Ah, basic economy. It seems like the great equalizer: equally miserable for everyone.  

That's why, when American Airlines announced a new change that should make basic economy a little less uncomfortable, people reacted with surprise and even joy.

But then, in the next breath, American Airlines revealed the cynical train of thought that prompted them to do it. Order was restored, imbalances were balanced. Basic economy went back to sucking.

The reasoning behind American Airlines's change is both complicated and ultimately comical--what more could you expect? So, here's the change, and the cynical reasoning.

Free bags for everyone!

First the good news. Starting Sept. 5, the day after Labor Day, American Airlines will allow basic economy passengers to bring a carry on bag aboard the plane.

Not a checked bag, of course; this is just to allow basic economy proles to carry aboard something other than a small personal item like a purse or a computer bag.

My colleague Chris Matyszczyk reported on this when it was just a rumor. Now the airline confirmed it in a recent presentation to reporters. 

The change brings American closer in line with the basic economy offering on Delta Air Lines. And you might think this means passengers will be just a little bit more comfortable in basic economy, and a little bit happier with American Airlines.

Yeah, you might think that. In fact, it would appear that's exactly what American Airlines wants you to think.

But there's more to it.

The art of the upsell

Airfares are complicated now. For example, American Airlines doesn't judge basic economy based on how many tickets it sells.

In our upside down world, it judges basic economy on how many tickets it doesn't sell.

They're intended as a loss leader, if you will. The idea is to present you with a rock bottom fare during your dutiful Internet searches--something that looks like it competes with all the other rock bottom fares (including those from the rock bottom service airlines, like say, Spirit).

But then, once you've selected a flight and settled into booking, you realize the restrictions: No seat assignment ahead of time. At least $25 to check your first bag. No same-day changes or standby, and no chance of an upgrade.

And so you start to look at the add-ons, and the higher-priced fares. Or perhaps you don't, and on the day of your flight you find yourself paying more to check bags. You're already deep into the process with American, so 60 percent of passengers stick with it, but find a way to spend more.

Now, American says it's realized that it needs to "make our short-haul Basic Economy fares more competitive with airlines that include a carry-on bag in their lowest fares."

But it's willing to do so, because it's done the math on upsell rates, according Kurt Stache, American's senior V.P. of marketing, loyalty and sales.

"There are other features of that product that we think will continue to provide us sell-up rates. We think it will be in the 50 percent range," he told reporters at the Boyd Group International Aviation Forecast Summit in Denver, according to CNBC.

Actually, if you compare the 60 percent upsell rate now to the number American Airlines president Robert Isom quoted to investors a year ago, it looks like American is actually doing better than it had planned.

"When customers are offered a basic economy fare and also see the main cabin product, 50 percent are buying up from that offering," he said a year ago. Now they think that's where they'll be even with the free carry on bag included.

Exactly where we were before all this started: Equal misery for everyone who thinks of buying basic economy.

Published on: Aug 25, 2018
Like this column? Sign up to subscribe to email alerts and you'll never miss a post.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.