No luggage, last to board: How basic economy air fares are taking over the world

The reputations of so-called legacy airlines, traditionally known for offering high levels of service, are being slowly eroded as they are forced to offer stripped back fares to compete for the business of budget-conscious travellers.

KLM and Air France, the Dutch and French flag carriers, are the latest household names to introduce a ticket option that includes neither seat selection, checked luggage or the ability to change a booking.

From April 10, the sister airlines will extend their hand luggage-only fares from its European network to transatlantic flights, with checked luggage costing an extra €50 (£44) per person.

Alitalia, the Pope’s favoured airline, has also begun selling an “economy light” option that forbids more than one piece of hand luggage, booking amendments and ticket refunds. German airline Lufthansa, too, offers a similar ticket.

All are following in the footsteps of America's biggest carriers – as well as British Airways. BA launched a basic fare in 2016 (not including checked luggage) and provoked the ire of travellers when it announced last year that those who pay least would also board last. US airlines have been at the vanguard of the basic economy revolution, however. Delta was the first, offering the fare since 2012; United and American Airlines were quick to follow. 

How basic does it get?

Basic economy is the term of choice for US airlines, with American, Delta and United all selling cheap seats under the label.

American, whose basic economy fares mean no access to overhead lockers, no assigned seat at check-in and a requirement to board in the last group, unless they are a high-level member of American's loyalty scheme or hold an American-branded credit card, currently only offers such tickets on domestic routes but says it believes something “similar” could work “in select longer-haul international markets”.

Other restrictions on the tariff include no upgrades and no refunds. 

However, the low-rate tariffs will still include American's standard complimentary snacks and soft drinks – a move that Europe’s budget airlines could learn from, perhaps. “Once on the plane, Basic Economy customers have the same in-flight experience as anyone else in main cabin,” the airline said in a statement. “They sit in regular main cabin seats. American has no plans to alter its seats or the interior of its aircraft for Basic Economy.”

Ahead of American, Delta has already launched its basic economy tickets on international routes.

“You’ll still enjoy the main cabin experience at a lower cost, in exchange for fewer amenities on select flights, like receiving your seat assignment after check-in,” the airline says. Passengers will also be ineligible for paid or complimentary upgrades, and checked baggage fees will apply, but they do have access to the overhead lockers.

KLM’s “light” fare still affords travellers a free drink and meal or snack on its European routes. The same, too, with sister airline, Air France.

Why are traditional carriers behaving like low-cost airlines?

“Airlines that you might still loosely call legacy learned a lesson many years ago,” says John Strickland, director of independent air transport consultancy, JLS Consulting. “Back then they were complacent and did not respond to the challenge of the low-cost carriers that were snapping at their heels, or even taking their business away.

“So they had to fight a rearguard action. Now, they see the growth of long-haul low-cost and they’re not going to make that mistake again.”

The rise of carriers such as Norwegian, WOW Air and AirAsiaX means that the reach of “no-frills” airlines is no longer restricted to short-haul markets, and threatens to eat into the global customer base of the likes of BA, American and Lufthansa.

Airlines have responded to the threat in two ways, says Strickland.

“One way is setting up a specific low-cost, long-haul airlines, like IAG has done with Level, and the other is by changing their pricing,” he said.

The fall in air fares and broadening of the market to younger travellers keen to explore the world, or growing middle classes in countries in south-east Asia and India, also means airlines are vying for the business of customers not interested in reputation but only in value.

That would go some way to explain the launch of millenial airline, Joon, by Air France, aimed squarely at a hip, young demographic happy to spend their disposable income on flights.

What does it mean for travellers?

In the first instance, it means that if you’re flying with just a single piece of hand luggage and have no cause to amend your flight details, there are more cheap fares available.

But it could also means as more and more carriers accept that they must offer a range of fares, from unbundled budget to first, airline pricing structures will not be enough to tell them apart and there could be a greater focus on other differentiating factors.

For example, British Airways, which has come under criticism over the last 12 months for a perceived fall in the quality of its service, last week launched a multi-million pound investment in its long-haul economy catering in the shape of an expanded and revamped four-course menu.

Similarly, John Strickland says a reputation for punctuality could become a key factor, something Ryanair has always stressed when bidding for the loyalty of budget travellers.

Does Emirates have a basic economy?

Nope, Emirates and its kin - the likes of Qatar Airways and Etihad - do not. But they have made more subtle changes to their pricing. 

The former has a “saver” option in economy, which, although it includes one piece of checked luggage (30kg), does not allow complimentary seat selection or free refunds.

Etihad, too, has an “economy deal”, for which passengers are ineligible for upgrades or refunds, and although a piece of checked luggage (23kg) is included, seat selection comes at a cost.

Qatar’s “economy saver” does not allow refunds for cancellations and changes to the booking come at a price. A 30kg checked bag is included in the price.