People preoccupied with finding cheap traveloptions, such as cheapairplane tickets, discounttravel deals, and cheap vacation packages, areincreasingly finding that legacy airlines (namely, American, Delta, and United)are offering airfares that are competitive with so called low-cost competitors.
Unbundled or no frill fares that provide passengers with abasic airline seat with no baggage, upgrade or airport privileges have been thecornerstone and a point of differentiation in the past of low-cost airlineslike Spirit and Frontier Airlines.
The movement to no frill fares by legacy airlines startedlast year when Delta Air Lines announced its intention to directly compete withSpirit on a variety of routes. BasicEconomy fares were introduced which strips passengers who purchase thesetickets of complimentary and paid upgrades, same day confirmed and same daystandby flights, the ability to purchase priority boarding, or make any changesto a reservation. Deltas aim is to cutservices the airline has offered in the past to match the sunk costs oflow-cost competitors.
United Airlines is following Deltas lead and has announcedit will launch a stripped down economy fare later this year described as anentry level fare that will appeal to the purely price sensitivecustomer. The airline claims that it isintroducing such fares to compete with ultra-low cost airlines for passengerslooking for that price point.
United passengers will be given the opportunity to upgradeto Economy Plus, which provides for a checked bag as well as morelegroom. A more expensive class of farebeing called Economy Plus Enhance will offer priority boarding and separatecheck in lines.
American Airlines announced in November of 2015 that itwill introduce no frills fares later in 2016. American has said it is coming out with these fares to compete with theultra-low cost airlines.
Depending on how the basic economy fares are implemented byUnited and American, their elite passengers may respond poorly. Today even the cheapest of paid coach fareson American and United are eligible for complimentary upgrades and free checkedbags for their elite passengers.
If these perks are taken away, even more negative customersentiment may arise after the fresh merger at American and a rough year ofoperations at United.
While it is not yet evident which routes the basic economyfares will be introduced on, it is likely that American and United will followDeltas lead and only offer such fares on routes that directly compete withother low cost carriers. Elitepassengers flying out of Denver, Fort Lauderdale and Detroit, three low costcarrier strongholds, should be concerned.
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