What’s an airline ticket?
That’s not a trick question. Two major airlines — Delta Air Lines and United Airlines — are quietly challenging our most basic assumptions. Another major carrier is expected to do the same any day now. And passengers, and the government, are pushing back.
In 2015, Delta formally introduced a new “basic” economy-class ticket, which doesn’t allow changes, refunds, upgrades or advance seat reservations. It had been testing the concept since 2012. Late last year, United effectively matched the fare, with a twist: It would also limit carry-ons to one personal item, à la Allegiant Air and Spirit Airlines. Oh, and if you think you can switch airlines to avoid these super-restrictive fares, think again. American has announced plans to do the same early this year.
Why? Airlines claim customers are asking for these stripped-down fares, and they cite two reasons: first, the unchecked growth of the ultra-low-cost airlines that offer these bare-bones tickets; and second, the fact that when they show customers a cheap fare, they buy it.
“We know some customers want it, because flights are full at airlines like Spirit, where pretty much everything is the equivalent of basic economy,” says Seth Kaplan, the editor of Airline Weekly, a trade publication. “We also know that because some customers have already been buying basic economy for a couple of years at Delta — even though for sometimes just an additional $15 or less, they could have a standard economy fare.”
Customers say they never asked for these fares, implicitly or explicitly.
“I don’t like these basic tickets,” says Pattie Haubner, a retired communications professional and frequent air traveler from Scarsdale, N.Y. “I believe the airline industry has introduced these fares so they can offer less and charge more for less.”
Dianne Sakaguchi, a technical advisor for a federal research center in El Segundo, Calif., says she’s not tempted by the new tickets. “I would never choose a basic economy fare,” she says. What’s more, the prospect of having to fly for business is getting more daunting.
“Travel used to be a normal part of work because face-to-face meetings work best to resolve very complicated issues,” she says. “Quite few people are avoiding the travel misery by using less effective telephone meetings. Basic economy can only make this worse.”
Here’s the basic problem: Air travelers and airlines can’t seem to agree on the definition of a ticket. Consumers may tolerate the discount carrier definition, which relies on upselling extras for making money. They may laugh at the absurdity of these low fares, and where it’s all headed. Ryanair famously predicted its fares would soon be “free,” thanks at least in part to its model of charging a low fare and then selling passengers services they need.
But on a full-service legacy carrier, even the cheapest fare should include essential amenities, like a confirmed seat, a carry-on item and a checked bag. To eliminate those amenities is like selling a car without vital parts, consumer advocates say. Technically, it’s still a car, but it’s hardly roadworthy.
“This is the way to increase profits,” says Roland Rust, a marketing professor at the University of Maryland. “Add-on fees add up. It’s like saying, ‘Here’s your new car, now would you like tires with that?’ And it’s similar to what the retail banking industry is doing — making an increasing percentage of their revenues from fees.”
The reaction to these wannabe tickets is measurable. American Express Travel tracked an astounding 208% year-over-year increase in first-class bookings last year. Some of this is attributable to airlines’ efforts to price premium seats more competitively, but insiders say it’s also a strong reaction against basic fares and a desire to have all the amenities and comfort once associated with an airline ticket.
Still, experts say the shift is inevitable — whether passengers like it or not.
“Air travel has been democratized,” says Jon Glick, a Partner with PricewaterhouseCoopers’s airline group. “More people have access to air travel than ever before. The business case behind it is that it’s a natural progression of growth. Airlines are creating these bare bones fares to capture even more of the flying public, allowing more people to have access to flying across a wider span of markets.”
Can anyone anyone act as a referee in this conflict? Sure. It’s the U.S. Department of Transportation, which is considering settling this dispute once and for all. It plans to create a rule that might require certain fees to be included in the price of a ticket. Those would potentially include baggage fees, seat assignment fees, and change and cancellation fees.
That would effectively upend the airlines’ business model of quoting a fare that doesn’t reflect the true cost of flying.
No one asked for these basic fares. But the airline industry is right: People will buy them because everyone loves a low fare. Never mind that when you say “yes” to a cheap fare you also ask for amenities to be removed, seats to be pushed closer together, and conditions to become even worse on the plane.
It’s a free-market paradox in which the airline wins — and you lose. It’s time to put an end to this madness.
How to fly in an age of ‘basic’ fares
• Who has them? In the United States, Allegiant, Frontier and Spirit are widely known for their no-frills economy fares. In Europe, Ryanair and EasyJet are also likely to have “unbundled” tickets, where everything from seat assignments to luggage costs extra. But you can also find them on larger, well-established carriers. For example, British Airways is known for charging extra for seat assignments.
• Who doesn’t? Some U.S. airlines have tried to differentiate themselves from the “basic” trend. They include carriers like Alaska Airlines and Southwest Airlines. Many established international carriers, such as Emirates and Lufthansa, also still offer at least one checked bag in the price for a ticket wherever they fly.
• What if you’re stuck with a basic fare? Passengers have reported booking a “basic” fare without knowing they did. If it’s less than 24 hours, you have a right to cancel and rebook. And don’t fall for the upsells, which may include offers to sell you a “confirmed” seat for a few extra dollars.