This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.
Back in February 2017, American Airlines first launched basic economy. Since then, the world’s largest airline has expanded the no-frills ticket option nationwide and even into Canada. First presented as providing customers a “lower cost option,” it was marketed by AA as a customer-friendly move.
Throughout the rollout, we’ve seen that this isn’t the case. Fares haven’t dropped. Instead, customers are having to pay more for the same “Main Cabin” experience than they used to. Basic economy fares have generally matched the old economy fares on many routes. Even worse, AA hasn’t lived up to its promise of matching low-cost carrier fares with its basic economy fares, meaning that passengers are having to pay a premium for a similar experience — even though American Airlines likes to tout differences between the two.
Thursday, at American Airlines’ Investor and Media Day, AA’s President Robert Isom admitted what we have all noticed to be true: “Basic Economy is not a price cut,” he said during a presentation.
American Airlines is saying that, as part of product segmentation, basic economy fares fill the old role that Main Cabin used to have.
Of course, the fact that basic economy isn’t cheaper isn’t news or that surprising to those who follow The Points Guy. After all, we reported in January that American Airlines was projecting $1 billion per year in incremental revenue from basic economy and premium economy.
However, this marks the first time that we’ve heard American Airlines admitting that basic economy is in fact a price increase, and spinning it as a positive for investors and passengers.
LIMITED TIME OFFER. Aside from the 100,000 points welcome bonus (available until 8/8/18), Amex recently made huge improvements to the Business Platinum Card, including the fact that you will now earn 50% more points on purchases of $5,000 or more, earn 5x on flights and eligible hotels at Amextravel.com and cardholders will receive a $200 airline fee credit each year.
- Limited Time Offer: Earn up to 100,000 Membership Rewards® Points.
- Earn 50,000 Membership Rewards® points after you spend $10,000 & an extra 50,000 points after you spend an additional $15,000 all on qualifying purchases within your first 3 months of Card Membership. Offer ends 8/8/18.†
- Get 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com.
- Get 50% more Membership Rewards® points. That's 1.5 points per dollar, on each eligible purchase of $5,000 or more. You can get up to 1 million additional points per year.
- 35% Airline Bonus: Use Membership Rewards® Pay with Points for all or part of a flight with your selected qualifying airline, and you can get 35% of the points back, up to 500,000 bonus points per calendar year.
- You can also receive 35% points back on all First and Business class flights, with all airlines available through American Express Travel.
- You can enjoy access to The American Express Global Lounge Collection℠ offering access to the most lounges across the globe, when compared with other U.S. credit card offerings. As of 11/2017
- Terms Apply
- See Rates & Fees