American Airlines Basic Economy fares are highly restrictive. The purpose of these fares is to make the travel experience worse, in hopes that you will spend more money to avoid them. However they need to balance that with the risk that you will just give up on them and choose to fly someone else instead.
American Airlines President Robert Isom, speaking at the Cowen and Company Global Transportation Conference, admits that “the premise of basic economy, it wasn’t a price cut…[but] an upsell.”
American was always honest about this, while United Airlines touted the falsehood that Basic Economy was a new lower fare even though fares didn’t go down they just added restrictions like no advance seat assignments, no changes, and no full-sized carry on bags.
American Airlines Economy
Basic Economy customers board last, and customers in that boarding group weren’t allowed to bring more than a personal item on board. Of course elite frequent flyers and co-brand credit card customers got their preferred boarding and avoided this restriction.
And now the restriction has been eliminated because Delta never imposed this restriction on customers and so customers could get a better value at the same price elsewhere (as they also can flying Southwest) and increasingly the world will see easier comparison of total travel costs from online search engines like Google.
This is essentially what happened to United when they launched their basic economy restrictions before American. They lost about $100 million instead of generating more revenue because customers did better flying Delta, American, and Southwest. Their bet was that since they knew American would follow (United President Scott Kirby developed the restrictions when he was President of American) the competition would become worse for customers too and passengers would have fewer choices.
As of today United Airlines is the only major US airline prohibiting customers on their cheapest fare types from bringing a full sized carry on bag onto the plane. That means they’re uncompetitive — and in a way that they’ve admitted in the past cost them a nine figure loss over a period of months.