Last week I wrote about Delta’s cabin rebranding efforts, but I failed to really grasp something that is likely going to become a big issue. The lowest fare, Basic Economy, is going to roll out into more markets and become much more restrictive. It’s structured in a way that virtually guarantees a segment of people who buy it are going to be really pissed off. Those who may not understand what they’re buying have no way to remedy their situation. Not even ultra low cost carriers like Spirit do that, probably because it doesn’t make financial sense to do it that way.
Basic Economy was introduced a couple years ago as an anti-Spirit move. Delta wanted to compete with Spirit’s low fares, but it also wanted to give travelers a reason to pay the prevailing rate. So Basic Economy, with restrictions, was born. Delta was simply dipping its toes in the water when Basic Economy launched. But with ultra low cost carriers growing incredibly quickly, the time has come to ramp things up. The fare still won’t be in every market, but it’s become a core part of Delta’s product offering. And the list of restrictions is growing.
With Basic Economy, you cannot change your ticket for any fee (not even a same day change to an earlier flight). You also can’t get an advance seat assignment. You get it at check in and you can’t change it. You board last, and you can’t even pay for priority boarding if you want it. Elites get limited special privileges. Most importantly, they can’t upgrade to First domestically even if a seat is open.
That is incredibly restrictive, so you would expect a huge discount. But at this point, it’s tiny. The fare difference is $10 each way. At least if you book it on Delta.com, it’s easy to understand what’s happening.
The most restrictive rules are posted at the top of the column, and if you click at the top, you’ll get the full comparison. Will people still buy this and not realize what they’ve done? Sure. But Delta is being fairly clear here.
On the other hand, what if you book at an online travel agent? Well, that’s where it gets uglier. Orbitz only shows the Basic Economy option, but when you click through, it spells out the restrictions and gives you a $10 upsell. Priceline also only shows the Basic Economy option but when you click through, you have to initial saying you understand that you can’t change your ticket and you can’t assign a seat in advance. (None of the other restrictions are noted, so that’s not good.) Then there’s Expedia. Expedia actually downright lies about how this works.
On the flight results page, Expedia only shows the higher regular economy fare. But when you click through, you get this:
Surprise, you’ve been put into Basic Economy. And look at the bottom right. It actually says that the ticket is changeable for a $200 change fee. Further in the process, it tells you the change fee again, and if you click the fare rules, it just says they aren’t available. Wow. Something tells me Expedia might be looking at a fine from the DOT here.
But let’s get back to the point. With a product like this, you’re going to have a certain number of people who don’t really pay attention to the full details of what they’re buying. There will be few of those on Delta.com, slightly more on Orbitz and Priceline respectively, and probably a ton on Expedia. No matter what, there will be a group of people who don’t quite get it and are looking to fix the situation.
Here’s where it gets ugly. Spirit’s CEO Ben Baldanza told me long ago that tickets booked through online travel agents were about a quarter of the airline’s bookings but 100 percent of the complaints. I’ll assume that’s an exaggeration, but you get the point.
People book through online travel agents and don’t get the same level of information that they get when they book directly. But here’s the thing. With Spirit, at least there is a remedy. If you need a carry on, you can pay for it. If you want a seat assignment you can pay for it. Everything you might want is available for purchase. You might not be happy about that and think it’s extortion, but at least it’s an option.
That’s not what’s happening with Delta.
If you buy a Basic Economy fare, you can’t pay more to change your ticket. You can’t pay for a seat assignment. You can’t pay for priority boarding. You’re locked in.
That means if you’re unhappy about how Spirit does things, you’re going to be downright livid about how Delta’s doing it. If you don’t fully understand what you’re buying (and you know plenty of people won’t), then you’re out of luck. You are stuck with what you bought.
The Basic Economy fares are only offered at lower fare levels (it’s not just $10 off any regular coach fare, only the cheapies) so it’s not like a change fee is even really that important. You’d be better off throwing the ticket away than paying a $200 change fee on many of these. But if you want a seat assignment or you’d like to board earlier, you simply can’t have it. That seems dumb to me.
If someone later decides they really want a seat, go ahead and charge them $20 for it, Delta. Why wouldn’t you? It makes the airline more money than if the traveler bought the more expensive Main Cabin fare in the first place. And it at least gives people an option to get what they want if they didn’t pay attention when they originally bought the ticket.
I just don’t understand the rationale for doing this the way Delta is setting it up. It reduces ancillary fee opportunities, and it will piss people off. That’s not a good combination.