American Airlines passengers may find themselves fighting harder for overhead bin space this fall after the airline decided to allow carry-on bags for customers flying on basic economy tickets.
Starting Sept. 5, passengers who book the cheaper, more restrictive fares will be able to fly with a personal item and carry-on bag, like regular coach flyers, the Fort Worth, Texas-based carrier said recently.
Getting rid of the bag restrictions on shorter flights will make its basic economy fares more competitive with airlines that include a full-size carry-on in their cheapest fares, American said. Travelers choosing the cheaper fares still can’t select a specific seat in advance for free and aren’t eligible for upgrades.
Neither American nor Chicago-based United Airlines allowed basic economy flyers to bring carry-ons that had to be stored in overhead bins when they began selling the few-frills fares last year, though some frequent flyers and airline credit-card holders were exempt from the restrictions. Basic economy travelers who pay to check bags would quickly see those fees eat into savings on their fares.
Atlanta-based Delta Air Lines, which already had its version of basic economy, was more generous, letting all coach passengers bring a carry-on and personal item.
American wants its version of basic economy to be more competitive with Delta’s, said Henry Harteveldt, travel industry analyst and president of Atmosphere Research Group. Given a choice between two similarly priced tickets, few passengers would pick the one with more restrictions, Harteveldt said.
A United spokesman declined to say whether the airline is planning a similar policy change.
“We continuously review our fare offerings to give customers options that best fit their personal travel needs,” spokesman Jonathan Guerin said.
Restrictions like carry-on bag limits are meant to encourage passengers who are willing to pay more to upgrade to a regular coach ticket. But if United remains the odd man out among the three largest traditional carriers when it comes to carry-on bag rules, it will have to lower basic economy fares, limit the number of tickets it sells or risk losing basic economy passengers to rivals, Harteveldt said.
“If United is opting not to match, they are penny-wise and pound-foolish,” he said.
Guerin said basic economy’s carry-on restriction has other benefits, like making boarding easier, freeing up overhead bin space and reducing the number of bags passengers must check at the gate when bins fill up.
But Ben Schlappig, author of the travel blog One Mile at a Time, said he’s also seen the limits on carry-on bags hold up boarding when basic economy flyers who said they were unaware of the rules argued about having to pay a fee to check their carry-on.
“I think it’s great for consumers,” Schlappig said of American’s policy reversal. “At least it’s a nonpunitive option.”
American’s policy change also brings rules for domestic basic economy passengers in line with those for customers flying between the U.S. and Europe.
Both American and United began offering cheaper but more restrictive fares on some trans-Atlantic flights earlier this year, and both allow each passenger a personal item and larger carry-on. United described those new fares as a step toward an international version of basic economy.
Both airlines have said more than 60 percent of passengers offered a choice between basic and regular economy pay up for a standard coach ticket.
While American’s basic economy wasn’t bringing in as much extra revenue as the airline originally expected, tweaking the rules will “make this product more competitive, allowing us to offer this low-fare product to more customers,” airline President Robert Isom said recently during a call with investors.
About a year ago, United also said it wasn’t seeing the expected benefits from basic economy, but executives chalked it up to being more aggressive than competitors in rolling out the new fares.
During a call with investors earlier this month, Chief Commercial Officer Andrew Nocella said the airline was “very happy” with the rollout.
“It’s a great competitive tool, and we’re going to use it even more and more,” he said.