Revealed: What American Airlines Didn’t Tell You About Its New Basic Economy Fares

Last night JonNYC shared some details of new American Airlines Basic Economy fares, which follow the path laid down by Delta and doubled down on by United. I wrote about these changes American is planning to make to its cheapest fares.

And then this morning American put out a press release on the changes. But there’s more to it than what was in the press release.

I appreciate the honesty in their release — contra most of the press coverage about Basic Economy fares to date — “It’s not a new discount, but a new set of attributes for our lowest fares.” Basic Economy fares do not mean lower fares for customers, they are a way to get customers to spend more money for things they receive today when buying a ticket.

Last night I shared that Basic Economy fares — which will go on sale next month in 10 markets before rolling out later in the year more broadly — would mean:

  • Last boarding group with no full sized carry on allowed (“personal item only”) like with United
  • No changes at all to tickets. Use it or lose it, not only no residual credit for cancellations but also no same day changes or standby.
  • Seat assignments will only be available close-in. You’ll be able to purchase seats within 48 hours of travel, or get assigned leftover seats when you check in. Upgrades will not be permitted.

However like at United, elites and co-brand credit card holders will be able to board earlier based on status and be allowed to bring on a regular carry on bag. Remember that the credit card benefits include priority boarding. Making that benefit contingent on certain fares would be certain to create problems with the Consumer Financial Protection Bureau which regulates credit card marketing.

As for families traveling together, since the fares don’t allow pre-assignment of seats,

American’s reservations system will check for families traveling with children 13 and under a few days before the flight, and attempt to seat each child with an adult. This is the same process we follow for Main Cabin customers.

American shared that these fares will earn full redeemable miles and elite qualifying dollars, however they will earn only 50% elite qualifying miles and 50% elite qualifying segments. United in contrast offers redeemable miles on their basic economy fares but no elite qualifying credit whatsoever.

Sizing Your Carryon, Not Restricting You From the Overhead

One myth is that these fares do not allow customers to use the overhead bin. That’s not true, once onboard customers aren’t treated any differently based on buying a Basic Economy fare. American will be checking bag sizes before entering the jetbridge, not where customers put their bags on the plane.

An American spokesperson tells me “We plan to update the bag sizers to make allowable carry-on sizes clear.”

I understand the allowable size of a personal item will be 18″ x 14″ x 8″. This will potentially have implications beyond Basic Economy customers, as anyone’s personal item can be checked by a gate agent against the permitted size.

Your Boarding Passes Will Have a ‘Scarlet B’

American also told me that boarding passes will identify basic economy customers. So even if you board early, a gate agent may notice your ‘Scarlet B’.

We’ll be providing multiple, clear disclosures throughout the travel process, and the boarding pass is one place we expect to use to accomplish this.

Will American Be Ready for the Launch of Basic Economy?

I’ve heard that the IT for all of these changes may not be 100% on day one for travel on Basic Economy fares. Specifically, the functionality to exempt elites frequent flyers and cobrand credit card holders from the ban on full sized carry ons may not be implemented and as a result the no carry on Scarlet B may print on boarding passes and require an agent to manually remove.

American hasn’t commented on this specifically, and I’m hopeful that they get everything working properly or delay launch until they do.

Where Basic Economy Customers May Be Worst Off is When Things Go Wrong

The biggest downside to these fares though appears to be something that hasn’t been shared with press. I asked American this morning to confirm and they haven’t responded (I’ll update if they do) but I’ve been told that non-elite Basic Economy customers will be at the bottom of the list for re-accommodation in the event of irregular operations.

Here’s how it seems like it would work if a flight cancels for someone (who is not an elite frequent flyer) on a Basic Economy fare:

  • If flights cancel — whether due to weather, mechanical, crew availability, or otherwise — customers will only be re-accommodated onto American Airlines flights (no interlining onto another airline) and will only be re-accommodated into Basic Economy inventory.

    It’s possible this merely means that it will be necessary to open ‘B’ class in order to reaccommodate a Basic Economy customer (making the reaccommodation process cumbersome). But it also may mean that a flight could have seats for sale, but not Basic Economy (‘B’) inventory, and so passengers won’t be given the seat that’s available even if the cancellation of their original flight was American’s fault!

  • When American runs its automated system to re-accommodate passengers, Basic Economy customers will be re-assigned last.

    Update: American has now confirmed to me that basic economy customers will not be re-accommodated on other airlines, and will be at the bottom of the list for automatic re-accommodation as well. However basic economy “B” inventory will not need to be available in order to be moved onto another flight.

American promises to make it clear to customers what they’re buying with basic economy fares (since they want to upsell customers, after all). Will they say, “we’re going to do as little as possible to even get you to your destination if we cancel your flight — and by the way our operational reliability hasn’t been very good so you’d better not buy these fares?” (Bureau of Transportation Statistics data shows a higher percentage of flight delays and cancellations than United Airlines for January through November 2016.)

Should You Just Fly Delta?

As I wrote when United announced their Basic Economy plans, if you’re buying the cheapest domestic fares, fly Delta.

Delta’s Basic Economy fares still allow full sized carry on bags. And Delta has a better airline operation — far fewer flight cancellations, and more on-time flights. At Basic Economy prices you shouldn’t be making your decision whom to fly based on a loyalty program anyway.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. “When American runs its automated system to re-accommodate passengers, Basic Economy customers will be re-assigned last.”

    That seems reasonable, they need to process non-elites (and each elite tier) in some order. From what I understand, the current system uses check in time as the tiebreak, but doing the lowest fare class at the bottom makes sense.

    I find it hard to believe that if there are pax displaced by irrops, that AA would let flights go out with empty seats instead of re-accommodating. My assumption until proven otherwise is that they will open B inventory, as opposed to the current system that often re-books into Y, to ensure that the B passengers will still board last and without carry-on on their new flight. [Though moving them into a different class might be a more humane way to apologize for the irrops].

  2. Great point about IRROPs Gary! Haven’t seen any discussion of this before. The legacy carriers are really opening a can of worms this year! Although I guess DL has experience.

    I would assume BE pax will be below all other revenue pax (including awards) on the SBY list but above NRSA. Can you confirm?

  3. Some things as interpreted make business sense. But, overall, consumers continue to be squeezed. And often from industries and specific companies saved by the taxpayer. Capitalism at its finest.

  4. The personal item size constraint could get hairy. Go to eBags and try to find a backpack that is under those dimensions. Tons of bags carried as personal items today are technically oversized, but fit fine under seats and are not checked by any agents because all eyes are on rolling carry-ons.

  5. Has American lost their way? What I hate is stress yet every Air Line is creating more of it! I used to like American because I could pick my seat before buying the ticket where as Southwest forces you to hate your co-passengers in a king of the hill fight for good seat opertunitis something I hate however if American is doing away with with reserved seats than Southwest is back in the game……

  6. While current trend of airlines to “differentiate” the customers, the unexpected result will be in degrading the company image. When AA would start treating the customers the same way Spirit does, the result will be in acquiring an image of a Spirit. You simply should not open a Dollar Store in a corner of your Saks Fifth Avenue. AA is already treating customers like S$#@& and their re- accommodation policy for basic economy is just another example.
    Anyway, on my recent DFW->HKG flight a flight attendant in J told me that she was shocked the transformation within AA. She always flies International but was serving Y on a recent domestic flight. She was shocked to learn that per new AA rules FA is not allowed to give a full can of soda to a regular passenger in coach because of the need to save money…

  7. The scarlet B combined with the (last boarding) walk of shame. All American needs to do to make the experience complete would be to play a boo-and-jeer sound track on the plane during Basic Economy boarding.

    The no re-accommodation on other airlines policy harks back to Titanic steerage class, as in “I’m sorry, there are no more life boats left. Please stay here with the ship and everything will resolve itself shortly. Thank you.”

  8. Is this the beginning of the end for AA? Like I said I loved AA as well as some other air lines over Southwest because I could pick the seat I wanted at a competitive price at the time of accepting and therefore purchasing their fare. This is or was the edge AA had over Southwest Airlines. Flying is stressful enough fighting for a desired seat makes it worst. Also with this new economy fare that is non refundable and you cant select a seat till the last minute means all the desirable seat will most likely been purchased leaving only or at least mainly the “”dreaded” seats and only able to board last solidifys that. No refund is a guarantee for customer dissatisfaction!! Who in their right mind came up with this. Certainly this is not a good business model. At least not today in the USA.

  9. Sounds like a way to make a few bucks while tarnishing the brand.

    The goal is to pretend your price is lower so you can trick less-than-regular flyers into booking AA and then sucker punching them with fees. It won’t affect elites much but casual flyers will hate the big 3 even more for pulling this trick.

    Look how hard they fight against the most basic of consumer protection – truth in pricing. This is the length that they are willing to go to be allowed to effectively lie about a fare price.

    Thankfully, Google Flights will sort this out. I would guess that the very same day this kicks in, Google Flights will put a big red flag next to misleading BE fares indicating a misleading deal.

  10. Delta, umm no. Just fly Southwest, where you always get EQM and RDM, you always get free checked bags and you can always purchase priority boarding no matter what fare you pay. Or fly Alaska/Virgin which include these perks in all tickets.
    There is no reason to accept worthless Skypesos unless you live at a DL hub.

  11. Maybe US air carriers need a huge wake up to value their customers now. How about repealing the cabotage clause preventing foreign carriers from owning >25% of US airlines, and allowing foreign carriers to increase operations here. What about LAX – JFK passenger rights before departing to FRA, DXB,AUH, etc. Maybe Doug and Oscar & Ed might feel the heat and the need to change their approach. Ask an AA EXP how easy it is to use mile saver business awards, or when their FC upgrades clear? Certainly not at 100 hours before flight as it was 1.5 years ago.

  12. Can anyone recommend a decent piece of carry-on luggage that’s 18 x 14 x 8?

    Last year I searched for days & finally found a Lipault 18″ soft-top wheeled carry-on that almost met the requirement imposed by Transavia Paris => Venice. At Orly, bags were not measured so people slipped through with larger items. (Being France, that was a bit of a drag onboard though

  13. Gary, please confirm – will there be a new booking code of “B”? I thought that was a full-fare economy booking code. I thought I heard on the FB EXP page it would be “O” which is already a discounted economy booking code. Can you please confirm?

  14. What am I missing?

    Basic Economy was developed in order to compete with the likes of Spirit/Allegiant/Frontier.

    Now we have amenities that are on par with the discount airlines but we continue to pay legacy prices.

    Gimme a break

  15. Problem solved. Allow Emirates, Qatar and the top Asian carriers like Singapore, ANA, EVA, and Cathay Pacific to serve domestic routes in the U.S. Then the three big U.S. cattle car carriers will either clean up their act and once again become a reasonable choice for air travel or quickly watch their money centric empires vaporize before their eyes.

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