Several years ago, Delta began experimenting with a new fare type called Basic Economy. The fare provides an opportunity for greater savings, but with limitations that may not be right for all travelers. As Delta expands this fare to more markets, United and American and preparing to offer a similar fare type later this year. What are the restrictions of these fares and how does it fit within your corporate travel policy? Our UNIGLOBE experts answer these and other questions.
Where will we see these fares and what is the price difference?
Delta began testing their Basic Economy back in 2012 in a very limited number of leisure markets. They have slowed expanded the offering and we expect to eventually see them in almost all markets. United and American have both announced that they will launch these fare types this year. While United and American have not yet finalized the names or attributes of their fares, all indications are that they will follow the same restrictions as Delta.
The fares are aimed at those travelers for whom price is the primary factor and are willing to forego certain flexibility and choice. Essentially, this is a response to ultra-low fare carriers like Spirit. We have seen that on typical domestic routes, prices are 10%-20% lower than standard economy. In real terms, the discount has ranged from $15 on a short one-way up to $50 on a longer round-trip.
What are the inclusions & exclusions of these basic economy fares?
The basic economy fares are differentiated from standard economy based on 3 main factors: seat selection, upgrades and ticket flexibility. When buying a basic economy fare, seats are assigned at or after check-in, but cannot be selected in advance. Additionally, when you purchase these fares, there is no opportunity to upgrade to a premium economy seat or first/business class, whether by paying or through your frequent flier status. Finally, these tickets are essentially “use-it-or-lose-it”. Whereas standard economy tickets can be changed for a fee, basic economy fares cannot be changed or refunded.
However, the onboard experience is the same as standard economy – the food selection, entertainment, seat recline and other related features once onboard the aircraft is not differentiated between those who bought basic or standard economy fares. In addition, these fares do earn you frequent flier miles.
I have status through the frequent flier program. Ho does it affect me?
When buying basic economy fares, only a limited set of frequent flier status benefits will be available to you. At the airport, you will continue to have access to priority check-in, security and boarding. However, your status will not entitle you to select preferred seats, nor will they give you access to premium economy or first/business class.
How does this affect my company’s travel policy?
Many corporate travel policies require the use of “lowest logical fare”. It is up to each company to determine if the use of these fares types is considered “logical”. We have seen many companies exclude these fare types from their program due to their significant restrictions. If you are uncertain of the role of these fares in your travel program, ask your company travel manager, or your UNIGLOBE agent.