Basic Economy Fare is Bad for Business Travel
Running a travel program for your business can often feel like juggling. You have to balance your needs (like staying under budget and reporting accurate spend information), with your team’s needs (like having a comfortable travel experience, and being productive on the road).
We’ve seen travel managers use a lot of tactics to try and save their team money, including asking employees to book a flight with one or more stops or take a red-eye flight instead of an option at a more desirable time. Another trend that is becoming more and more popular with budget conscious finance managers is the Basic Economy fare.
On the surface, Basic Economy fares seem to be a great way to save money on desirable flights by sacrificing some of the fluffy extras that no one really needs anyway. But guess what? Not only will a Basic Economy fare give your travelers a worse experience, but there’s a good chance it will end up costing you more money than a typical fare at the end of the day.
What are Basic Economy Fares?
They’ve actually been around for a few years, and are part of the “pay for what you use” trend in airline pricing schemes. A Basic Economy fare gives you nothing but a spot somewhere on the plane. No bells, no whistles, no perks. In theory the model seems like it could work, as long as you know what you are signing up for. But a lot of the “perks” that don’t come with Basic Economy aren’t actually perks at all, they are basic necessities that business travelers need and value.
Comparison of fare types on 3 major airlines
For a real life example, let’s look at a midweek round-trip ticket from New York to Chicago. Fares for three of the major US airlines (American Airlines, Delta, and United) are almost identical, and the cost difference between Basic Economy and Standard Economy ranges from $49-$51. However, if a person is booked in Basic Economy on any of these airlines they are held to the following restrictions:
- No changes can be made to the reservation (even for a fee).
- No seats can be selected prior to check in (even for a fee).
- No miles can be accrued.
- No mileage related upgrades will be granted.
- They will board last, limiting access to overhead bin space.
- One airline also does not allow for the traveler to bring a carry on bag at all.
Now, just think if their meeting changes...you have to buy another ticket entirely and lose the WHOLE value of the existing reservation because across the board no changes are permitted. When you could have paid $50 more for a Standard Economy ticket and not had that issue at all. This alone speaks volumes and should be the primary reason you steer clear of basic, but limiting your team in this manner can also cause unnecessary stress which could lead to them showing up to their meeting late, unprepared, and frazzled.
Business travelers need to be fresh, flexible to last minute changes, and arrive to their destination ready to take care of the needs of your company, so a little extra money up front goes a long way for your crew and your bottom line. So we recommend steering clear of Basic Economy fares...who wants to be basic anyway? Unless, of course, we’re talking about a pumpkin spice latte and a hayride. Then sign me up!
Is is time for your company to set a corporate travel policy? Do your employees know what class to book based on flight length? Should nightly hotel budgets differ city to city?
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