United has no plans to change Basic Economy carry on restrictions

United Airlines continues to maintain its policy of carry on restrictions for Basic Economy fares even as its rivals do not have those constraints in their lowest fare offerings.


Summary:

  • United Airlines will maintain its policy of carry on restrictions for Basic Economy fares;
  • Earlier this year it became the only major to continue with carry on restrictions after American Airlines opted to eliminate the restriction from its Basic Economy offer;
  • United has the most restrictive basic economy offering among the its large global network peers.

Earlier this year American opted to eliminate its carry on restrictions for its Basic Economy fares in order to match Delta’s offering, which has no restrictions on carry on baggage. During 2Q2018, American concluded some of its under performance in unit revenue growth compared with its peers was driven in part by the US domestic market.

United now has the most restrictive basic economy offering among the its large global network peers, charging for carry-on baggage. Despite its decision to maintain the restriction for carry on bags in Basic Economy, United’s passenger unit revenue growth in 3Q2018 grew 6.1%, which was just outside of its forecast of a 4% to 6% increase.

During a recent earnings discussion, United executives were queried about any potential plans to change its carry-on policy for Basic Economy passengers.

“We are happy with where we’re at,” said United chief commercial officer Andrew Nocella. “The way we designed Basic [Economy] was carefully constructed to be, I think, a win for allowing us to segment our products, to allow us to compete effectively against the ultra low cost competitors, and allow our operation to deliver better results for everybody in terms of on time departures.”

Mr Nocella definitively added: “There are no plans to change any policies.”