American Airlines just gave us one more reason to avoid its base economy fares.
Overnight and without warning, the Fort Worth, Texas-based airline added a new checked baggage fee for travelers to book the cheapest tickets on many long-haul flights.
As of June 7, basic economy class passengers to and from Asia, India, Australia, New Zealand and Israel will now be charged $75 to check in their first standard size suitcase Surname. If you bought a basic economy fare on one of these routes, you’ll be on the old policy, meaning you’ll still receive one checked baggage with your ticket when you buy it.
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Note that the second checked baggage will continue to cost $100 and the third will still cost $200. All bags have size and weight restrictions.
With these new fees, American has become the first major US airline to charge a checked baggage fee on all basic economy class tickets. Both Delta Air Lines and United Airlines offer one piece of checked baggage free of charge on trans-Pacific routes, but both rivals charge baggage fees on long-distance transatlantic routes.
“We are simplifying our product offerings to make it easier for customers to shop for travel. With this change, our Basic Economy product will include all of the same features whether a customer purchases it for domestic or international travel,” American said in a statement to TPG. .
All basic US economy class fares include one standard carry-on bag and one personal item, with no destination restrictions.
That said, Americans recently adjusted their underlying economy fare earlier this year to mileage limit and Loyalty Points you earn from these tickets. As of March 1, you now earn bonus miles and Loyalty Points at the rate of 2 miles and Loyalty Points per dollar spent — down from 5 per dollar spent (before any which status bonus) before.
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Even with the new checked baggage fees and reduced mileage income, you can still buy a variety of accessories on these fares, including:
- In-house preferred.
- Priority and Main Cabin Extra seating.
- Flight changes are confirmed on the same day.
Elite occupants can also enjoy their benefits, including the ability to get free upgrades and checked baggage, on basic economy class tickets.
Basic economy tickets were introduced for the first time to better compete with ultra-low cost airlines. Allegiant Air, Frontier Airlines, and Spirit Airlines fly many of the same routes as the legacy “full-service” carriers, but ultra-low-cost airline fares are often significantly cheaper.
When flying with a low-cost airline, your ticket covers only the cost of transportation; Pre-assignment of seats, bags, snacks and drinks are all subject to an additional charge.
With basic economy class, the mainline, legacy carriers say they can match the fares of cheaper competitors by removing many of the bundles you normally get with economy class tickets usual. Such fares are available on all major US airlines, except Southwest Airlines.
Interestingly, these ultra-low-cost airlines don’t actually fly any of the aforementioned long-haul routes but currently incur checked baggage fees in the underlying economy.
In those cases, adding restrictions on the cheapest fare serves as a segmentation strategy to capture as much revenue as each passenger is willing to pay, said Savi Syth, director airlines equity research executive at Raymond James, recently told TPG.