When I first saw the announcement that United and its joint venture partners Lufthansa Group and Air Canada were rolling out Transatlantic fares without the first bag free, I glossed over the communication thinking it was just an extension of Basic Economy (BE) into a new market. I was wrong. In what I can only assume is a concession to Lufthansa in order to speed up the roll-out of this de facto fare increase, United has opted to introduce what it calls “the first step towards a Basic Economy product” over the Atlantic.
What makes this a “first step” instead of an actual Basic Economy roll-out? Well, let’s start by looking at what’s different from a regular economy fare:
- There is no first checked bag included. As with Delta in its Transatlantic BE fares, United will charge $60 for the first bag.
- Fares are non-refundable and non-changeable.
- These fares can’t be combined with non-“almost Basic” fares.
- Upgrades are not allowed.
If this sounds like a Basic Economy fare, well, it’s because it is almost a Basic Economy fare. So what’s different? Three things up front and one big thing behind the scenes.
The three things you’ll notice are:
- Seat assignments are still allowed as normal.
- Carry-on bags are not restricted
- Boarding occurs in normal boarding groups, not at the end.
This just leaves me wondering which of these three things United is looking to implement to make it a true Basic Economy fare. If it wants to match Delta and American, it will put some kind of restriction on seat assignments. (Delta doesn’t allow them, but American will let you purchase them.) United will also likely push everyone to board last. But carry-on bags have not been restricted by the others, so it’s likely United will fall in line on that policy.
Behind the scenes, this is implemented in a much different way than Basic Economy. Let’s see if I can find a way to explain this clearly.
Airlines file a variety of fares that book into specific fare classes, or “buckets” if you will. For United, the lowest fares internationally fall into K class with L, T, S, W, etc being for increasingly-high fares. United may have fares filed in K class on a specific route, but then separately it determines how many seats to sell at that fare. If the flight is doing well, then K will be closed off so only higher fares will be available for sale.
With Basic Economy today, United has a slew of fares that are filed as discounts off the regular selling fares. For example, the KAA3AXDS fare basis is the lowest regular economy fare. But United has the KAA3AXBS at $25 less in Basic Economy. Usually the first letter of the fare basis is the class it books into. But with Basic Economy, United actually has it book into a separate class, “N” class. The fare, however, is still tied to the lowest selling economy fare. This means United has two checks on itself. First, to sell this Basic Economy fare, K has to be available and selling in regular economy. Second, N has to be open for sale as well.
With this new almost-BE offering over the Atlantic, United is not using N at all. Instead, it is filing fares in K, L, and T for travel originating in the US and K, L, T, S, and W for trips originating outside the US. This doesn’t mean that all fares in those buckets will be almost-BE fares. They will also have an upsell fare available in the same class. United just loses the ability to turn off BE fares by shutting off N class as it can domestically.
From the customer perspective, this doesn’t matter. It’s just how United structures things behind the scenes. I know I’ve probably last half of you right now either out of confusion or sheer boredom, but this seems like an awfully strange way to handle this kind of roll-out. So why is United doing it this way? I honestly don’t know for sure, but I am happy to speculate that this is Lufthansa’s doing.
Remember, United is in a joint venture with Lufthansa Group and Air Canada for travel over the Atlantic, so it can’t just file any fares it likes. It has to coordinate with its joint venture partners. The way this is being set up is exactly how Lufthansa does it within Europe today. Lufthansa’s Light fare (also what it is calling this Transatlantic fare) has no checked bag, isn’t changeable/refundable, and requires payment for a seat assignment. The Classic fare has none of those restrictions. The existing intra-Europe fares all book into the same fare classes, just as this new product will. Lufthansa offers Light fares all the way up the fare ladder, however, and even does it on the most expensive full Y fares. (Remember, United started out doing this with Basic Economy but reversed course quickly.)
I assume this means either Lufthansa can’t technically create a Basic Economy-style product with N class (or something similar) or it just doesn’t want to do it. Either way, I’m assuming United has agreed to follow the Lufthansa model just so it could get something in the market to boost revenue. Like Basic Economy domestically, this is a fare increase for those who need to check a bag or have ticket flex. With oil prices rising, United was probably eager to get some kind of revenue boost even if it’s only a half-measure. Better to get some now and then do a full roll-out later when it can address the other lingering issues.
Now all we can do is speculate about what other restrictions will follow when a true Basic Economy product gets introduced sometime down the line.