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United's Basic Economy - Discussion, Q&A, ... {Archive}

Old Feb 9, 2019, 5:12 pm
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This is an archive thread -- the active thread is United's Basic Economy - Discussion, Q&A, ...

Important Note: these fares became available 21 Feb 2017 for MSP for travel beginning 18 Apr 2017. More markets were added 19 April 2017 for travel starting 9 May 2017.

Related thread: Basic Economy Airport and Plane Experiences (First or Second Hand)

If you booked before the dates above, you did not have a BE fare. If purchased on united.com you will see a warning like:


4. MileagePlus members will earn full Premier qualifying dollars, 50% Premier qualifying miles and 0.5 Premier qualifying segments for each flight, as well as lifetime miles and toward the four-segment minimum.



Link to UA's description of how these fares will work: Basic Economy.

Here are the key facts:
  • No seat assignments until check-in. Seats will be assigned by the system and cannot be changed.
    *NEW* When purchasing a Basic Economy ticket, you will not receive a complimentary seat assignment but may be able to purchase advance seat assignments during booking and up until check-in opens. If you dont purchase an advance seat assignment, your seat will be automatically assigned to you prior to boarding, and you won't be able to change your seat once it's been assigned.
  • No guarantee of adjacent seats with companions
  • No voluntary ticket changes after 24 hour purchase period
  • Carry on limited to 1 personal item unless the customer is a MP Premier member, primary cardmember of a qualifying MileagePlus credit card, or Star Alliance *G
  • Customers ineligible for carry-on who bring one to the gate will be charged a $25 convenience fee to gate-check in addition to standard baggage fees (source: @united twitter)
  • Customers will not be eligible for Economy Plus or premium cabin upgrades. This includes all forms of upgrades (CPU,supported or purchased). Likewise for E+ access (elite or purchased).
  • Customers will board in the last boarding group (currently Group 5) unless the customer is a MP Premier member, primary cardmember of a qualifying MileagePlus credit card, or Star Alliance *G
  • Companions on same PNR will have same boarding group and carryon if one on the PNR has a waiver
  • No combinability with regular economy fares or partner carriers. Interline travel is not permitted.
  • Tickets will earn RDMs (based on fare and status), PQMs (50% of distance), PQSs (0.5), PQDs, in addition it will count for minimum 4 segment and lifetime miles (New as of Dec 2018)
  • Basic Economy tickets will use booking code 'N'
  • Online check-in only with paid checked bag, otherwise need to see a United representative to verify the onboard bag allowance and receive a boarding pass.
In air, passengers will receive the same standard economy inflight amenities including United Economy dining options, inflight entertainment, United Wi-Fi (availability depending on the flight)

related threads
New UA/*A TATL -LGT Economy fare - no free first bag, no changes/upgrades allowed

Benefit impact of restricted economy fares on UA Elites (Basic Econ, -LGT, Light Econ

Pre-announcement speculation thread (now closed) New "Budget Economy" fares
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United's Basic Economy - Discussion, Q&A, ... {Archive}

Old Aug 18, 2017, 11:02 am
  #2491  
 
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Can I ask a question as to why everyone assumes that people that book a BE fare shouldn't be able to sit together? Let me outline a scenario I see all the time when I book flights.

When I booked a flight a few weeks out there is typically NO E- seats open. If I didn't have status, and all things being equal (I didn't need baggage, etc) why would I pay $20 extra to get a regular economy fare? It wouldn't get me a seat either.

That's what I don't understand in this whole discussion about people buying BE. Everyone assumes that the person buying BE has actually forgone the option to pick two seats together for them and their (lets say) young child. When this may not have actually been an option.
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Old Aug 18, 2017, 11:17 am
  #2492  
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Originally Posted by jsloan
If this analysis were true, ULCCs would go out of business immediately. Their entire business strategy is to entice people with low fares and then make their money on ancillary revenue. People are simply more willing to spend $100 twice than $200 once. Study after study has proven it, and the fact that the ULCCs are still in business confirms it.

Just because you're not seeing E+ full on your flights doesn't mean it's not full on others. It also doesn't mean that the customers currently seated in E- aren't going to be willing to do a last-minute buy-up when they realize how lousy their seat will be -- perhaps even a TOD all the way to F.
I'm both a frequent flyer and a long-time airline investor (a better profession than many might think), and I'm both fascinated and troubled by what UA is doing with basic economy. When the idea was launched, I assumed it would only be utilized in nonstop markets that competed against the ultra low cost carriers like Spirit and Frontier. Frankly, from a business perspective, I thought it was brilliant. It solves the major airline's problem of what to do when a ULLC offers a lowball fare in a major airline's hub market. Previously, the major airline had to cede this business to the ULLC, or "match" the ULLC fare -- even if that was a money losing proposition (especially since the major airline had no way to collect the ancillary revenue that the ULLC would likely receive -- for instance, with a carry-on baggage fee).

As a frequent flyer, I loved when airlines like UA would match a ridiculous Spirit fare and give me great service. I've even been upgraded on $49 fares. But for UA, that's a stone cold money losing proposition. Basic economy solves this problem for the airline.

But offering BE systemwide in markets without ULLC competition is a entirely different animal. It basically means UA is offering a "come on" fare: a lower price for a product that you don't really want to buy and the airline doesn't really want to sell you. They're clearly hoping to get your attention and have you buy up. But offering these fares is certain to annoy your best customers, and exposes UA to the risk that its competitors will match UA's fares but include the "normal" services. In that case, almost nobody is going to pick UA for that flight. Of course, it's also possible that the other airlines will offer a fare somewhere between UA's basic economy and it's regular fare, which might also be a problem for UA.

In other words, it's difficult to predict how this pricing structure will play out. It may be another huge win for UA, especially if DL and AA also go systemwide with it. It will basically be a hidden fee; kind of like a resort fee. It may also be a significant failure, especially if DL and AA do not adopt this pricing strategy. Only time will tell.

I also think BE helps Southwest because they are the only airline that keeps pricing (including frequent flyer miles) simple. Most people aren't sophisticated enough, or willing to spend enough time, to figure out all these fare and loyalty rules. You don't have to be a committed rocket scientist to fly WN. Increasingly, you do have to be a rocket scientist to get a good deal giving your business to the major airlines. Perhaps they benefit from the complexity; but for the individual traveler, especially the novice ones, the complexity is a royal PITA.

Last edited by iahphx; Aug 18, 2017 at 11:25 am Reason: more
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Old Aug 18, 2017, 12:31 pm
  #2493  
 
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Originally Posted by iahphx
but for the individual traveler, especially the novice ones, the complexity is a royal PITA.
Right. And United took what was a complex PITA system and added BE to it to make it that much more complex. Flying had already become an uncomfortable, annoying, pressure-cooker experience and now the airlines are trying to make it worse with BE. So the airlines are trying to get you to "buy up" to regular economy which is the level that was the uncomfortable, annoying, pressure-cooker experience they were already selling. Makes the head spin.
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Old Aug 18, 2017, 1:23 pm
  #2494  
 
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Originally Posted by jsloan
Fine, but in the real world, people will book away, and UA absolutely must replace those passengers with incremental revenue elsewhere. If your statement is, "all things being equal, higher prices generate more revenue," that's fine -- but all things are not equal.
Of course UA will see a loss of demand if their prices are raised in a competitive environment. It's economics 101. But that's not what was being analyzed.

Originally Posted by jsloan
If this analysis were true, ULCCs would go out of business immediately. Their entire business strategy is to entice people with low fares and then make their money on ancillary revenue. People are simply more willing to spend $100 twice than $200 once. Study after study has proven it, and the fact that the ULCCs are still in business confirms it.

Just because you're not seeing E+ full on your flights doesn't mean it's not full on others. It also doesn't mean that the customers currently seated in E- aren't going to be willing to do a last-minute buy-up when they realize how lousy their seat will be -- perhaps even a TOD all the way to F.
You're selling the consumer short. Your analysis means that the ULCCs are depending on people being unwise and not calculating the entire perceived value. ULCCs are advancing because of low costs, not a revenue advantage because consumers are generally unwise (they actually run at a revenue disadvantage).

Ask any UA traveler. If the plane isn't 100% full, which cabin is most likely to have empty seats? It's not based on my observations. It's based on the aggregate observations, and it's backed up by UA's own actions (shrinking E+ cabins). Again, the same customers trying to save a few bucks with BE will be the least likely to upgrade to E+ or even all the way to F.

Originally Posted by spin88
I say again, I have yet to ever run into a BE fare on DL, even for family trips. I know it is out there, I just don't run into it.
Really? How you can you NOT run into an E fare, especially with family trips? If true, that tells us you are in a very rare situation. And if you never have to deal with DL's E fare, then clearly your opinions are susceptible to selection bias against UA and for DL.

Originally Posted by zeer0
Here's the thing, it's very very rarely $10 or even $20 RT. Far more often it's $40 on flights under ~$300 and $80 on flights more than that. You're looking at an upsell of up to 40% on short distance flights, and that's beyond just superly price sensitive customers not buying up or saying no to UA all together.
The buy-up prices I used were one-way.
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Old Aug 18, 2017, 1:40 pm
  #2495  
 
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Originally Posted by iahphx
I'm both a frequent flyer and a long-time airline investor (a better profession than many might think) ....
But offering BE systemwide in markets without ULLC competition is a entirely different animal. It basically means UA is offering a "come on" fare: a lower price for a product that you don't really want to buy and the airline doesn't really want to sell you. They're clearly hoping to get your attention and have you buy up. But offering these fares is certain to annoy your best customers, and exposes UA to the risk that its competitors will match UA's fares but include the "normal" services. In that case, almost nobody is going to pick UA for that flight. Of course, it's also possible that the other airlines will offer a fare somewhere between UA's basic economy and it's regular fare, which might also be a problem for UA.

In other words, it's difficult to predict how this pricing structure will play out. It may be another huge win for UA, especially if DL and AA also go systemwide with it. It will basically be a hidden fee; kind of like a resort fee. It may also be a significant failure, especially if DL and AA do not adopt this pricing strategy. Only time will tell.

I also think BE helps Southwest because they are the only airline that keeps pricing (including frequent flyer miles) simple. Most people aren't sophisticated enough, or willing to spend enough time, to figure out all these fare and loyalty rules. You don't have to be a committed rocket scientist to fly WN. Increasingly, you do have to be a rocket scientist to get a good deal giving your business to the major airlines. Perhaps they benefit from the complexity; but for the individual traveler, especially the novice ones, the complexity is a royal PITA.
I am also a (now former) airline investor, and have always made my investment decissions based upon what I think changes at airline would do in the mid-term to drive away valuable traffic. This caused me to invest heavily in DAL ye2012 and in VX shortly after the IPO. In essence shorting the current anti-consumer version of UAL has been very lucrative...

I have viewed UA's version of BE through this same lense, and I called the book away UA has now admitted a long time ago: http://www.flyertalk.com/forum/28349801-post1656.html

I agree that UA's what I would call "extreme" version of BE (on all fares, all flights, no status credit, no carry on) was predicated on other airlines following United. But I also think that it was utterly foolish, infact incomprehensibly foolish, of UA's management to think that OALs would follow. Other airlines have management that do not think that Hunter Keay speaks from on high.

Delta already had a successful version of BE, and directly competes with certain carriers (e.g. AS, WN) that are not going to adopt BE. Why would Delta follow United? Better to sit back and steal elite traffic from United as they have been doing every time United does something stupid going back to 2012.

Then the gig should have been up when AA rolled out BE very slowly, and only applied it to the three lowest fares, and then gave 1/2 status credit. AA was between DL and UA in its use of BE. AA is clearly going to just let UA hang itself.

And while UA has clearly backed off BE a lot (no longer on higher fares) the inability of UA's management to break free from the short sided thinking of the Hunter Keays of the world, and realize that they are actually in a consumer service business, and that they can't as the third largest US airlines set the conditions for the market, is just mind boggling.

UA's version of BE was a big failure, the question is how much longer UA keeps bleeding itself before it tosses in the towel and changes its BE to be more like DL's (or AA's) version.
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Old Aug 18, 2017, 1:56 pm
  #2496  
 
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Originally Posted by jsloan
I'm a bit surprised that the PHX-NRT through fare was that much more expensive than the LAX-NRT fare.
The fare difference was over $ 400.00 each way on the RT, but more important the GPU was waitlisted only on both legs. Booking ex LAX cleared upon booking. Same on the return, NRT-LAX upon booking, waitlisted NRT-LAX-PHX.
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Old Aug 18, 2017, 2:01 pm
  #2497  
 
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Originally Posted by spin88
I am also a (now former) airline investor, and have always made my investment decissions based upon what I think changes at airline would do in the mid-term to drive away valuable traffic. This caused me to invest heavily in DAL ye2012 and in VX shortly after the IPO. In essence shorting the current anti-consumer version of UAL has been very lucrative...

I have viewed UA's version of BE through this same lense, and I called the book away UA has now admitted a long time ago: http://www.flyertalk.com/forum/28349801-post1656.html

I agree that UA's what I would call "extreme" version of BE (on all fares, all flights, no status credit, no carry on) was predicated on other airlines following United. But I also think that it was utterly foolish, infact incomprehensibly foolish, of UA's management to think that OALs would follow. Other airlines have management that do not think that Hunter Keay speaks from on high.

Delta already had a successful version of BE, and directly competes with certain carriers (e.g. AS, WN) that are not going to adopt BE. Why would Delta follow United? Better to sit back and steal elite traffic from United as they have been doing every time United does something stupid going back to 2012.

Then the gig should have been up when AA rolled out BE very slowly, and only applied it to the three lowest fares, and then gave 1/2 status credit. AA was between DL and UA in its use of BE. AA is clearly going to just let UA hang itself.

And while UA has clearly backed off BE a lot (no longer on higher fares) the inability of UA's management to break free from the short sided thinking of the Hunter Keays of the world, and realize that they are actually in a consumer service business, and that they can't as the third largest US airlines set the conditions for the market, is just mind boggling.

UA's version of BE was a big failure, the question is how much longer UA keeps bleeding itself before it tosses in the towel and changes its BE to be more like DL's (or AA's) version.
There clearly is a strong viewpoint opposing United's BE fares that's being advanced in various Internet forums and the press. Clearly, BE does not work for everyone and there are certain competitive routes where customers interested in low fares and full service could best be served by other airlines.

The problem is that there's no proof of book away - traffic is up. The attempt to conjure sell-side analysts as an instigator is also old. I am sure you understand the concept of Chinese walls and the responsibilities outside professionals have in discussing confidential information with competitors. Perhaps the discussion can focus on the merits of the argument, rather than creating scapegoats.
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Old Aug 18, 2017, 2:05 pm
  #2498  
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Originally Posted by Exleftseat
The fare difference was over $ 400.00 each way on the RT, but more important the GPU was waitlisted only on both legs. Booking ex LAX cleared upon booking. Same on the return, NRT-LAX upon booking, waitlisted NRT-LAX-PHX.
Not surprised. LAX-TYO is a highly competitive market, with JL, SQ, AA, and DL competing against UA and NH. It's almost always cheaper than SFO-TYO, where the only competition is a single JL flight.

Note that if you had booked PHX-NRT, the upgrade would have cleared on LAX-NRT and waitlisted just for the PHX-LAX segment.
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Old Aug 18, 2017, 2:09 pm
  #2499  
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Originally Posted by TomMM
This morning in the TSA line standing behind a guy that asked "What does no carry on baggage mean?" I replied "Basic Economy fare. If they won't allow your carry on it will cost $25.". "Hmmm I didn't know that. I can handle the $25".
It's $50 at the gate, $25 for the bag and $25 fee for doing it at the gate instead of at the checkin counter.
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Old Aug 18, 2017, 2:29 pm
  #2500  
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Originally Posted by minnyfly
You're selling the consumer short. Your analysis means that the ULCCs are depending on people being unwise and not calculating the entire perceived value. ULCCs are advancing because of low costs, not a revenue advantage because consumers are generally unwise (they actually run at a revenue disadvantage).
You're giving the consumer too much credit. ("Nobody ever went broke underestimating the intelligence of the American public"). The ULCCs acknowledge as much:

https://www.fastcompany.com/1325762/...itable-airline

The advantage of this pricing structure is psychological. We collect $110 from you at the end of your trip, Gallagher says. If I tried to charge you $110 up front, you wouldnt pay it. But if I sell you a $75 ticket and you self-select the rest, you will.
Originally Posted by minnyfly
Again, the same customers trying to save a few bucks with BE will be the least likely to upgrade to E+ or even all the way to F.
You have invented "the same customers trying to save a few bucks with BE." It's emphatically not a "few" bucks -- percentage-wise, it's a huge surcharge in many cases. And very, very few people were doing anything except selecting the lowest fare available at booking. Unless there's a specific advantage to be gained, why? I've never met anybody who buys a non-refundable Q fare when a G is available because they're opposed to paying so little for airfare.

If UA doesn't want customers at $49 fares, don't offer $49 fares. Offering a $49 product that is a negative, stressful experience, and then offering to alleviate the stress for $89 instead is offensive and cheapens their brand. Just offer the fare at $89 and see who's interested. I don't care what G4's prices are, because I never intend to fly them.

If you believe that a seat assignment is worth $40 one way, that's your business, and UA will love you. I get E+ and a decent upgrade percentage, and I'm still not certain it's worth $40 one way. UA's saving graces are (a) I don't have elite status with other airlines, (b) I have no intention of meeting DL's Diamond spend requirement, and (c) AA and AS are weak in the areas I fly.
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Old Aug 18, 2017, 2:43 pm
  #2501  
 
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Originally Posted by fly18725

The problem is that there's no proof of book away - traffic is up. The attempt to conjure sell-side analysts as an instigator is also old.
As you well know UA's President, Scott Kirby said this on the 2Q 2017 call:

" [Kirby]: we get benefits from selling up more customers, but Im sure we lose some share as a result of that as well.

Jamie Baker: but Im curious what the basic economy RASM contribution is as it relates to the third quarter guide for flat domestic RASM. We were assure the basic economy was going to be immediately accretive, at least I think thats what you said. So Im wondering if that has proven to be the case, it would suggest that absent basic economy, your domestic RASM would actually be going down and Im not sure that I understand what that would be?

Scott Kirby

So, on basic economy, I do expect it will be RASM accretive and immediately RASM accretive with its competitive product. And we said that exactly in the past, but that would have been the underlying assumption that it was going to be competitive and expected our competitors to get the full workout, but currently, they have taken longer. I still think theyre going to get there, but in the near term, you know, the upside that we get from upsell is offset, its impossible for us to make sure, but Im sure its offset to a larger, maybe a complete degree by share shift. And so if weve been through any of the forecast, its probably what our competitors are going to do. We dont know that. We cant control that. And well get bigger benefits once we roll that everywhere."

If you are accusing Scott Kirby of lying to investors, nock yourself out, but Kirby has clearly, and not just on this call, but in other forums, confirmed the book away due to BE, resulting in a loss of market share.

How much is there? No idea, and Kirby is pretending not to know. But if BE was working swimmingly for UA (since after all it is a fare increase) they would not be backing off it.

Other than being SFO based and basically 2MM, and as such wanting UA to become a better airline, I don't have a dog in this fight. I've not paid BE (I just booked OALs, which are IMHO better, when UAL provided a BE fare). That UA's version of BE has not worked out so well ought to be evident to basically everyone, except the rather dense "analysts" whose anti-consumer plans have driven United to become the laggard of the airline industry.
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Old Aug 18, 2017, 4:52 pm
  #2502  
 
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Originally Posted by minnyfly
The buy-up prices I used were one-way.
Most people fly roundtrip. A 40% upcharge is huge, often the difference between a non refundable vs refundable fare. It just doesn't make sense.
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Old Aug 18, 2017, 4:57 pm
  #2503  
 
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Originally Posted by zeer0
Most people fly roundtrip. A 40% upcharge is huge, often the difference between a non refundable vs refundable fare. It just doesn't make sense.
My son-in-law is doing the PHX-LAX r/t and saving $ 80.00 for a party of two. It's only a 45 minute ride on a RJ 700, nothing to lose sleep over. Having the option makes no sense to even consider regular Economy. Still, thinking that this was the regular fare in days past leaves one with a bitter taste.
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Old Aug 18, 2017, 6:47 pm
  #2504  
 
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Originally Posted by Exleftseat
My son-in-law is doing the PHX-LAX r/t and saving $ 80.00 for a party of two. It's only a 45 minute ride on a RJ 700, nothing to lose sleep over. Having the option makes no sense to even consider regular Economy. Still, thinking that this was the regular fare in days past leaves one with a bitter taste.
That's my point. Exactly what I bought recently. But it shouldn't be a $40 difference pp on a ~$100 fare. It leaves a bitter taste.
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Old Aug 18, 2017, 7:01 pm
  #2505  
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Originally Posted by zeer0
That's my point. Exactly what I bought recently. But it shouldn't be a $40 difference pp on a ~$100 fare. It leaves a bitter taste.
Just some fact checking
Most days the lowest PHX-LAX it is $30 delta with BE $163 and lowest non-BE $193 (K fare), so 40% is a bit high -- closer to 18%. Not insignificant
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