American Airlines' new basic economy brings higher fares for all, analyst says

American Airlines' new basic economy fares are working as envisioned, providing a boost not only to the carrier's main cabin fares but also to the fares charged by competitors, according to an airline analyst's review. "If network airlines can pull this off in larger scale, which we think they can, it is a potentially enormous synthetic fare increase -- though it will take time," Wolfe Research airline analyst Hunter Keay wrote in a report. "It also makes some of this new capacity growth even more tolerable. Keay said he tracked American's basic economy fares in 10 markets every day for 5 weeks. He found that in the week to 2 weeks before travel, the availability of basic economy fares diminished and the level of main cabin fares "increased sharply." In fact, he said, American's lowest priced main cabin fares rose by an average of 117% during the period. <br/>