When it comes to air travel policies, there are those companies that have clear-cut guidelines that adhere to specific thresholds and limits—like how much can be spent on a ticket or which scenarios constitute a seat in business class—while other firms have more flux and flexibility, making determinations on a case-by-case basis.
Whatever your own policy is, there is a travel trend that likely will have an effect on it—and that is the basic economy fare.
With several major airlines recently unrolling these bargain-basement seats that have fewer perks than a traditional coach ticket, it’s becoming clear that many travel managers and decision makers will need to reconsider their own guidelines.
So what’s the deal?
As Jeremy Quek, the air practice line lead of the Global Business Consulting division of American Express Global Business Travel (GBT), recently explained to the New York Times, “It’s very important to remember that not all basic economy fares are going to be the same.”
Each airline has its own set of conditions, so it is important that travel managers and business travelers review their preferred carrier’s website for full details.
Some typical restrictions include: nonrefundable, non-upgradeable tickets; no choice in seating and only receiving a seat assignment after check-in; no carry-on luggage; no access to overhead bin space, and being in the last group called to board the plane. These ticket holders also may not be able to earn frequent-flier miles or other rewards points that count toward their totals for premier status.
Travelers can get around some restrictions—either by paying an additional fee (which kind of defeats the purpose of basic economy, no?), or by being an elite loyalty member/having a credit card affiliated with the carrier.
Does it make sense for business travelers?
Business travelers whose employer’s policy requires them to book tickets within a certain amount of the lowest fare available may be forced to buy basic economy seats to comply with those rules—even though it may not make the most financial sense for them to do so.
Take the no-refund policy, for example.
“The risk of non-refundability is a very big piece here,” said Quek. “Those fares are basically use-it-or-lose-it fares.”
This means if an employee misses a flight, they either will decide that the trip is not worth it or pay a hefty price for securing a new seat on another flight.
Also, because certain carriers do not let fliers earn any miles or points on basic economy tickets, they may be missing out on other perks, such as waived baggage fees or seat upgrades.
Having a basic economy ticket also means that customers of American Express GBT cannot take advantage of its products designed to save travelers money, such as AIR RE-SHOP EXPERT, which monitors airfares and automatically rebooks tickets at a lower price when they become available, and AIR TRACK EXPERT, which redeems or repurposes tickets that were not used, say, because of a missed flight.
Employers also need to consider at what point does no-frills get too old, for when companies constantly nickel and dime their employees’ every move, it makes retaining top talent difficult.
So will the basic economy fare have you revisiting your own air travel policy? If so, here’s some food for thought on when to book (or not) basic, economy, and business seats.
Book it if: The traveler is leaving and returning on the same day and is traveling light, only with a laptop or briefcase. There’s a slim chance the traveler will have to cancel or miss their flight.
Do not book it if: There’s only a slight difference in price between basic economy and a standard coach ticket. The traveler/company is on some sort of loyalty program and the basic economy fare restricts earning and using these points.
Economy / Premium Economy
Book it if: It’s a domestic flight in which the traveler can recover quickly. It’s an international flight, but the traveler lands one or two days before the big meeting and has enough time to bounce back from jet lag.
Do not book it if: It looks like you are skimping on a top-performing employee who deserves to be in business class.
Business / First
Book it if: It’s a long-haul flight and supercritical that the business traveler arrives well rested in order to be lucid at an important meeting that same day.
Do not book it if: It’s simply because your C-suite executives have grown accustomed to flying nothing but first; this sense of entitlement can be costly to both the culture and bottom line.