What is Basic Economy?

What is Basic Economy?

Over the past couple of years, airlines have embarked on a competitive race to the bottom. This race to the bottom comes with a handful of changes such as slashed prices, gated features, and a new fare name. Airlines call this bottom, "Basic Economy". But what does Basic Economy mean?

After digging a bit further into the truth behind Basic Economy, we have come to the conclusion that more airlines are increasing their focus to offer Basic Economy fares for 2 major reasons.

1. Competition for passengers

In 2017, American Airlines reported 42.2 Billion dollars in revenue compared to a discount airline like Spirit, which reported only 2.6 Billion dollars . Despite the clear size advantage, these large commercial airlines still need to worry about the discount carriers. And the demand for low-cost carriers is evident - Spirit’s revenue more than doubled in the six years from 2011 to 2017.

In an environment where two airlines fly competitive routes, major airlines, such as American, feel as though they must match the low-cost airlines fare rates if they want to retain customers that are flying these routes on a consistent basis.

2. Pressure from investors

Now, despite the fact that airlines are offering a cheaper fare, this no-frills option is meant to target the most prudent passengers flying on a tight budget. Those who are still flying in coach, but chose options just above Basic Economy, are getting up-sold and end up paying more for what used to be considered standard elements of travel such as overhead space for carry-on luggage and complementary seat selection.

By offering a tiered pricing approach, airlines are able to stay competitive by catering to the frugal flyer, while still bolstering profits by charging for the basic amenities that other customers are willing to pay for.

What does Basic Economy offer?

Probably the best starting point with Basic Economy is figuring out what you actually get:

  1. You get on the plane — That makes sense. You definitely get a boarding pass with a Basic Economy ticket. The only catch here is that you will be the last to board, meaning that if you planned to use the overhead bin for your carry-on luggage, you run the risk of it being full by your boarding time.

  2. A seat — Well, kind of. Yes you get a seat, but when booking on major airlines such as Delta and Alaska, a Basic Economy ticket doesn’t include seat selection, even for a fee. Meaning that you're likely in a middle seat right between a jet engine and the lavatory in the back of the plane. As for other airlines, Basic Economy packages for airlines like United, Spirit and American give you the ability to choose your seat if you want to pay an additional fee.

  3. A personal item — Every airline allows you to bring a personal item such as a purse or backpack when booking Basic Economy. But for airlines like United and Spirit you'll be required to pay an additional $21-65 for bringing a piece of carry-on luggage. Which, you ultimately might have to check since you'll be boarding last anyway.

Here’s the breakdown of Basic Economy baggage allowance for some of the major airlines:

  • Delta: Travelers get one free carry-on and a personal item. Checking your first bag will cost $30 for domestic flights and $60 for international flights. Each fee includes one-way only.

  • American Airlines: Flyers get one free carry-on and a personal item. Your first checked bag will cost $30 for domestic flights and $60 for international flights. Again, these fees indicate the cost each way.

  • United: Basic Economy travelers only get one personal item, like a laptop bag or backpack, and no free carry-on. If you do arrive at the gate with carry-on luggage, you will have to pay the checked baggage fee on top of a $25 handling fee. These fees will typically also be $30 for domestic flights and $60 for international. 

  • JetBlue: Their new Blue Basic fare allows for one free carry-on and a personal item. Checking your first bag will cost $30. 

So the consensus here is that you will get a ticket for the flight, and you will get a seat but when flying with a Basic Economy fare you run the risk of having a poor flying experience and having to pay more for flexibility, a perk business travelers have noted to be extremely important to them.

What does Basic Economy not include?

  1. Flexibility — Basic Economy tickets offer no flexibility whatsoever. In fact, if you travel on a Basic Economy fare, you run the risk of losing your flight entirely. It's common to see a business trip postponed or canceled last minute, and with a Basic Economy ticket you are out of luck because there is no possibility to get a refund.

  2. Seat upgrades — Now let's assume that your trip is still on but someone flying business class finds out that their trip is canceled, you still won't get the upgrade. Basic Economy tickets come with a zero percentage chance of being upgraded regardless of circumstance.

  3. Status benefits — With a Basic Economy fare, even if you have elite status with the airline you are flying, you are not eligible for the perks and upgrades you could access on a regular economy fare.

Basic Economy is not all bad though. Truthfully, this pricing option works well for passengers flying on a budget. Not all flyers need the cushy seats or extra leg room that come with the higher packages, and with most business trips being under 250 miles, being able to select your seat, upgrade your fare, and pack only a carry-on can be worth the extra hundred dollars in some cases.

If you are traveling on a tight budget and don't mind the stipulations that come with Basic Economy fares, book away! But if you're traveling quite a distance for business and looking to find a way from point A to B that won't leave you bent over like a question mark, we'd suggest approaching your booking process with caution.

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About the Author: Connor Gross