emcampbe

And picking a single route (on a single or even few dates) to make assumptions in general also doesn't often work.

Take a flight I just booked - a July long weekend trip CVG-SFO. Three airlines fly nonstop on this route (well, once UA starts next month) - DL, F9 and UA - all once per day. On the days I want, UA isn't offering a BE fare, and is pricing at $400 round-trip for a T fare. F9 is at $328, but once you start adding stuff, its more than UA (regular seat is $12-24 each way, a carry on or checked bag is $35 each, each way, or a whole package of stuff is $81 each way). DL has an E fare on the route of $501 Round-trip, or $531 cheapest in main cabin. Plus the day I'm coming back DL doesn't have a nonstop, so in this case, DL charges significantly more for a basic fare than any of the nonstop competition (including UA regular fare), and is only nonstop 1 way. IMO, it would be really stupid to book DL (unless, perhaps, the timing of their morning westbound nonstop is more ideal for you, but that's a $100 premium to get that at a basic fare, and for me, the evening time on the UA flight is preferable anyway).

So the example I have counters the SFO-SEA example given earlier. And also shows that saying UA is competing with a basic fare vs. other carriers regular Y-cabin fares across the system just isn't correct. I'm sure Spin will come back and say why I'm wrong, and why it's the worst thing in the world for UA to have BE fares that match other regular fares on some routes, while at the same time hailing DL's strategy of charging a premium (a significant one, IMO, at 25% more in this case) for a basic fare on other routes.

spin88

(1) United is rolling out BE by markets, wait a few weeks and BE will hit that route. The key point is that it is system wide, including on highly competitive routes with all non ULCC carriers e.g. SFO-LAX, SFO-SEA.

(2) I don't have a problem with BE fares, they have their place. But that place is (a) advanced purchase - the type of fares non-business travelers buy, and (b) where there is direct ULCC competition. The example you use has - it appears - both qualifications.

(3) but what United is doing is very, very different. The point is that - given how it is being rolled out, as a sub-rosa price increase, leaving the UA BE fare to compete vs. OALs regular Y fares - it is not only not competitive, but it will likely drive away valuable traffic.

Put another way, if you want to pay UA $258 o/w for SFO-SEA for BE, when DL/AS/VX are all $258 in Y, and UA wants another $15 to Y, you are welcome too. But I think a lot of the market will view it very differently.

sbm12

The latter. And they've all said so in public now. Believing it is the former is a mistake.
Just like Delta.



This is a cash grab, not a product match. And it is that way for all three of the major legacy carriers. Delta is furthest along in the rollout but UA & AA will catch up quickly.

Links to a story I wrote elsewhere; you've been warned.

spin88

Yes, it is a "up fare" cash grab, but ONLY BY UNITED. Which is using these fares at higher fare categories, which Delta is NOT. Perhaps people will willingly pay $15 more each way to Fly United, and do so via an upsell. But I think this will end badly, with United having not only lost a lot of sales, but upset its flyer base.

I bet good money Delta does NOT match this, instead they use it to try to pick up extra traffic. Nor will AA match, and certainly not AS/VX. Given how bad of a public reputation United has at this point, it was probably the wrong time to try such a naked, in your face cash grab.

The examples give above are core, competitive business markets, and United is only matching price (on relatively expensive, last minute tickets) with the bottom of bottom feeding (far worse than what Delta does) BE fares, which means they are trying to charge more (usually $15) for a real Y. They are just not competitive.

sbm12

You previously suggested DL was only rolling out BE in markets competing with ULCCs. I'm simply pointing out that is false and that DL led the charge in putting these fares in all markets.

Time will tell how BE plays in higher fare classes. I think there is some risk for UA there but it is not a guaranteed success or failure. And it is easy to tweak as needed thanks to the way the fares are filed.

ezefllying

Intuitively, most of us appreciate that when an airline claims it's introducing a new fee or restriction to provide customers more "choice," that choice is between paying more and getting less.

That's obviously the case with United's new Basic Economy fare level, which provides virtually no frequent-flyer benefits, offers no flexibility and transforms carry-on bags into a revenue source.

United (and Delta, which previously introduced the fare level) would like to pretend that Basic Economy is meant to help flyers "save" off usual discount-economy fares. But many of us figured that the Basic Economy fares would simply assume the price points of the formerly least expensive (but far more flexible and inclusive) fare classes -- and that those previously-cheapest fare classes would increase in price.

Proving that the introduction of Basic Economy fares simply means reducing service without lowering prices is difficult, since United could claim that price hikes for normal Economy fares following Basic Economy's introduction are the result of changes in demand, season or other unrelated factors. To prove Basic Economy's impact on Economy fares, you'd need to compare virtually identical flights -- say, two flights scheduled just minutes apart -- before and after the introduction of Basic Economy into the market.

But we can compare. For example: Today's and tomorrow's redeyes from LAX to Chicago, 78 minutes apart -- one before and one after the apparent introduction of Basic Economy into that route at midnight Tuesday:




What $114 buys you at 11:15 PM Monday night costs an extra $20 at 12:33 AM Tuesday. And your $114 gets you much less -- no carry-on, no changes, no advanced seat assignment, no upgrade -- in the post-midnight hour.

And United isn't just targeting the lowest price points for service reductions. Here's what $249 -- a fairly mid-level one-way fare for the route -- gets you Monday vs. Tuesday.

Monday (today):





Tuesday (tomorrow):





I realize this will seem terribly obvious and boring -- and un-scandalous -- to a lot of FTers. After all, the airline is simply taking advantage of its market power to maximize profit.

But I find something striking about being able to so clearly and undeniably prove the lie of the airlines' claim that their race to the bottom is simply about giving passengers "choices" or "what they want." Yes, passengers like low fares. But none of them asked to get far less tomorrow than what they'd get for the same price today.

lhrsfo

I agree on all counts. We are so used to marketing departments playing fast and loose with the truth, it's always surprising when you catch them so easily on an outright lie.

garykung

While agreeing on everything mentioned, the reality you should keep in mind that Basic Economy (N Class) is not intended for elites.

So how much saving or how stupid the N Class really is should not be a concern of us.

dmurphynj

To give United some credit, they do everything possible to discourage you from booking N fares. Even their app has a toggle switch to turn them off.

It is stupid, but an idea the airline industry keeps coming back to. The difference is that the last time we saw this, we called it Ted. Basic Economy is virtual Ted.

bearkatt

this would make me visit the southwest airlines website to compare. it pays to shop around now.

appenzeller

^ great pictures how you show what Basic Economy really is ^

sbm12

And this is what happened. Fares all went up.

It always did. :-:

entropy

BE isn't "Ted", its just a way to wring more money out of travelers.

Its pretty awful, but fully disclosed and warned against. Perhaps it will prevent Kettles from getting ToD upgrade offers!

It could be worse

Look north of the border where AC has their "Tango" fares, and the "Flex" fares can (rarely) be tens of dollars, but are often considerably more for 100% earning and upgradability.

halls120

While how stupid the N class might be is indeed irrelevant. How UA has jacked up the previous lowest fare to a higher level and substituted a fare with virtually no benefits is very relevant. It's another devaluation, this time targeted at the actual fare instead of at Mileage Plus.

BaltimoreZ71

But I believe his point is that N Class is not about saving money but rather a way for United to mask a fare increase for regular economy while making it seem like they have introduced a lower fare for the same flights.