It is important to point out to those who lament the gradual decline of the quality of US economy class that those hot meals, bigger seats, and more legroom you got a few decades were never free: they were included in the price of your ticket, which used to be more expensive. Studies of shown that, on average, airfares have declined by 50% since 1980. Even if we don’t like to admit it, you may get less when flying economy on US airlines these days, but flying is far cheaper than it used to be.
The greatest exception to this trend of getting less but paying less when it comes to the US economy class experience is the introduction of basic economy among the big three US airlines. While the exact details vary from airline to airline, generally when booking basic economy you won’t be able to choose a seat assignment, elites aren’t allowed free upgrades, you earn reduced miles, you can’t cancel or change your ticket (at all–you can’t even pay for it), you aren’t allowed carry-ons… in short, it sucks. It sucks, and you don’t pay any less for it. I’ve provided examples of this in the past, and it is simply a fact that, with the decline in the passenger experience that comes with basic economy, there is no corresponding drop in price. United, Delta, and American claim that they introduced these fares to compete with low-cost carriers, but you can’t compete with low-cost carriers if you’re fares are still more expensive while your passengers are getting less.
At first, Delta, United, and American only sold basic economy on a handful of domestic routes. However, Delta slowly began selling basic economy on more and more routes (including transatlantic ones) and United made basic economy system-wide domestically (except Hawaii flights) in May, and it seemed almost certain that American would follow.
Yesterday, American announced during their second quarter earnings call that they plan on rolling out domestic economy on all domestic routes by September of this year. This is quite strange, given that American has stated that they were actually seeing lots of people who would otherwise fly United choose to fly American instead because American didn’t used to have system-wide basic economy. Why would you devalue your product such that you lose a competitive advantage? The simple answer is that American feels that the cost of lost business from people who would otherwise have flown United but instead chose American because of the lack of basic economy fares would be offset by making people pay more to avoid basic economy on their own flights.
Simply put, this move is terrible for passengers. The big three US airlines are pursuing a strategy of “calculated misery,” trying to make consumers pay more to escape the suckiness of basic economy, making them pay more to get same thing as before basic economy was rolled out. I find it unlikely that enough people will take their business to the ultra low-cost carriers (doing so would make sense because, on Allegiant, Spirit, or Frontier you get essentially the same thing as you would in basic economy on the US3 for less than what the US3 charge for basic economy) to make AA, DL, and UA reconsider basic economy, and therefore I suspect that the Big 3 will largely get away with this scam.