Skift Take

Travel managers are avoiding basic economy fares, and rightfully so. The consensus is that travelers end up paying more over the course of a trip if they go basic economy and have a worse flight experience to boot.

There has been evidence for some time that corporate travel managers at large would not allow their travelers to book basic economy airfares.

Major airlines have designed their basic economy fares to nickel-and-dime passengers, whether they like to admit it or not, which is something travel managers are keen to avoid. It may look good to an employee when they think they are saving a few bucks on a flight, but it comes back to bite the travel manager once that employee pays a bag fee or ponies up to select their seat out of fear of landing in that middle seat.

Research from the Global Business Travel Association (GBTA) and Airlines Reporting Corporation shows the obvious: 63 percent of travel policies ban basic economy bookings completely, while just 13 percent allow them. GBTA polled 186 travel managers and buyers on the subject.

“It’s not surprising to see many business travel programs shying away from basic economy fares,” said Michael W. McCormick, GBTA executive director and chief operating officer. “These fares pose a challenge for travel programs, creating difficulty for spend visibility and comparison shopping when add-ons are factored in. Additionally, travel buyers are increasingly factoring in traveler preference and convenience as they recognize the importance of their role in employee retention and recruitment in a strong economy with low unemployment.”

Premium economy, though, is an entirely different story. Combined, policies that always or sometimes allow premium economy fares accounted for 58 percent of policies. In fact, 79 percent of companies block their employees from finding basic economy fares in their booking tools.

When it comes to add-ons, most policies allow in-flight meals, Wi-Fi access, and extra checked bags. Airport lounge access and early boarding, though, tend not to be allowed unless a traveler used their own loyalty points for them.

Only one-fifth of those polled said their travelers always or often book these add-ons through approved means like a corporate booking tool, so travelers are way more likely to splurge upon check-in or when they arrive at the airport. This is bad news for companies trying to tamp down on extra travel spending.

Oh, and finally, the old trend of gamification looks just about dead; just 3 percent of companies reward travelers with loyalty points for booking airfares that save money. Half of those polled won’t even consider gamification or incentives as an option. One caveat, though, is that this research polled travel managers are from larger companies.

Check out an infographic on the research below.

Download (PDF, 459KB)


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Tags: basic economy, corporate travel, ctir

Photo credit: A promotional image from American Airlines featuring a pair of baggage handlers. 274953

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