers. That’s because United doesn’t award elite qualifying miles on these tickets. So even though you’ll earn award miles, these tickets won’t help you requalify for elite status.

That makes zero sense to me since award miles have a cost to the company while premier qualifying miles only have a cost if they incrementally pushed someone over the next elite threshold.

If you have Premier status with United, and have any hopes of keeping that in the future, you probably aren’t going to want to buy these dastardly fares. Which means this is really just an across-the-board domestic fare increase of $30-$80 per round trip, to be borne by their best customers.

So you made Premier last year, eh? Great. Want to use your benefits? That’ll be an extra $75.

Bottom Line

United has rolled out basic economy to pretty much every domestic route except flights to/from Hawaii. This no longer has anything to do with the low cost carriers and is instead a money grab.

On many routes, United will now be horribly uncompetitive to the point that I simply can’t understand why non-status passengers will even fly them. And that’s assuming they even wanted to fly them, which of course many don’t after the Dao dragging incident.

What do you think of United’s domestic roll out of basic economy?

(Tip of the hat to View From The Wing)

  1. Southwest is the new premium economy – and I mean that in a good way towards Southwest.

  2. Unfortunately, they (the big 3) will continue to do whatever they want bc they have a monopoly on traffic in the states. Who else are you going to fly? Even with an “I’m boycotting them” attitude, you will eventually fly them. We had the same “fallout” when they started charging for bags and today it’s normal. People have places to go and they will continue to pay whatever the airlines charge.

  3. They’ve already lost 2 flight bookings from me since rolling this out. Doubt they’ll be the last.

  4. What about miles earnings on Star Alliance airlines? For example if i fly Basic Economy and credit it to LH Miles and More, will I earn with LH or it’s a fare bucket that doesn’t earn?

  5. This is almost funny, until you realize how sad it is. It’s just more of what we’ve become used to over the last 10 years or so: make the passenger experience more and more miserable so that people will pay more and more to avoid the worst of it. This move makes that strategy painfully explicit.

    As for me, I avoid UA whenever I can nowadays – and have done that since well before the David Dao incident (which was completely unsurprising to me, a veteran UA flyer). I much prefer Southwest, Jetblue, or even Delta. Although they aren’t perfect, at least they are not quite as tone deaf to their customers as United.

  6. @mike: ” united trying to be spirit for more money”

    Exactly. And just like I avoid Spirit like I avoid the plague, now I have even more reason to avoid United.

  7. I feel for the “business” travelers whose company requires that they purchase the lowest fare. I wonder if United did an analysis to see how many travelers, if able, will use a different airline just so they don’t have the “option” of a basic fare?

    No way will I ever purchase one of these..ever..never ever!

  8. Ben,

    What would happen if the airline rating sites reclassify United (and the other 2) as low cost carriers. Would that serve as a wake up call to them? I assume it would’t, but it would send a message that they are no longer considered a full service airline in the eyes of the industry.

  9. Qasr — I think I’m seeing BE on DEN-DCA. Would you mind sharing some dates where it’s not loaded? Thanks.

  10. I think the long term risk with this though is that people – particularly millennials – will become conditioned to travel with less and then eventually there will be no new revenue requirement… When I first started travelling I used to go with one large suitcase checked then I went to a large carry on and now due to my experiences with WOW I’m now able to go a week with a tiny backpack… so no money will be made on me….

  11. I love the legend at the bottom of the comparison screen pointing out that the checkmark doesn’t actually mean you get it all with an economy booking, just that you have the option to pay even more for some parts of it.

  12. @Anwar: “Unfortunately, they (the big 3) will continue to do whatever they want bc they have a monopoly on traffic in the states. Who else are you going to fly?”

    Anwar, have you ever heard of Southwest? They carry just under 20% of all domestic passengers. Add in JetBlue and Alaska/Virgin and you’re just shy of 30%. Add Spirit, Frontier, and Allegiant and you’re up to about a third, give or take a few tenths.

    It’s true that if your travel involves relatively small cities you may have no choice but to deal with AA, DL, or UA. But the majority of Americans have at least one, if not more, of the non-network carriers as an option.

    @AdamW – almost all companies reimburse corporate travelers for necessary bag fees, so I don’t think this is really that much of an issue.

    I think this is a terrible policy, but I will at least give UA credit for making the restrictions pretty clear.

  13. Your description of the fees associated with full-size carry-on bags is inaccurate. Basic Economy customers (excluding Premiers and Chase MP cardmembers) are not permitted to bring a full-size carry-on into the cabin, period. Their bag will be checked at the gate subject to regular checked bag fees plus a $25 processing fee. Therefore a customer on a connecting itinerary will *not* be dinged with a $25 fee for each segment; they will pay the checked bag fee + the processing fee only on the first segment.

  14. qasr — I’m looking at united.com and show the 9:48 AM non-stop for $179 in BE or regular economy at $199. Are you by chance on a corporate booking site, or somewhere else that is screening out the BE fares?

  15. @Laurel: gate checking a bag, when you leave it on the jetbridge, you always pick it up again when deplaning. Basically, instead of gate checking it, it would pay to just pay a little bit to check it altogether. Many passengers will get a free checked bag anyway through a credit card.
    I doubt that this will affect the cost of the tickets I buy much, and will likely increase overhead space. Whether it’s bad for the airline itself, remains to be seen – it certainly won’t make them more popular. Let’s not forget that Delta invented the concept of basic economy though.

  16. Seamus and others — I was under the impression that these passengers could bring a regular carry-on onto the plane, they just had to get a special tag for it, kind of like how Frontier does it. But if it’s checked to the final, then agree, they’ll only pay the fee once.

  17. @ Travis — This post misstates how carry-on bags work with a basic economy fare. Basic economy passengers don’t have the option of paying $25 at each connection to carry a bag on the plane. If they show up at the gate with a full-size carry on (i.e., a carry on that cannot fit underneath the seat), they have to check it. They pay $50, which is the normal $25 bag check fee plus a $25 penalty for bringing it to the gate rather than checking it in through the normal process. United does not want people to go from one connection to another with carry-on bags, holding up the boarding process at each one while they fish out their credit card to pay another $25 fee. Full-size carry-ons just aren’t allowed for basic economy.

    Separately: I don’t agree that “United will be horribly uncompetitive” as a result of this move. I imagine it’s only a matter of time before Delta and American do the same thing, to the extent they haven’t already. Plus, time and again, we’ve seen that many non-status passengers only care about the base fare they are charged. Presumably United is rolling this out so quickly nationwide precisely because their tests in initial markets have shown that revenue overall is up as a result of basic economy. They’re not stupid. if they were losing more passengers than the incremental revenue gained, they wouldn’t do it.

  18. I’m confused over the belly aching. In the example you show above, the price difference is $30 bucks between Basic Econ and Econ. You can either check your bag and pay the fee (I think $25-$35/bag) pay the $25 per leg for carry on ($75) or buy up to the regular Econ fare which is $30 more dollars and carry on for free?

    Aren’t these rational choices with various price points? It’s also very explicitly laid on on the UA website.

  19. John — Others had already pointed that out, and I put in a note explaining it.

    As for your other point — they are indeed horribly uncompetitive right now. UA has had BE tickets for sale for a few months, and neither DL nor AA has matched the punitive restrictions. Maybe they will, but it’s not a given, and they certainly haven’t yet. And until then, there is no reason to fly UA over DL, all else equal.

    I’m sorry, but I also don’t buy into the idea that airlines make perfectly rationale decisions. I lived through the Smisek era on United. Nuff said.

  20. Southwest keeps looking better every day, pretty soon, you’re going to have to have a six digit yearly income just to be able to afford the no frills seat in a flying tube. Don’t even think about asking for onboard amenities.

  21. United has made themselves uncompetitive at Washington Dulles. They are already at a disadvantage being at an airport further from DC. Fox example, Southwest is just starting a Cincinnati route from BWI with promotional pricing. United is matching Southwest, but with a basic economy fare!  Another example is the short hop to Pittsburgh. United is price matching American out of Reagan on the route, but American is not using basic economy on the route but United is.  Also Southest out of BWI is a bit cheaper than both. So not only do you have to go to an airport that is further away you get a worse product for the same price. Dulles has its issues, but I liked that it was less crowded than Reagan and flights are better at being on time than American. I will be scaling back my flying on United.  While I am only one consumer the only way to end the race to the bottom is to make a different choice where the opportunity to do so exists. In the DC area we do have choices.

  22. @Adam

    I expect many companies will forbid this crappy fare, as many (most?) companies require their travelers to be able to change ticket reservations, and I think most companies’ clients would support purchasing the higher cost tickets as well, as if there are changes, clients are then paying for multiple tickets.

  23. “I would argue that the general public probably doesn’t care about upgrades, miles, refundable tickets, or possibly even seat assignments. But they do care about paying for bags.”

    If this is true, as it may be for some, it only makes sense to buy your way out if the difference is $25 or less. In the example you have in your post ($40), assuming I don’t care about those other benefits, I’m paying more for carry on baggage.

  24. Anthony Thomas — the cost to buy out of basic economy is as low as $15-$20 for non-stop and some 1-stop routes. So in those cases, it probably makes sense to buy up to regular economy. But if you are a United premier, you probably were going to anyway.

    And if you aren’t a United premier, you should probably be flying a different airline that lets you bring the carry-on for free.

  25. I think this is fine. For years, it has been common practice for the last 20-30 people boarding to need to gate check bags. This seems like a way to get the people who would have been in that group to check their bags at the check in counter and pay a fee. Should speed up boarding for everyone and make less work for the gate agents.

    I agree that United is probably messing up the pricing though. They need to lower things a bit more to be competitive. I just searched LAX-NYC and found that United BE is the exact same fare as JetBlue, VX, American etc, yet all of those competitors give more benefits.

  26. As a UA elite, this is a fare increase. I’m hardly happy about it, but it will just go into factoring whether or not I fly UA when I compare prices. I can live with it.

    The part that’s problematic for me is that OTA’s often don’t give you the choice. For example, the Ritz portal (which gives $100 off a domestic econ r/t for two) books into DL Basic Econ, and I imagine it will probably do the same for UA.

    Amex Travel, fortunately, appears to be the opposite, and books into Econ, and shows as a disorienting price disparity with Google Flights, which shows Basic Econ prices. At minimum, you certainly need to be on your toes if using an OTA or even a search engine.

    Now that the big three all have some flavor of BE, will the OTA’s and search engines catch up and allow you to properly search for the fare class you want? Or is there a reason they can’t?

  27. Ivan — I share your concern about using the Ritz portal, and others. But from what I can tell with a few quick searches, the Ritz portal is booking UA into regular economy. Take a look and let me know if you see otherwise.

  28. @Travis – On the claim that “neither DL nor AA has matched the punitive restrictions” imposed by United, in fact, American’s policy is quite similar to United’s. American does not allow full-size carry-on baggage on basic economy fares; there are no changes or upgrades; and basic economy customers are in the last boarding group. The only difference for non-elites is that American allows basic economy customers to pay to select a specific seat 48 hours before departure, but presumably that fee largely negates the price difference between regular economy and basic economy, so people who are willing to pay more for the ability to select a specific seat could accomplish the same thing by just booking regular economy in the first instance.

    The equation for elites is more complicated, but making basic economy ineligible for PQM is not bad for the “elites” that they actually want to target. Let’s say a bunch of people who otherwise would have made gold fall down to silver or lose status entirely because they often book the cheapest fare, and in this new world, the very cheapest fare isn’t eligible for PQM. That could be good for GS, 1Ks, platinums, and the golds who do make it by booking more expensive fares: Fewer golds means fewer people in the United Clubs, among other things; plus, the golds who do make it have less competition for domestic upgrades. As a 1K who would never book the cheapest fare anyway, I’m perfectly happy for United to make this change.

    The claim that United is “horribly uncompetitive” is equally unfounded. I just did a round-trip search using the example you quoted above, ALB>RDM on 9/9/2017. Just to make it typical of a flight a cost-sensitive consumer would book, I searched it as a round trip with a return one week after the outbound. United had the lowest fare in the market, at $494 for the specific outbound itinerary you highlighted, which is blocked at about 10 hours each way including connections. The only alternative that was even close to United’s price is an American fare for $509, and while that’s a regular economy fare (not basic economy), that itinerary is about 17 hours each way. So consumers on that route who don’t want to carry-on a bag can save $15 by flying United—or if they want a carry-on, they can decide whether it’s worth it to them to pay an extra $35 round trip to avoid 14 additional hours of flying on American (United’s regular economy fare on the route is $544 versus $509 for American). Since most fliers value their time at much more than $2.50 per hour, it’s very easy to see “why non-status passengers will even fly” United.

    I understand that is just one specific example, and in your comment, you added the qualifier that, “all else equal,” flying on Delta or American is better. Presumably by “all else equal,” you mean, assuming the price is the same. But that’s a silly assumption to make, as the example above illustrates: The basic economy fare is *not* necessarily equal to the regular economy fare. The two fares don’t even have to be linked. If United notices that bookings are going down because people prefer to book Delta/American regular fares, United can reduce the price of basic economy to the point where that’s a more attractive value proposition for most people. Indeed, that’s exactly what I would expect them to do if Delta/American don’t expand the roll out of basic economy.

    To be clear, I am not claiming that airlines are “perfectly rational,” as you suggested in your comment. That is a straw man argument. I am claiming that United is not plain stupid, certainly not when it comes to revenue management. Nothing in the Smisek era (which I also lived through) suggests otherwise. In general, we should take it with a grain of salt when a customer of a business claims to know better how that business should be run than the people who actually run it. Among other things, unlike us, who can only speculate about the financial results of these flights, United has actual data on how basic economy has been received in the market and how it’s affected their bookings and revenue. By all accounts from investor presentations, it’s been a complete success and is adding to their margins. In the face of actual data that this works, it’s hard to conclude that what United is doing is irrational.

  29. I don’t think this is a bad thing, with a caveat: If I pay more, I expect a better experience on-par with foreign airlines. I get shareholders need to be rewarded for holding what have been money-losing operations for so long, but “addition by subtraction” in what has been a price hike environment is just bad optics.

  30. Jeff Smisek is s silver-spooned little weasel. I could blame him alone I guess, but our illustrious Congress allowed all the mergers that brought us to this fate. As stated here already – they are ALL going to do the same in the name of the bottom line. I feel bad for the gate agents and flight attendants who have to deal with the fallout. When does it all end?

  31. I’ve been monitoring fares on a particular route (BOS-NYC). They’ve been $59-62 for weeks now on the dates I’ve been watching, booking into G. They’re the same price, but now book into N (Basic Economy). This isn’t about offering cheaper tickets to people who are willing to part with certain services. It’s about keeping prices the same while cutting services and encouraging you to pay more for what you got before for free (just like with baggage fees). Scam.

    Very disappointing. They could’ve even pretended they were cutting cares by chopping a buck or two off the prices I was monitoring, but nope, they kept them the same.

  32. As all of you do, I remember when flying was a pleasure. And, now when it is a requirement, I will seek the path of least pain. Loyalty for rewards is gone. I have flown Frontier more this year than any other airline because there is no pretense of a superior experience. Personnel on the ground and in the air are always pleasant to me because I am pleasant first. I bring my own seat cushion and, occasionally, a beverage. Ice is free. I have simply stopped caring, angling, negotiating — or hoping. Even with years of loyalty (million-miler on AA and UA) they could care less and neither can I.

    An additional thought, maybe the airlines lost respect for customers when customers started dressing and acting like they were traveling by bus. The whole experience is sad.j

  33. WELL! Finally there is some airline advantage to living in one of the forgotten cities!

    United, flies almost every flight in or out of here with an Embraer of one sort or another, usually pretty small. I’ve always preferred the little planes to the every-seat-full crowded cattle wagons, no matter what the airline.

    Of course, I haven’t flown United in 15 years. Even then they were the leader in abuse-the-customer, leading the movement to crowd in more seats.

    Thanks United. Now that America West and USAir are gone, you are the slime on the bottom.

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