April 18th marked the true beginning of the United Basic Economy era. The first flights under the new branding began flying in and out of Minneapolis that day. The company is celebrating that milestone with the expansion of the fare product into new markets. The next tranche of Basic Economy fares take effect starting with travel on 9 May 2017 and include routes between some hubs and also to spoke destinations. Additional markets are launching effective fore travel beginning 16 May 2017.
— Edward Russell (@ByERussell) April 18, 2017
Much like with the initial Basic Economy rollout the new markets are essentially seeing fares increase to cover the BE addition. Expect to see a $15-30 increase in fares for most markets, depending on segment length to avoid the Basic penalties. And Basic Economy is still not selling in connecting markets yet.
While many of the markets added in this latest round are ULCC competition, the theoretical target of such a product when it was first contemplated, not all are. This reinforces the reality that Basic Economy isn’t about the LCCs. Alas, United President Scott Kirby used yesterday’s earnings call and product launch to reiterate that the product is about “giving passengers a choice.”
— Seth Miller (@WandrMe) April 18, 2017
I don’t know many passengers that would take the “choice” to pay $20 more for the same service on the same flight compared to yesterday. The part where United is also choosing to only selectively match LCC fares in some markets. Charging $100 extra for a similar product is rarely a strong market position.
Of course, there are examples cutting both ways on this front.
As a reminder, the Basic Economy fares do not permit a carry-on bag (only a small personal item that fits under the seat) and passengers on such tickets will default to the last boarding group. Earning rates in the MileagePlus program are also reduced as part of the fares.
In the end this is neither a surprise nor particularly awful. Some fares went up this week. More will go up in the future. Thus is the way our travel industry is set to evolve in the coming months and years.
More on United Basic Economy:
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