The Washington Post on Basic Economy - and I Fervently Disagree with Its Takeaway
The experts were interviewed. I am a lonely observer.
Andrea Sachs writing in the Washington Post on 3/8/2026 asked: Why do airlines hate basic economy passengers? She writes:
Since December, my American Airlines membership account has been frozen at 55,361 miles. And so, it will remain as another basic economy benefit bites the dust.
For more than a dozen years, the lowest fare ticket category has been a boon for budget travelers willing to trade comforts for a cheaper price. However, the major airlines have been pecking away at our perks, forcing us to reckon with a hard truth: Our devotion is unrequited.
Sachs quotes:
“What the airlines are basically doing with these changes is telling the basic economy traveler we don’t value you or your business,” said Henry Harteveldt, founder and president of Atmosphere Research Group, a consulting firm. “The actions will not induce many of these travelers to become loyal.”
Sachs laments: “Without the incentive of free travel, budget fliers might find themselves at a crossroads. They can resist the pressure to upgrade and remain steadfast in their lane. They can give in, paying more for a standard economy seat with fewer restrictions. They can switch to the even more stringent ultra-low-cost carriers. Or they can learn how to play the game”.
Yep.
Sachs quotes: “I don’t think the big airlines really want to sell you basic economy tickets,” said Jeb Brooks, a travel content creator who co-founded GreenerGrass.com with his wife, Suzanne. “During the online booking process, they’ll usually discourage you from buying these types of tickets.”
Yep.
Then she quotes Gary Leff, founder of the travel blog View from the Wing, who compared the carriers to the bad boyfriend whose affections you try to win over.
“We’re going to treat you really badly, so give us more money and we promise we will treat you better,” said Leff, channeling the carriers.
Nope but maybe - I suppose on occasion.
WHEN IS SOMEONE GOING TO ARTICULATE THE REASONS WHY THE INDUSTRY NEEDS TO DE-COMMODITIZE TO SUSTAIN ITSELF?
… and suggest the Washington Post and other outlets should stop writing stories that are sensational; pretend to be learned by offering facts about the nuances of the products offered by respective airlines; that the industry is not healthy by any measure; and that an unhealthy industry is not good for the passengers the story suggests are being weaponized against by large airlines with a Basic Economy product for sale. So sad.
What sucks about being a lonely observer is that I did write about this need a lot beginning in April 2021.
Yep. I first wrote about this in April 2021 in a presentation titled: Flight 031130: Departing Ubiquity Destined for Segmentation? I prepared it with one man’s brilliance and vision in mind - by remembering the late Mike Levine. The right hand of Alfred Kahn when deregulating the industry was taking place. The guy that any serious student of the industry respected and maybe feared. The author of many pieces of required reading. The guy who took a lot of time to sit with me and chat.
AN INDUSTRY INCUBATED WHEN IT WAS DEREGULATED
From deregulation through 2021, the U.S. airline industry can easily be characterized by me-too products, overcapacity, and frequent price cuts. A perfect definition of a commodity industry. In the deck linked to above, there is much to chew on from a 1992 paper on market contestibility.
A Harvard Business School study wrote about ways to delay or counteract commoditization of an industry:
1. Innovate. A new product that better meets consumer needs, even an upgrade of an existing product, can one-up competitors and force them to invest in matching or exceeding the new specifications.
2. Bundle. Selling a commoditized product with differentiated ancillary services can appeal to buyers willing to pay a premium for the convenience.
3. Segment. Mature markets are large markets that can be divided profitably into multiple segments. Marketers can focus on providing applications for less price-sensitive customer segments for whom the basic product is still important.
Along the way the industry has tried to slow the impacts of commoditization and some airlines were first movers in introducing product innovations and bundling to counter low prices by trying to appeal to those customers willing to pay for premium products. Or a first mover advantage until another airline added stupid capacity and bundled the same products all in the name of innovation and differentiation.
But segmenting proved brutally difficult when a seat was just a seat. The U.S. is a mature market that historically has been drunk on capacity. Why? The only way to increase traffic and revenue share is to add capacity at the expense of the competition. Until 2023, the view that a seat was just a ubiquitous something never really allowed for large markets - or any market - to be divided into multiple segments let alone be divided into illusory profitable segments.
ONLY NOW - OR POST CY2022 - ARE REAL ATTEMPTS TO PROFITABLY SEGMENT TRAFFIC AT MORE THAN 250+ COMMERCIAL AIRPORTS WITH RELEVANCE BEING TRIED.
Why? There is little choice. And that begins with understanding what customers you do not want. In order to achieve this critical element in segmentation, Delta a long time ago and United created Basic Economy - a limited number of seats per departure that matched fare and offered limited rewards as well. But also, could result in the consumer to say I might pay a little more and try a seat with more benefits.
THE ULTIMATE TEST OF BASIC ECONOMY v. INCREASED FREQUENCY
I am so over outlets like the Washington Post pointing at Basic Economy as the devil incarnate. Why is it the devil when a competitive weapon was created to thwart low-cost airline incursions into your network? The Value Airline sector for some has been enabled most by traffic spilled by network airlines when seats were ubiquitous.
Basic Economy is a tool employed by network airlines to appeal to the very traffic base they were willing to spill and feed a sector wanting to capitalize on the inability of the legacy airlines to profitably offer the low same price given they were the higher cost producer.
That just sounds smart to me. You know, that adapt or die thing?
IT’S JUST MATH TO CONSIDER
Let’s assume that Basic Economy is 40 seats per departure that is available on 3-5 network carrier flights per day between thousands of airport pairs. The Value Airline model would offer 200 seats per departure 2 days per week playing on the price of a ticket to win the mind of a marginal air travel consumer.
So, if the network airlines offer 40 seats per departure 4 times per day for 30 days v. 2 departures per week with 200 seats per departure - who is going to win? Or stated another way: The network carriers would offer 40 seats X 4 times per day X 6.5 days per week = 1,040 seats per week. Spirit or Frontier operate 200 seats per departure 2 times per week = 400 seats. 400 seats v. 1,040 seats is one half of the equation. The other half is 640 seats are offered nearly every day and are not limited to Tuesdays and Fridays for example.
Once again, it is just math.
It is critical to always be reminded that the process of de-commoditization requires companies to determine the customers they DO NOT want to target.
THE NEW MATH
Airlines in the Value Airline sector are choosing lanes to operate from. Spirit is in the midst of a massive pullback, and the price of oil will likely mean that there is more to come. Now Frontier says it will offer 400 seats per day to compete with the network airlines offering 160 Basic Economy seats per day or so between a hypothetical airport pair.
That math suggests that Frontier will win based on seat share among the airlines serving that same airport pairs. It is true that the new Frontier will have other seating products available too. But what they do not have available is the entirety of air travel consumer product that Delta and United have to offer.
Therefore, in my mind, relying on seat share calculation as accepted in a world of ubiquitous airline product math will overstate the Value Airline sector potential. The network airlines are now tiering the tiers of product offered while Southwest and the Value Airline sector are just beginning to offer what Delta, United, and Alaska have offered all along.
STOP THE SENSATIONAL CRAP
This is not about airlines hating certain customers. Creating tiers of products and then tiering certain tiers is about revenue maximization per flight and that probably means that some air travel consumers like that author will look elsewhere. This industry is not healthy and those airlines that are seen as the consumer’s champions are the least healthy - except for 2 - and at least 2 have been living off of sale-leaseback proceeds to bolster liquidity. A Fool’s Errand even for Golden Boy Neeleman.
After reading the paragraph above, someone will point out that the industry has made more than $29B between 2022 - 2025. That is true and it equates to a pre-tax profit of 3.3 cents for every revenue dollar. Of the $29B pre-tax profit, the airlines we reference as the Big 3 earned slightly less than $33B - meaning the rest lost money in total. Delta and United earned more than $31B and American $1.5B.
Southwest earned $2.5B in pre-tax profits between 2022 - 2025, or 2.4 cents for each revenue dollar. The Value Airline sector lost nearly $3.5B over the same period or more than 7 cents for each dollar of revenue. Sustainable?
AN OIL QUICK AND DIRTY TO CLOSE
As most data is in, there are 6 large passenger carriers that earned a pre-tax profit in 2025. A back of the envelope check would say that if the price of jet fuel increases by 4 cents, then all of AA’s 2025 pre-tax profits would be extinguished. Per gallon increases to wipe out 2025 pre-tax profits are: 13 cents for Alaska, 26 cents for Southwest, 86 cents for Sun Country, 92 cents for United, and $1.50 for Delta.
Rapidly increasing oil prices are no good for the airline industry. The rapidly increasing and volatile cost of jet fuel after refining costs are included hurt airline companies. But the price of oil is a part of everything that impacts consumer disposable income from fresh produce being delivered to the grocery store and up and down the supply chain.
FINAL THOUGHT
The advent of Basic Economy is truly brilliant. Why should an airline knowingly spill traffic to support the growth of reckless capacity that will directly and indirectly undermine one’s revenue potential. But that is what has happened for nearly 50 years. The business is hard enough without knowingly supporting some lower cost producer’s growth.