United, American Begin Selling Cheaper Economy-Class Fare

By David Koenig Lifestyle and Budget Associated Press

FILE - In this Friday, June 3, 2016 file photo, an American Airlines passenger jet takes off from Miami International Airport in Miami. American and United have started selling cheaper "basic economy" fares as they battle discount airlines for the ... most budget-conscious travelers, announced Tuesday, Feb. 21, 2017. (AP Photo/Alan Diaz) (AP)

DALLAS (AP) — American and United have started selling cheaper "basic economy" fares as they battle discount airlines for the most budget-conscious travelers.

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American announced early Tuesday that it began selling the new fares for flights starting March 1 on 10 different routes from its hub airports in Dallas, Miami, Philadelphia and Charlotte, North Carolina.

United followed suit later in the day, posting reduced fares on some flights from Minneapolis to seven of its hub cities including New York, Chicago and Los Angeles for travel starting April 18.

Basic economy fares come with severe restrictions. Buyers can't pick a seat when they buy the ticket, they're in the last group to board, and they can only carry a small item that fits under their seat. With a few exceptions, they must pay extra to check a wheeled bag that other economy-class travelers can put in the overhead bin.

But the fares are cheaper.

The savings over a regular economy ticket appear to range from about $24 to $40 for a round-trip ticket on American and United. For example, on two random early-March itineraries between Dallas and Baltimore, economy tickets were listed on American's website at $249 and $309. Those same trips were priced at $209 and $269 on basic economy.

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Even on the routes where American sells the new fares, they are usually available only on a small number of flights — sometimes one or two a day — and on some days, none at all.

Bargain hunters will see more basic-economy options when searching one-way flights, rather than round trips, because American will not allow flyers to buy a round trip that combines the new cheaper fare on one leg with a regular economy fare on the other. On one-way flights, the price break can be as little as $12.

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American, the world's biggest airline, said it will eventually add basic-economy fares on other routes.

The United offering is even more limited — it only appears on some flights between Minneapolis and seven United hubs around the country. United said it started small to ensure a smooth rollout, but plans to expand the idea to the rest of the U.S., the Caribbean and the closest destinations in Latin America.

Basic economy fares were introduced by Delta Air Lines several years ago in response to growing competition from discounter Spirit Airlines. Spirit and Frontier Airlines offer bargain-basement fares but add on more fees than the bigger airlines, including charging for use of overhead bins. They have gained ground among travelers looking for the cheapest price.

Delta now offers basic economy on about 40 percent of its U.S. routes and plans to cover its entire domestic network by mid-year.

The major airlines are losing customers whose internet searches skip American, United and Delta because of higher economy fares, industry consultant Robert Mann said.

The new discount fares could help the big airlines by stimulating new demand and because some people who intend to buy a rock-bottom fare will pick a traditional economy ticket instead, Mann said. Airline websites warn buyers of the restrictions on basic-economy tickets.