Airlines will happily sell you a basic economy ticket, but they really wish you wouldn’t buy one.
That tension sits at the heart of a thoughtful new Washington Post story examining why airlines keep making their cheapest fares less appealing. The latest example: removing even the token mileage earning that once came with these tickets.
Airlines Can Be Like An Abusive Boyfriend
A new Washington Post story asks a simple but important question: why do airlines seem to hate basic economy passengers?
That framing may sound dramatic, but it gets to the heart of the issue. Over the last decade, airlines have steadily chipped away at the perks attached to their cheapest fares. No advance seat assignments. No changes. No cancellations. Last boarding group. Often a middle seat. And now, increasingly, no miles either.
That last point is what prompted the story. American Airlines stopped awarding miles on basic economy tickets in December. United will follow on April 2, with limited exceptions. Delta already made the move years ago. If you buy the cheapest fare, the message is becoming clearer: we will take your money, but do not expect loyalty in return.
In the WaPo piece, Gary Leff compares airlines to a bad boyfriend.
“We’re going to treat you really badly, so give us more money and we promise we will treat you better.”
That is a harsh analogy, but it is also an apt one.
The pitch is essentially this: we are going to treat you poorly, but if you just spend a little more, sign up for our credit card, buy up to regular economy, or earn status, then perhaps we will treat you better.
That is basic economy in a nutshell.
The fare exists partly to compete with Spirit, Frontier, and Allegiant. But it also exists as a punishment mechanism. Airlines want you to see the restrictions, recoil, and pay more. Basic economy is less a product they are proud to sell than a funnel designed to upsell you into something else. This is hardly a profound observation, but I think people still fail to understand what basic economy is really all about when it comes to network carriers.
Airlines Want Your Money, Not Your Loyalty
Henry Harteveldt said the airlines are basically telling the basic economy traveler, “we don’t value you or your business.”
“What the airlines are basically doing with these changes is telling the basic economy traveler we don’t value you or your business. The actions will not induce many of these travelers to become loyal.”
He’s absolutely correct. Airlines are happy to fill an empty seat with a basic economy passenger, but they do not necessarily want that passenger to become comfortable living there. They do not want basic economy to feel too good. If it did, too many travelers would stop buying up.
So the product must remain just annoying enough, or so the logic goes.
You can board late. You may not sit with your family. You may have to gate-check your bag. On some itineraries, the fare restrictions are so severe that a small change can wipe out the value of the ticket altogether. And now, on some airlines, even the tiny psychological reward of earning a few miles is gone.
That is not an accident. It is the point.
And Yet Basic Economy Still Beats Ultra-Low-Cost Carriers
The Washington Post correctly notes that even basic economy on the major carriers can still be better than flying a true ultra-low-cost carrier. You generally still get drinks and snacks. You usually still get a carry-on, though United remains a notable exception (no carry-on bags on domestic trips). The apps work better. Irregular operations are handled better. Rebooking is usually less painful. Onboard entertainment and Wi-Fi can also be better, depending on the carrier.
All true. I’ve argued before, that if you don’t like basic economy, you don’t have to buy it.
> Read More: Don’t Like Basic Economy? Don’t Buy It!
Because while major airlines have degraded the bottom tier of the product, they have not degraded it all the way down to the Spirit or Frontier level. At least not yet.
And that is why people keep buying these fares. Even so, I question the strategy.
It is true that the miles lost on a cheap ticket may not be worth very much anyway. On a low fare, you may be giving up only a few dollars in future value. But I think that misses the larger issue.
If loyalty is measured based on the dollar amount paid for the ticket, why discriminate against basic economy ticket?
Why not throw a few miles at someone because it just may well make them buy a ticket on one carrier instead of another. And more importantly, next time for other trips maybe they will come back and pay a lot more. The latest cutbacks to basic economy fares strike me as unnecessarily punitive.
CONCLUSION
Airlines created basic economy fares to compete against low-cost carriers, but they also use them to manipulate customer behavior. They want basic economy to be cheap enough to lure you in and miserable enough to make you regret it. Then they want to present the solution: pay more next time.
That is why Gary Leff’s “bad boyfriend” analogy is more true than many airline executives would care to admit.
And yet, travelers keep coming back because the big airlines still offer better networks, more reliable technology, stronger rebooking options, and a less painful experience than the bottom end of the market. In that sense, the abusive boyfriend analogy has another layer to it: the customer often stays because the alternatives are even worse…
Still, it seems to me that treating these passengers a little more kindly might well lead to more business and true loyalty later on.
Is removing mileage earning for basic economy a penny wise, pound foolish approach?
image: American Airlines
It’s very pound foolish. The biggest bang for the buck would be to award a small amount of miles, like 100 miles. That would encourage people to remain loyal to the airline and share with the airline their financial success in later years. It could be “I remember flying Delta during college, saving up those 100 mile earnings and now I am a road warrior building up on my 3,200 mile balance”.
I’m sure you know a thing or two about “abusive” “boyfriends.”
Why not the “abusive girlfriend”?
I suppose it’s like an airline that takes your money and doesn’t get you to your destination?
It makes you jump through lots of hoops?
The idea behind loyalty programs, ironically, was a sort of a dating game, wasn’t it? Mileage runs, booking more expensive tickets to get to higher tiers preferably if it was company money. Loyalty programs were originally geared towards the business traveler who were bribed with points to quietly steer business their way.
Someone who flies basic and only gets a token 300 or so points likely won’t even bother to fill out the FF account. That said, it is a foolish move to remove it entirely. People do stupid things to play games.
This prole (me) is happy basic economy is there.
Yes, flying in basic economy is the same as being physically abused by your boyfriend. Same thing. No difference.
Of course no one ever said that.
“Hit me harder, Daddy (United)! Make me pay extra for my carry-on! Board me last! Deny me miles and status credit!” Seems about right.
The way I see it, the airlines have responsibility to their shareholders to protect their margins. They would be wrong not to strip all unnecessary costs out of basic economy tickets, especially when the target buyer wants to buy transportation and nothing more.
The really annoying thing about those fare families is that they’re often designed on assumptions that pax will be buying them directly from the airline on straightforward one-way/return tickets and without any regard to the complexity of GDSs, alliances, RTW tickets, partner awards and so on.
I’m increasingly coming across award tickets without any luggage allowance, seat selection etc, and buying the missing services isn’t always straightforward when the ticket has been issued on somebody else’s stock… and that’s on top of the age-old issue of certain booking classes giving very few/no miles on partner FFPs and the inability to buy up to the ‘right’ class on the airline website.
Behavioural economics certainly play a role in defining the parameters of basic economy, but I suspect that good old incompetence is also a major factor.
Don’t love any comparison to actual abuse (obviously not what you intended). But… also just not sure it’s true.
I think the airlines are saying “Do you have firm travel dates and just care about lowest cost? Here you go. But if your travel plans might change, this ticket has penalties associated with it.” Seems very transactional to me. You’re going to get the same Biscoff and soda on board as everyone else. And if you care about not sitting in a middle seat, you can pay for it.
Actually, on the merits, AA actually has the most friendly family seating policy out of the Big 3 which applies even if you are flying basic economy. So it’s not all a parade of horribles – if you’re a family of 4 that flies 1-2x a year, in a strange sense you are best being ‘loyal’ to AA even if you’re not getting miles / engaging with AAdvantage. Can still sit with your family, you get carry on bags, etc. You might have to gate check your bags – whatever. In that scenario, I don’t think it really matters if you’re getting 2x or 5x miles on a $399 ticket to/from Florida – 800 or 2000 miles isn’t getting you all that much anyway.
I think a better loyalty pitch is honestly through credit cards – here’s a $99 credit card, you get 80k miles, can fly a family of 4 economy roundtrip on that. Versus you all now have 800 miles in your account that will sit there unused forever. And if you get the credit card, you are then more likely to not buy basic economy. But it has to start there, not from a $399 flight.
Maybe if you do have a co-brand card, you earn a minimum of 500 miles on domestic flights and 1000 miles on international even if you are in basic. I could see that being a feature people like.
I do think the counter risk to basic is that the folks that are loyal are getting annoyed with all of the seat switching that inevitably occurs because folks buy basic and then want to swap seats. Back of the plane on a US carrier is starting to feel like being on a bus (I think Southwest has now taken this to the absurd extreme banning switching when there are empty seats though, but I get the idea, I think). I think the airlines do an OK job with preferred seating for status members for that reason, although it’s not necessarily helpful for close-in bookings, and DL/UA clearly do better than AA because they offer more extra legroom seating for their status members.
When you date an abusive boyfriend the key is to get your moneys worth. I take the smoke detectors and blankets and anything else I can get. Using a pen do damage and rip is also appropriate.
The biggest issue is that people purchase Basic Economy seats (especially families) and then get mad that they can’t have a window or sit together. I know that airlines try to do their best. The thing about having a co-branded credit card is that some people won’t be eligible. The big 3 can take you places that some Low Cost Carriers can’t with the ability to fly cross country. With Southwest making its changes, I see more people doing Basic Economy. I don’t know the difference in pricing between Basic and Regular Economy and if it would make sense for people to upgrade to regular economy
As someone who knows many people who buy basic economy tickets: they generally don’t care about miles and loyalty. They never fly enough to accrue enough miles to get a free trip. Something tells me most people buying basic economy won’t be affected in the lease.