American Airlines Adds New Basic Economy Perk
Jennifer Billock August 28, 2018
American Airlines is adding a new perk to its basic economy fares – the ability for passengers to bring a carry-on bag for free. But it’s not for the reason you think; the airline isn’t doing it for the benefit of passengers, but rather to help themselves with upsell rates that will increase their profits.
Basic economy travelers on American Airlines, rejoice! The company just added a new perk: the ability to bring on a carry-on bag for free. This new offering allows American to compete more with the basic economy fare leader, Delta Air Lines.
But before you praise the airline for adding the perk, you should understand the reasoning behind it. It’s not to make customers happier. In fact, it’s to drive more profits to the airline through upsells. American wants passengers to see the basic economy fare and then realize that they can get more perks by upgrading to the regular economy fare.
“[We need to] make our short-haul Basic Economy fares more competitive with airlines that include a carry-on bag in their lowest fares,” Kurt Stache, American’s senior vice president of marketing, loyalty and sales told Inc. “There are other features of that product that we think will continue to provide us sell-up rates. We think it will be in the 50 percent range.”
American is already profiting more from upsells than last year, a rise of 60 percent. But the airline doesn’t plan to slow down.
“When customers are offered a basic economy fare and also see the main cabin product, 50 percent are buying up from that offering,” Stache told Inc.
[Photo: Shutterstock]
How much do I have to pay over Basic Economy to have access to the loos ?
“When customers are offered a basic economy fare and also see the main cabin product, 50 percent are buying up from that offering,” Stache told Inc. Understood, but giving them overhead luggage, lessens the chance they will buy up from the basic fare
The difference between Basic Economy and Main Cabin can be huge sometimes. I've seen as much as $300 difference on a one way fare and more on a roundtrip. For a customer not concerned about elite perks, the savings only removes a few "perks" that can be worth the loss: 1.) no seat selection. Airline automatically assigns upon check in and this cannot be changed until you get to the gate and ask to move, if space available. 2.) no changes. it's a use it or lose it deal. 3.) last boarding group so there may not even be room in the overhead, but they will then allow you to gate check for no extra charge For elites, it's a question of if that extra money for Main Cabin is worth the ability to choose a seat, upgrade to First class and earn full elite qualifying mileage/segment credit versus the 1/2 earned on a Basic Economy fare.