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What is Basic Economy?

No-frills air travel is lowering the price of airfare — but at what cost? explains everything you need to know about the rise of 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”.

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 a basic economy option for 2 major reasons.

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 that is evident - Spirits 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 discount airlines fare rates if they want to retain customers that are flying these routes on a consistent basis.

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 paying more for what used to be considered standard elements of travel such as overhead carry-on space and being able to choose your own seat.

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 consumers 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’re definitely getting on the plane 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 space for your luggage, you run the risk of it being full.

2. A Seat - Well, kind of. Yes you get a seat, but when booking on airlines such as Delta and Alaska, basic economy tickets don’t actually get to choose where they sit. 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 Bag - 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 carry-on. Which, you ultimately might have to check since you’ll be boarding last anyway.

So the consensus here is that you will get on the plane, and you will get a seat but when flying basic economy you run the risk of having a poor flying experience and having to pay more for flexibility which business travelers have noted to be extremely important to them.

Basic Economy tickets offer no flexibility whatsoever. In fact, if you book basic economy 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.

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.

Basic Economy is not all bad though. Truthfully, this pricing option works well for the 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, dealing with the seating 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.

How does your corporate travel policy stack up?

Posted by

Connor Gross
better corporate travel starts here.

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