America’s airlines are introducing a class below economy

AS THE candidates in America’s presidential race pontificate on the growing divide between the haves and the have-nots, the country’s airlines are busy segmenting customers between the haves, the have-lesses, the have-somewhats, the have-nots and, now, the have-nothing-at-alls.

Airlines have long seen profitability in investing heavily in first- and business-class while degrading the flying experience in coach to cut costs. But why stop there? Coach, they have discovered, can itself be subdivided, and then subdivided again. First there was the creation of premium economy, which charges passengers extra for what used to be a standard amount of legroom, and for the exit-row seats that were previously the dominion of in-the-know flyers. Now there is a new class, a cut below standard economy. Please welcome “basic economy”, known to some as “last class”.

Delta was the first big airline to introduce basic economy, and it refined it last year as one of its five fare classes. Now United and American have both announced that they will be debuting their versions of basic economy later this year.

So what is basic economy? For frugal travellers, it’s shorthand for giving up some of the few remaining comforts of flying economy. The biggest sacrifice is losing the ability to reserve a seat when booking a flight (so be prepared for a middle seat in the back row). If you are traveling with family or colleagues, forget about sitting together. Passengers flying basic economy also forfeit their right to upgrade their seats and to change or cancel their reservations more than 24 hours after booking.

From the airlines’ perspective, last class is an effort to compete with the profitability of no-frills competitors such as Spirit and Frontier. Airlines can cut costs by limiting the things to which passengers are entitled. Eliminating upgrades and standby flying for certain passengers reduces administrative overheads. And forcing some passengers into the seats no one else wants could reduce the risk that they will remain vacant.

But some people suspect a more nefarious motive: Delta and its rivals are making basic economy so unpleasant that people will pay extra to “upgrade” to standard economy. Indeed, when you try to book a reservation on Delta’s basic economy, a screen pops up warning you of all the downsides and requiring you to check a box stating “I agree to the restrictions” before you can proceed.

Press coverage of the new fare class hasn’t been kind. Time called it “worse than any low-fare carrier option”. Forbes warned that passengers “may soon be crying foul”. A writer for the Star Tribune of Minneapolis complained, “I felt more like I was being made to pay for the privilege of selecting a seat than being offered a way to save.”

But passengers bemoaning this latest indignity have only themselves to blame. Why are the legacy airlines all emulating the likes of Spirit and Frontier, which have high rates of passenger dissatisfaction and complaints? Because those budget airlines are doing extremely well. Travellers have signalled that they are willing to suffer all sorts of discomforts and inconveniences for the sake of a lower fare. America’s big airlines are simply giving them what they wished for.

culled from The Economist