March 27, 2017

Is Basic Economy a Fit for Business Travelers?

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With more airlines announcing basic economy fares, business travelers are debating if there’s any benefit to giving up perks like overhead space to save a few extra bucks.

This cheap fare was originally introduced to travelers by airlines like Spirit and Allegiant, but it seems the rest of the industry has caught on to this opportunity. For example, back in 2015 Delta started offering basic economy fares, followed by American and most recently, United. Most of these tickets do not allow changes, upgrades, seat reservations, refunds, or overhead bin space.

Meanwhile, the price difference between a basic economy seat and regular economy ticket is usually just a few dollars. Does a basic economy fare actually save money in the long run with such a small price difference and the additional fees for overhead bin space and seat assignment?

In general, corporate travel managers and solutions like our business travel management platform encourage responsible spending, and in our case rewards employees when they do. However, many travel managers are actually discouraging these flights to maintain a quality experience for their traveling employees. Many industry commentators believe this could be ploy by airlines to push business class ticket sales.

The two biggest concerns with these fares for business travelers are:

  1. Boarding the plane last regardless of status
  2. Not earning loyalty points for that flight

Meanwhile, if business travelers who use TripActions to book business travel opt for the cheaper flight that saves more company money, they could earn larger rewards redeemable for gift cards, personal travel, or upgrades.

With TripActions, this gives employees choice and freedom over their own travel and reward potential so long as the fare is below a certain personalized price. Business travel traditionally revolves around convenience rather than price but the market is shifting to consider both.

As basic economy becomes more readily available on many airlines, we have customized the basic economy booking experience (UI) to ensure our users are aware of the implications that come with the cheaper fare and provide these bookers and travelers with the next best, cost-effective alternatives. Stay tuned for a more detailed summary of our UI for flights offering multiple fare classes.

For real time updates, follow TripActions on Twitter and subscribe to our blog to be notified about new posts and let us know what you think about these new fares!