United Airlines' new no-frills fares will prohibit passengers who buy them from using the overhead bins, essentially forbidding standard roll-aboards and duffels. That could make a United co-branded credit card a lot more attractive to fliers.
United announced Nov. 15 that its new "Basic Economy" fares, going on sale in 2017, will limit passengers to carrying on only one personal item that can fit under the seat in front of them. United defines a personal item as a shoulder bag, backpack, laptop bag or other small item that measures no larger than 9 inches by 10 inches by 17 inches. Any other baggage will have to be checked — for a fee.
However, Basic Economy passengers who pay for United flights with a United credit card are exempt from the restrictions, as are elite travelers — MileagePlus Premier members and Star Alliance Gold members. That means they can still use the overhead bins. United cardholders also have the option of checking their first bag for free.
The United℠ Explorer Card has an annual fee of $0 intro for the first year, then $95. Checked bags typically cost $35 each way when you don't prepay, meaning a couple could make up for the card’s annual fee in a single round trip by saving $140 in bag fees.
“If you buy at least two United round-trip tickets per year, getting its credit card has now become a no-brainer,” says NerdWallet credit card and banking expert Sean McQuay. “Generally, airline credit cards make up for the annual fee with the free check-bag benefit, and United has sweetened that benefit further."
While several general travel credit cards offer higher reward rates and more flexible redemption options, airline cards are the only ones to provide free checked bags.
In the copycat airline industry, the restriction on no-frills passengers' carry-on bags could become more widespread, meaning added value for credit cards of other major airlines, all of which offer free checked bags as a perk. Delta Air Lines already offers no-frills fares, although it doesn't restrict overhead bin access. American Airlines plans to add such fares in 2017, but it hasn't offered details.
The luggage limit isn't the only restriction that United Basic Economy fliers will have to contend with. No-frills passengers will also board the plane last, unless they have the airline credit card or elite-flier status. They'll be given whatever seats are left over after higher-fare passengers are assigned seats. That means families and groups on the same Basic Economy itinerary won’t necessarily sit together.
Basic Economy seating is an attempt by United to cater to price-sensitive infrequent fliers and keep them from defecting to ultra-low-price discounters, such as Spirit, Allegiant and Frontier. The news was part of a larger announcement by United, which promised Wall Street it would generate $4.8 billion in additional profits by 2020.