Will you be smiling that much when you fly Basic Economy? — Photo: United Airlines
Even though the vast majority of my flying is in economy, it’s sometimes hard for me to know exactly what economy class is anymore. In the good old days, it reliably meant a seat with enough legroom, a drink, a snack, and my fair share of space in the cargo hold. But under pressure from ultra-low-cost carriers, U.S. legacy airlines have chipped away at what they offer travelers seated aft of the wing.
That trend took a major jump forward — or, depending on your perspective, backwards — with the introduction of new no-frills “Basic Economy” fares that do the bare minimum to get you from Point A to Point B. Delta announced the rollout of its Basic Economy in select markets in late 2014, and has expanded it to other routes since then. United unveiled its own basic product late last year. Earlier this week, American shared that its own Basic Economy fares will be going on sale in February, starting with ten markets.
Is this new category of barebones fares good news for price-sensitive flyers? Or is it a new circle of hell in the sky? Read on for more on Basic Economy and what it means for you.
Who doesn’t like low prices? I know I do. But I also know with low prices, there is probably a “catch,” or I might not get the same experience as if I paid more elsewhere. This concept seems to be pretty simple to understand (the whole “you get what you paid for”), but many it all goes out the window when you start flying.
There are many passengers out there who are not fans of super cheap airlines (and ala cart) airlines, like Spirit and Allegiant. These are probably two of the most aggressive ultra low cost carriers and I think this post speaks to why these airlines can be so successful. These are the airlines who provide rock bottom prices and the ability to pay more for the services you want/need. A few years back (first published in April 2011), my creative side decided to make a little comic strip showing the five stages of flying an ultra low cost carrier. It has been of my all time favorite stories, because it rings true so often. I am guessing that these five stages might seem pretty familiar to many of you!
Stage One: The Search
There are many out there who could care less about what airline they fly on — all they care about is price. They remember flying from Los Angeles to Topeka in 1996 for $79.00 round trip and refuse to pay more than that ever again. They will check every airline site possible, spending hours, maybe even days trying to find the best deal possible. Then, amazingly they find one airline with prices way less than their competitors. Why is it so much cheaper? Who the heck cares… for that price, you are willing to fly in a cardboard box! After getting your ticket, you gloat to as many as you can on how much you saved. You title yourself the “Airline Fare Master.” Oh… just wait my friend.
A Spirit Airlines Airbus A321 wearing the Bare Fare livery at TPA – Photo: JL Johnson | AirlineReporter
I paid a mere $16.11 for a one-way Spirit Airlines Bare Fare flight from Kansas City to Dallas. Crazy, right? It gets crazier… $14.24 of that ticket went to the “Government’s Cut,” (Spirit’s words, not mine) that is, various government-imposed fees and taxes. Of the remainder, a single penny went towards the base fare, with the final $1.86 going to what Spirit refers to as “Unintended Consequences of DOT Regulations.” Depending on where you sit on the regulatory fence, the actual revenue from my Bare Fare was either a penny or $1.87.
Spirit Airlines Bare Fare cost structure breakdown – Image: Spirit.com
Either way, the airline was bound to make money off of me from their various fees, right? After all, that’s what Spirit is known for: evil fees. But, what if I went totally bare and instead just paid only for “ass plus gas” (again, Spirit’s words, not mine). Do people actually do that? I did… for science.
Frontier Airlines’ new livery in 2014 – Photo: Blaine Nickeson | AirlineReporter
Looking at the market today, and lots of talk about additional airline mergers, it seems that Frontier and Spirit joining forces would make sense.
With the recent completion of the American Airlines and US Airways merger, there are officially four major U.S. airlines that control over three-quarters of the domestic air travel market. The four airlines are: Southwest, United, American, and Delta. All of them have been through mergers in the last decade. The remaining twenty-five percent of the market is divided up amongst carriers such as JetBlue, Alaska Airlines, Spirit Airlines and Frontier Airlines, amongst a few others. There is a very small likelihood that another merger would occur amongst the major four airlines due to antitrust regulations. Therefore, any airline consolidation would most likely happen among the smaller carriers that control the remaining twenty-five percent of the market, in an effort to better compete with the four mega-carriers.
One potential merger that appears to be the most promising is a deal between Fort Lauderdale, Florida-based Spirit and Denver, Colorado-based Frontier. Spirit operates around 250 daily domestic departures, while Frontier operates at somewhere around 230 departures daily. The merger would combine two companies positioning themselves fighting to be the top ultra discount airline in the United States.