Consumers to businesses: Thanks for nothing!

In this season of gratitude, American consumers are feeling left out in the cold.

And with good reason.

Businesses seem to be amping up customer-unfriendly policies. The latest corporate mega-merger is unfolding, and it’s likely to be green-lighted by an incoming administration that kneels at the altar of an unregulated free market.

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The poster child for customer unfriendliness is United Airlines’ new basic economy class fare, announced last week. The fare removes many essential amenities passengers have always taken for granted, including advance seat assignments, the ability to upgrade, and collecting loyalty points.

In a twist, United’s basic fares also limits carry-ons to one personal item. In other words, you’ll have to check your luggage — and pay United for the privilege.

No one wanted it and no one likes it, except maybe United’s shareholders.

“This new fare will be a [expletive] of awesome dimensions, and I literally mean riots,” predicts Tom Harriman, an attorney and frequent traveler from Clarksville, Md. “Can you imagine the chaos such a fare is going to cause and how much time and energy United will waste?”

No, but we’ll just have to wait until United’s new “basic” fare debut next year.

Interestingly, not one of my readers — not a one — has ever asked me why United doesn’t offer a Spirit- or Allegiant-like cut-rate fare like this, stripped of basic human dignity. They always assumed, as did I, that as a full-service legacy carrier, United would go the other way and try to make its product better than its discount competitors.

How naive of us to believe any airline could compete on service.

But wait, there’s more! The oddsmakers are now saying that under a business-friendly Trump administration, the proposed $85.4 billion merger between AT&T and Time Warner is a slam dunk.

Will it be? Who knows?

But consumers ought to be worried. Neither of these companies has a reputation for stellar service. Take AT&T Mobility, which scores a 71 out of 100 in the American Customer Satisfaction Index, which is the average score for a wireless company. DirecTV, now owned by AT&T, received a 68 in the subscription TV category, two points above average. Time Warner, the media company which owns CNN, HBO, and Warner Bros. (not the cable company, which belongs to Charter Communications), isn’t rated in a comparable way.

I have more analysis in this story, but a lot has changed since I filed that report. The Democrats, who were favored to win the last presidential election, and would have probably been lukewarm to the merger, lost. And while this isn’t a political site, there are implications for consumers — and they go far beyond a single merger.

Will the incoming Trump administration stop any merger? Something tells me the answer is a hard “no.”

But then, with Sen. Jeff Sessions being tapped as attorney general, it’s clear that mergers will be the least of the Department of Justice’s problems.

By the way, it took a while for me to find that last link to the Sessions appointment that was neutral and somewhat objective. If you want to read some of the less flattering stories, just run a search for “Jeff Sessions” and “Department of Justice.” After reading some of the things they’re saying about this guy, you might be concerned about the future of the republic. But I digress.

So this Thanksgiving, while a handful of elites throw a party to usher in the return of unrestrained greed, American consumers might not have a reason to feel so thankful. Corporate America is bulldozing its way into our pocketbooks with anti-consumer policies and mergers that will almost certainly hurt service. And the next administration, if it’s true to its word, will stand by and nod approvingly.

Happy Thanksgiving.

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32 thoughts on “Consumers to businesses: Thanks for nothing!

  1. I am going to dispute the assertion that no one asked for or wants this United Basic Economy.

    Because if that were truly the case, no one, I repeat no one, would be flying the likes of Spirit. There is some segment of the population that is so price sensitive that the only thing that matters is the cheapest fares — amenities do not matter

    On United (and Delta), no one is forcing you to purchase these rock bottom fares, You can still purchase the fares with all of the perks currently in place (such as they are.) I think the big issue will be in the execution. Will these people who purchase such fares truly understand what they are purchasing? Will the gate agents be able to properly separate these class of passengers from standard fare passengers — since carry on luggage will not be allowed.

    If United thinks it can steal passengers from Spirit, Frontier, and so on, I suppose it is worth a try, Maybe such people will be assigned to middle seats in the back, leaving the ideal seats for those who paid regular fares. And maybe there will be room in the overhead for one’s luggage if you are in the later boarding groups. Or maybe this discussion will be moot since very view people purchased this type of fare. That would be ideal.

    1. United will segregate those in the Basic group to its own boarding group (group 5). Anyone in that group will not be allowed more than one personal item. Anyone who qualifies for the carryon (credit card holders, higher level frequent flyers etc. as detailed in the program announcement) will be in group 4 even with the Basic fare. Should work out OK as long as United begins enforcing carry on limits!

      But I do feel there’ll be lots of customers used to buying the lowest priced ticket who will continue to do so and then be completely surprised when they get to the airport and can’t drag their entire worldly possessions onto the plane with them. It will make for some late departures until the passengers realize United is serious about the restriction.

      1. Yes, it’s probably best to separate the “Basic” fare folks from everyone else. But I pity the poor gate agents who will be endlessly repeating, “No, you can’t sit together.” “No, you can’t take on carry-on your big purse AND your luggage.” “No, you can’t upgrade.” “No, you can’t board yet” Imagine saying NO all day long! YIKES!

          1. You’re right! This latest tactic will probably send the gate agents over the edge. Words will turn into fists.

      2. They will also need to enforce boarding groups. A lot of the time boarding groups move very fast or are further grouped together. There is going to need to be a distinct boarding segregation between group 4 and 5.

    2. This is all about screen bias. It gives United a chance to sell fares that will show up above Spirit and Frontier in search results, and then, like Spirit and Frontier, they can make up the difference in ancillary fees and penalties.

      No one forces travel agents to book the first flight that comes back from their GDS search. But once upon a time (back in the 1980s), airlines fought for regulations against GDS screen bias and they proved that travel agents were unduly influenced by the ordering of flight search results — which American Airlines (then owner of Sabre) could manipulate.

  2. ““Can you imagine the chaos such a fare is going to cause and how much time and energy United will waste?””

    Why should there be chaos? Delta’s had a similar fare for a while, and it seems to be going just fine.

    Depending on the length of the flight, this could be a really attractive option. For a flight of two hours or less, I really don’t care where I sit, and I often travel with just my briefcase, which fits easily under the seat in front of me. On a reasonably short flight, seat assignment, mileage earning, and a second carryon item are (in most cases) something I’d trade for $20, most of the time.

    1. It will be great for business travelers who are going to a meeting and back the same day. I often travel with just my laptop for those types of trips.

      It won’t for business travelers who are forced book the lowest possible fare on the route they are traveling by their corporate travel group no matter what. They will then be stuck in the cheap seats and forced to check a bag they could have just carried on with them meaning lost time at the airport checking and retrieving their bag.

      1. Even then, that’s not always the case. For instance, I’m “encouraged” to book business travel through the company system, which has a bunch of rules in place for fares that don’t require approval, etc. The system we use does not present the “basic” fares as an option because they’re too restrictive: a “regular” economy fare can be changed or canceled with a fee, whereas “basic economy” is firmly nonchangeable and nonrefundable. If something comes up and you can’t use the ticket, too bad. For business travel, that’s too risky because stuff comes up all the time.

        1. The system we use does not present the “basic” fares as an option

          How is that implemented? My understanding is that it is not generally possible to search the underlying GDS’s on the basis of fare restrictions. You might be able to achieve a particular type of filter by applying some kludgy assumptions — but those assumptions may not always hold true..

          1. You can certainly put rules into a system like concur that say “ignore fare code E”, for example.

          2. Sure, and that’s an example of what I meant by ‘kludgy assumptions.’ The airline won’t generally commit to following such a convention and isn’t likely to announce when they change things around.

          3. Delta has used E for Basic Economy since they launched it. No reason to think they wouldn’t want to be cooperative with the major corporate travel providers, since DL would prefer that people DIDN’T book Basic Economy, they only put it in place to compete with Spirit, et al for the totally price-motivated customer.

          4. I don’t know how it works, but as a user when I access and sign in to my company’s travel portal, I am only presented with a certain range of options. Whereas another colleague with a higher title gets a different set of options. I’m limited to economy on domestic segments, and economy plus on international segments, and we use one carrier, with negotiated fares. I can choose seats, but they are subject to being changed. I have to contact the airline to request a special meal. I don’t get a baggage allowance aside from a carry-on, though I could expense it if I wanted to.

    2. I travel internationally a lot, I live out of a carry-on (pilot case, and I’ve got to the point I do it well. I have colleagues who have a business travel pack (the Victorinox packs that fit a laptop), who this wouldn’t effect (but they stow those packs in the overhead). I doubt my company would go to basic economy, but admittedly it would be hard for me to go without a carry-on, Id have to make some significant concessions to what i pack.

  3. As for the T/TWX merger, the oddsmakers aren’t saying that the merger is anything like a slam dunk. The market’s implying a roughly 50% probability of approval. Trump has explicitly said that he thinks it’s a bad deal, and that he’d block it.

    1. Not according to press reports from Hollywood. Prior to election, the odds were about what you said. After, champagne corks were popping at AT&T, because they now felt confident it will go thru.

  4. Delta is contemplating adding the basic economy to international flights to compete with WOW and Norwegian. It has worked for them on domestic flights with few problems but imagine the problems on an international flight. They would need a separate cabin to keep the have-absolute nothings separate from those of us in regular peasant class.

    1. No they wouldn’t. Loyalty points, assigned seats, upgrades don’t effect the flight experience. A personal item holds your tablet, phone headphones, book and snacks just fine, most of the time your carry-on is just sitting in the overhead bin, The only real issue will come up with dining service. I already know a lot of PAX that skip the economy meals on domestic carriers, they would prefer to buy a box breakfast, lunch sandwich or salad alacarte rather than scheduled meal service. I do it myself all the time. 14 hour flight from LAX to NRT on a night flight. I eat in the airport before boarding, then buy a sandwich and some chips from Subway/Aupain for dinner, and a bottle of juice and croissant for breakfast in the morning. For breakfast I just ask for espresso, or an Americano, and if the airline charges for that, I’m fine with it

  5. “In this season of gratitude, American consumers are feeling left out in the cold.

    And with good reason.

    Businesses seem to be amping up customer-unfriendly policies. The latest corporate mega-merger is unfolding, and it’s likely to be green-lighted by an incoming administration that kneels at the altar of an unregulated free market.”

    So far, I as an American consumer, have not felt left out in the cold. That could change with the new administration, just as there definitely would be changes with the Clinton administration, had Hillary won. But, she didn’t and so we will just have to wait and see what comes. There is good and bad that comes with just about every administration change. No one always gets what he/she wants; not even me. No matter what a President does, there are those who are dissatisfied and those who are satisfied. It’s the same with businesses.

    I am taking the wait and see attitude. After all, the American people went to the polls and voted. Many seemed to be dissatisfied with what we had been getting from the present administration and felt it was time for a change. It’s done. If the majority does not like the results they see later on down the path, they can get out and vote for another change. That’s a democracy.

    1. Some companies “require” people to purchase the lowest available fare, which is one reason why they sell even though they shouldn’t. And no, I don’t work for one of those companies, but I know people who do. There are also other people who feel that they will be very uncomfortable anyway, so they take the seat. There needs to be some regulations as to seat size and personal area at least.

  6. Carriers don’t enforce the carryon rules for most paxs. Does one really think the gate agents are suddenly going to enforce this?

  7. Everyone asked for the United Basic fair, they did so when they push for cheaper fares. This is easy if the Basic fares are a bad business decision no one will buy them. It’s not like anything changes as far as the seat goes it’s just services and amenities. If the basic fare is unsellable than consumers will pay more to get the assigned seats, the carry on bag, and the upgrades and loyalty points. It will be a product without a customer. I predict that the fare is going to be very popular if it saves even a few dollars.

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