Says Some Airlines Do Not Deliver Everything Passengers Pay For

In an article distributed to the media, FlyersRights.org points out that in an earnings call last week, United Airlines said it would add more Basic Economy fares in its bid to better compete with low-cost carriers. "It's funny. When airline CEOs speak to investors, they talk proudly about raising prices. But to customers, they pretend they're doing the opposite," the passenger rights organization said.

According to the article, Senator Bill Nelson, the ranking member of the U.S. Senate Committee on Commerce, Science, and Transportation, just released a critical report on the Big Three US airlines' Basic Economy fares - which confirms what FlyersRights.org has been saying all along:

• Basic Economy fares are no cheaper than fares the airlines offered before Basic Economy;
• Airlines are using Basic Economy to upsell consumers;
• Basic Economy is increasing consumer confusion;
• Basic Economy fares are hugely lucrative.

Despite the airlines insisting that these Basic Economy fares are a lower-cost alternative, Sen. Nelson's investigation proves they are not lower than fares offered before Basic Economy was introduced. American Airlines' president also confirmed this during an investor and media day presentation last year when  he said, "Basic Economy is not a price cut."

The goal with Basic Economy has always been to get people to pay extra for what used to be included. For example, Sen. Nelson's report analyzes seven initial routes on which United offered Basic Economy and found that those fares were the same as the regular economy fares offered on the same flights prior to the launch of Basic Economy. In other words, if you used to be able to fly LAX to PIT for $125, which included a carry-on bag and seat assignment, you now are charged $150 for the same package. They raised your costs with no additional benefits.

Basic Economy fares come with a variety of restrictions, including prohibiting almost all ticket changes or refunds. So, when plans change or a flight is missed, consumers usually lose the entire Basic Economy fare paid. Consumers are also unable to select seats - even families traveling with children - and carry-on bags are not allowed.

To avoid these restrictions, consumers are being forced to pay more to receive basic benefits that were previously included for the same price.

The airlines are bringing in significant revenue from Basic Economy fares. In the first quarter of 2016, Basic Economy drove about $20 million of incremental revenue for Delta. United expected these new fares would contribute $200 million in incremental revenue in 2017. American anticipates that overall cabin segmentation, when fully implemented, will generate more than $1 billion, with a large portion of that coming from Basic Economy. This is on top of revenues from change and cancellation fees  - a total of nearly $5.9 billion for US airlines over 2015 and 2016. Baggage fees total additional billions. The report goes on to say that US airlines were on track to set a new record for 2017.

FlyersRights.org recommends that passengers complain to the airline and DOT if a fee was paid for a service that was not delivered. Airlines rarely refund fees automatically for services that are not delivered. If a fee was paid for a checked bag that is delayed or for a seat that is later taken away, complain to the airline and request a refund.

Other actions that passengers can take include:

• File a complaint with DOT so that the agency is aware of the problem. DOT's aviation consumer complaint form is available here.
• Urge DOT to implement rules that protect consumers. Last month, DOT killed rules that would have helped to more fully inform consumers about airline ancillary fees.

The organization says DOT has failed to implement rules required by the 2016 FAA extension that would order airlines to refund fees for delayed baggage and to seat families together without additional charge. If they are going to push for more profit, it'd help to reinvest in better service.

To be clear, FlyersRights.org is not against the airlines making money. What we are talking about is the maximizing of profit margins while providing progressively poorer customer service - if at all.

(Source: FlyersRights.org)

FMI: www.flyersrights.org