Let’s say a meeting runs late, or a late-afternoon meeting is canceled? A Business Traveler on a basic economy would have to purchase a whole new ticket at the last minute, which are among the highest fares. That means that the cheapest fares can end up costing companies a lot.
In December 2016, about two-thirds of American Express Global Business Travel’s clients opted to block basic economy, the company said. That rose to 75 percent by July 2017.
That shift occurred as United Airlines and American Airlines joined Delta in rolling out basic economy airfares. The no-frills fare offered by American and United prohibits passengers from using overhead bins on domestic flights.
Egencia, the corporate travel platform of Expedia, said none of its clients display basic economy fares to their employees.
The company estimates that about 11 percent of Business travel changes mid-trip.
SAP Concur, which has more than 38,000 customers, estimates that about 42 percent of its clients worldwide have blocked basic economy fares.
Corporate travel managers and travelers themselves who travel internationally aren’t exempt. American, Delta and several of its European partners recently unveiled basic economy fares for transatlantic flights, which include fees for checked bags.
At a J.P. Morgan Chase conference on Tuesday, Delta’s president, Glen Hauenstein, said most of the airline’s corporate clients have walled off basic economy fares and that it’s focused on the next level of upsell: to Comfort+, seats with more legroom that he estimates cost about $30 to $40 more per segment than regular economy.
Jamie Baker, an airline analyst at J.P. Morgan, said basic economy fares at the bank are “walled off. That fare is dead to me.”
Source : CNBC