Though American and United both began rolling out Basic Economy fares around the same time, United rushed it and made mistakes. American, however, has been more cautious, only introducing it slowly throughout most of the lower 48 US States (with a few test routes beyond) in the last couple months. Now, American has leapt forward by putting these fares into most of Mexico and the Caribbean. The rationale given in its announcement to travel agents sounds like bull even though it technically, probably, isn’t. Still, I wish somebody would write these things like a normal human being.
In the announcement, American said Basic Economy fares were rolled into most Mexico and Caribbean markets for sale on November 29. Here’s why:
There is probably not a single travel agent whose gut reaction will be to believe that. When I read it, I just rolled my eyes, because it sounds like such standard corporate-speak that it couldn’t be true. Whenever an airline makes it sound like it’s doing something out of the goodness of its heart to help travelers, the airline sounds ridiculous.
And of course, a quick look at fares seemingly proves that point. Here’s a screenshot of what filed fares looked like before the change for a random travel date next July between LA and Cabo.
Don’t worry about all the shorthand in here. What you need to know is that the lowest filed fare before taxes was $89 one way. Now here’s how it looks now.
You can see the lowest fare is still $89, but it’s now Basic Economy. Meanwhile, the regular coach fares are $25 each way above that.
So what does this mean? Well, it’s a de facto fare increase for American. Basic Economy fares do not allow a large carry-on (except for elites/credit cardholders). Travelers can’t get a seat assignment, and changes aren’t allowed. They also board last. In other words, while the fare appears the same, to get the same product as you would have received a few days ago, you have to now pay $50 more roundtrip.
American has told us that about half the people who are presented Basic Economy options opt to buy up to the regular coach fare. That means that about half the people who will be buying low fares on American on trips to Mexico and the Caribbean will pay more than before.
It’s hard to reconcile that truth with the pitch that American is doing this for the benefit of the traveler. But of course, it’s all in the wording. Let’s break this down.
In an effort to provide better access to lower fares…
We just talked about how half the people buying low fares will now be paying more than before, so how the heck does this provide better access to lower fares? Think about it this way. Before, if you walked into Doug’s chocolate shop, you might be able to pay $1 to buy the best chocolate on the market. Doug may not have made all that much money on it, but Bob’s chocolate shop was selling lower quality chocolate for the same price. During the slow months when Doug couldn’t find enough discerning chocolate-lovers to buy his chocolate for a fair price, Doug had to lower prices to remain competitive.
But then Doug came up with an idea. He would still sell that $1 chocolate, but instead of selling his best stuff, he’d substitute that cheap crap you get in the drug store checkout lane. Then he’d raise the price of his really good chocolate to $2. What he found out is that having that $1 chocolate was necessary to get people in the door. But once they were in Doug’s shop, half the people were willing to pay more to get the better chocolate. Knowing that, Doug was willing to make that $1 chocolate available more often, because he wouldn’t actually sell that much of it.
When you translate that into American’s situation, you run into two problems with the way this is worded.
- Half the people will pay more, so while they may have “better access” to lower fares, they’re going to be less likely to take advantage of them. The statement may be technically true, but it doesn’t feel right.
- More importantly, there is absolutely no way to verify that American actually is making that low fare more readily available. We just have to take the airline’s word for it, and of course, nobody will.
Let’s look at the other half of the statement.
…and continually meet your travelers’ needs…
*sigh* We’re back to that say-nothing corporate-speak. It lacks substance, but the canned nature of the wording just makes it sound false.
So yes, it may very well be true, but American is doing itself no favors here with this kind of stilted statement. What should it have said?
American shouldn’t beat around the bush here. It should just be honest.
Our introduction of Basic Economy in the Continental US has shown us that we can continue to be competitive with low fare airlines by adding restrictions to our lowest fares and making them widely-available instead of having to offer our full product on a more limited number of seats. Because of this success, the next phase of the roll-out began November 29 with Basic Economy going into many US to Mexico/Caribbean markets. We understand that this adds complexity to your search, so we want to make sure to provide you with as much information as possible about the product and how to sell it so you can be prepared.
With that, American could go into all the details about the product not only help travel agents sell Basic Economy properly but also encourage upselling. There may very well be a benefit to travelers here in that lower fares are more widely available. But we don’t know that for sure, and American isn’t doing a good job of convincing anyone. Maybe I’m just reading too much into a simple travel agent communication, but this kind of stuff just bugs me, because it could be fixed so easily.
