Finally, American Airlines Admits Basic Economy Means Higher Fares
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. Terms apply to the offers listed on this page. 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.
Welcome to The Points Guy!
Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
- Earn 1X Miles on all other eligible purchases.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA Pre✓®.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees