US Airlines Unveil "Basic Economy" Fares

Two major US airlines have started selling no-frills discount fares that do not permit most passengers to bring large carry-on bags to stow in the overhead bins.

United Airlines and American Airlines started selling new Basic Economy fares on Tuesday, making them the only two full-service US airlines to offer a fare that limits what some passengers can bring for the overhead bins, Skift reported.

 United and American designed their products to compete with fares from ultra-low cost US airlines, including Spirit Airlines and Frontier Airlines. Spirit and Frontier sell deeply-discounted tickets, but charge for bin space for larger bags.

Most passengers buying United and American’s Basic Economy fares will board last and they’ll be randomly assigned seats. They will not be able to change their tickets and they won’t be eligible for free upgrades to first class, even if they’re an elite frequent flyer.

American will allow passengers to pay just before departure to add some perks, like better seats, but United will not. American’s passengers also will earn partial credit toward elite frequent flyer status, while United’s customers will not.

The overhead bin limits are the most contentious part of the new fares. Technically, Basic Economy customers on American and United can use them, but only to stow the tiny bags they’re permitted to bring. 

The two airlines say they have limited bin space and it makes sense to reserve it for higher-paying customers. (On both United and American, Elite frequent flyers and airline credit card holders still may bring large carry-ons.)

Delta, another US airline, offers a similar fare, but it allows all customers to bring a full-size carry-on for free.

The industry is taking a wait-and-see approach to the announcement, but the move already has its critics.

In an article for the New York Times, staff writer Julie Creswell said, "While airlines are loath to discuss pricing, the new Basic Economy class seats are expected to be in many cases the same price as the standard economy fare, meaning travelers will get less for the same price."

The standard economy ticket, the one expected to rise in price, may end up being a better deal in some cases than the new Basic Economy ticket, she argues.