United Airlines will launch a Basic Economy fare early next
year that, among its restrictions, precludes seat selection and use of overhead
storage space.
Basic Economy fares will appear across United's distribution
channels in January for flights departing in the second quarter of 2017 and
beyond, the carrier announced at its Investor Day. The fares will appear in
"select markets" first and later expand to most domestic flights and
short-haul flights to Latin America.
Like the Basic Economy fare Delta introduced
in 2012, United's Basic Economy fare class will place those passengers at the
end of the boarding line and restrict them from upgrading, changing their
tickets and selecting their own seats. Instead, they will get automated seat
assignments at check-in. Basic Economy travelers can earn MileagePlus miles for
redemption, but those miles do not count toward earning elite status in the
program.
Additionally, Basic Economy travelers will be restricted to
a single personal item that must fit under the seat. That restriction is
designed to speed up the boarding process, as fewer travelers will bring
overhead bags onto the plane, according to United. In-flight amenities remain
the same as general economy fares.
Travelers who have status with MileagePlus or have a
MileagePlus-branded credit cards can avoid some of the restrictions. Those
passengers, for instance, can bring on an additional carry-on and can keep
their standard boarding groups.
"By offering low fares while also offering the
experience of traveling on our outstanding network with a variety of onboard
amenities and great customer service, we are giving our customers an additional
travel option from what United offers today," executive vice president and
chief commercial officer Julia Haywood said in a statement.
Basic economy fares allow carriers to compete directly with
such low-cost carriers as Spirit Airlines, allowing them to offer competitive
fares without reducing all economy fares to that level. The restrictions,
however, have made basic economy fares unpopular among corporate travel buyers,
many of whom have blocked them in their booking channels. In Delta's
third-quarter earnings call, president Glen Hauenstein said "a significant
number of major corporations" suppress Delta Basic Economy fares from appearing
for their travelers. "These low fares with no seat assignments just
complicate things," FINRA manager of corporate travel services Carol
McDowell said. "People don't know what they're buying."
American Airlines is working on its own no-frills economy
fare, which it expects to launch next year.
United
executives also are evaluating premium economy cabins for both international
and domestic flights, and American Airlines, Alaska Airlines and Delta Air
Lines all are introducing their own premium economy products.