Tuesday, outgoing CEO Mark Dunkerley made a surprising statement: Hawaiian Airlines considers Basic Economy.
The scourge of the Airline industry may be making its way to Hawaii’s largest locally-based airline. According to the Pacific Business News, outgoing CEO Mark Dunkerley stated that the Airline is considering a basic economy fare. Of course, my immediate response to this (in my mind, anyway) was “oh hell no!! Why, Hawaiian? Why on earth would you consider this?” To Dunkerley’s credit, though, he’s concerned that doing so will insult the Hawaiian’s passengers. After all, Hawaiian is primarily a leisure carrier.
What is Basic Economy?
For those of you that don’t know, basic economy is touted by the legacies as a way to compete with ultra-low-cost carriers (ULCCs) like Spirit. In practice, though, that isn’t always the case. In fact, there is much commentary out there saying that the airlines did what I feared would happen: basic economy simply replaced the previous lowest rate and all other fare levels went up. This is especially true for routes in which the legacies do not compete with the ULCCs.
What precisely basic economy means for passengers, though, varies by airline. United has, by far, the most egregious basic economy fare:
- no seat selection
- carry-on limited to one personal item (must fit under the seat in front of you)
- flight changes and refunds aren’t allowed
- MileagePlus members will earn miles, but won’t earn PQDs, PQMs, or PQS’, nor will they earn lifetime miles
- Members will also give up complimentary Economy Plus seating and upgrades (paid or not) of any sort
What’s even more stupid is that passengers traveling without a checked bag aren’t allowed to check in online. Only if you declare that you’ll be checking a bag and pay the fee, or if you qualify under MileagePlus for a carry-on will you have the ability to check-in online. This insane restriction is to ensure that basic economy fliers don’t bring a full-size carry-on bag aboard.
Other Examples of Basic Economy
For its part, American’s basic economy fare is similar to United, which is one of the many reasons why I’m avoiding flying with them. The difference for American fliers, though, is that you board in the last group unless you’re an AAdvantage elite. However, AAdvantage members, in general, will still earn miles, EQDs, EQMs, and EQS’. EQDs will accrue at the standard rate, but EQM and EQS earnings will be half the standard rate. AAdvantage Elite members will also keep their priority boarding benefit, and can bring a full-size carry-on aboard.
Delta’s basic economy, which ironically is the first one too, is by far the least restrictive. Like American and United, Delta passengers may not receive upgrades of any sort and are not able to select their own seat. Further, paid extra add-on and elite member priority boarding will not be available, and all basic economy fares will board in the last group. But, Delta passengers can bring a full-size carry-on, unlike the other two legacies. The other big difference with Delta’s product? Passengers flying in this class of service on international routes must pay for their first checked bag.
My Take on a Hawaiian Air Basic Economy
To me, the fact that Hawaiian is even considering a basic economy product is out of left field. The carrier has been doing well and has even seen a rise in revenues thanks to its Extra Comfort product. They pride themselves on being somewhat of a premium airline with complimentary meal service and the motto “Hawaii starts here.”
However, I think Hawaiian’s management is concerned. Though they say they’re not threatened by Southwest’s entry into the Hawaii market, I believe they are. And, in my opinion, the discussion concerning basic economy is centered around finding a solution to this possible threat. It may also be a plan to help fend off any new entrants into the interisland market, whether it be Southwest or not since Hawaiian now has a virtual monopoly on the market.
If Hawaiian is approaching this strategy as another way to build revenue as American and United have, though, I think it’ll create the animosity it’s trying to avoid. It’s an unpopular product with the legacies, and passengers are catching on to the sham its turned out to be.
Hawaiian Airlines Considers Basic Economy, Final Thoughts
This talk about basic economy at Hawaiian is disturbing to me. It’s not a product I want to see implemented at the Airline, nor is it one that I think fits with its brand. Hawaiian says it’s about hospitality and the spirit of the islands. And if it’s going to stay true to that philosophy, then adopting what’s seen as a bait-and-switch product is a HUGE mistake. So I hope Hawaiian concludes that this product is for them. Basic economy, in my opinion, should be a contingency strategy for them in case of significant marketplace disruption. It shouldn’t become a new normal. But if Hawaiian does implement a basic economy product, I’ll be sure to vote with my money and take my business elsewhere when practical.