Skift Take

Nothing seems to be able to stop the commodification of airline travel.

What to Know Now

Stripped down or “basic” economy fares have been growing in popularity over the last few years as the legacy carriers’ mechanism to compete with ultra low-cost carriers like Spirit and Frontier. In a nutshell, the fares strip out all of the what’s left of the benefits of economy air travel and provide a bare bones travel experience, cutting out seat selection options, upgrade benefits, lounge access, mileage benefits and a variety of other services, depending on the fare.

While terrible for general travelers, the airlines see it as the only way to compete with budget carriers — and for whatever it’s worth, they may be right.

So far, Delta has been the only airline to successfully incorporate basic economy fares systemwide. But seeing their success, the other legacies are quickly following suit. In American’s Q3 earnings call, President Scott Kirby all but acknowledged that basic economy fares are coming in 2016. And United, rarely a leader in the innovative fare space, is surely close behind.

All of this points to a rough year ahead for both general travelers and frugal business travelers. Get your miles in now.

Social Quote of the Day

AA has to be very careful that in going after half of their revenue represented by once a year fliers they don’t risk losing the other half represented by their loyal frequent flier base, which they’ve tried so hard to protect and expand, and which they view as on of their strongest competitive advantages. At least it would be my hope that they understand it. It makes no sense to poach fliers from UA and DL only to stick it to them later. But I’m not the one making decisions…

iceman06 @ flyertalk

Finnair Airbus A330 New 05 RGB


Norwegian Air Spends $5 Billion on 38 New Dreamliners: Norwegian Air Shuttle AS agreed to buy 19 Boeing Co. 787-9 planes in the Scandinavian discount carrier’s bid to expand its long-haul fleet fivefold to 38 aircraft in the next five years. Read more at Skift

United Airlines Acting CEO Rejects Notion It Has ‘Lost’ Its Frontline Employees: How significant a momentum loss will United Airlines suffer with the sidelining of CEO Oscar Munoz, who reportedly suffered a heart attack and is on medical leave? Read more at Skift

British Airways’ Parent Wants Another Airline and Finnair Is the Best Target: While the CEO of IAG, British Airways’ parent, Willie Walsh was circumspect answering questions from reporters in Dublin this week about the next airline buy-out for the IAG group, Skift found strong evidence, at the CAPA Summit in Helsinki, that IAG’s next smart buy could be Finnair. Read more at Skift

Southwest Airlines CEO Thinks Its Passenger Experience Is Just Fine: The vast majority of airline CEOs would tell you that they need to focus on improving the passenger experience, but not Gary Kelly, the chairman, president and CEO at contrarian Southwest Airlines. Read more at Skift



American Airlines Is Moving to a New Headquarters Near Its Old One: Airline executives told employees this week that American will build a new home about a 2-mile drive from its current headquarters. American will remain close to its biggest hub, Dallas-Fort Worth International Airport, and keep a Fort Worth address. Read more at Skift

Airport Treats Passengers to Graphic Porn at Baggage Claim: Passengers waiting to pick up their bags in the early morning hours at Lisbon Portela Airport (LIS) were surprised to see graphic pornographic images broadcast on the television monitors over the baggage carousel. Read more at Flyertalk



Airlines and Partners Grapple With What Passengers Say They Want Now: At the IATA World Passenger Summit the focus was decidedly on passenger needs, except when the focus turned to promoting the organization’s new distribution capability (NDC) retailing platform, which was also presented as the ideal way to address changing passenger needs. Read more at Skift

The Future of Food Tourism Goes Beyond the Restaurant Experience: “Dining will be the last form of live entertainment.” This affirmation by Reserve’s CEO Greg Hong last week at Skift Global Forum in Brooklyn represents the trend of experiential travelers engrossed with food and wanting to learn more about how their meals are prepared and where they come from. Read more at Skift

Aloft Tries to Speak Millennial With New Emoji Room Service Ordering: Aloft Manhattan Downtown – Financial District on Wednesday launched TiGi (“Text It. Get It.”) Emoji Room Service Menu, enabling guests to contact the front desk and request services using emoji. Read more at Skift



Starwood Adding DirecTV to Its Suite of In-Room Entertainment in the U.S.: Starwood Hotels & Resorts on Wednesday announced a new partnership with DirecTV, designating it as the company’s preferred provider in the U.S. and giving guests access to DirecTV’s NFL Sunday Ticket, programming for the four major sports leagues, select DVR capabilities, and nearly 100 HD channels. Read more at Skift

InterContinental Hotels Surprises Loyalty Members With Customer Care Number Connecting To Adult Chat Line: So you thought you wanted to check on your reservation with InterContinental Hotels Group, huh? Too bad: if you’re a member of its Spire Elite loyalty program, that customer care number on your card will connect you not to helpful hotel associates, but to an adult chat line promising “interesting and exciting guys” and “hot ladies” who want to talk to you. Read more at Consumerist

Four Seasons Keeps Visitors Wired With Free Wi-Fi Across All Its Properties: Four Seasons rolled out what the brand is referring to as a “new global standard” of Wi-Fi across its hotels around the world, providing guests and customers with complimentary Wi-Fi, accessible by an unlimited number of their personal devices. Read more at Skift

Atmosphere in San Francisco Grows More Hostile for Airbnb as Vote Nears: Travelers worldwide may love using Airbnb to book vacation stays, but the company that revolutionized home-sharing faces a hostile ballot measure in the city where it was founded. Read more at Skift

Your Turn

Legendary travel writer Don George has a new book out called The Way of the Wanderlust. Find it on Amazon here.

Tips and Comments

Can be sent to gm[at]skift[dot]com or to @grantkmartin

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Tags: american airlines, low-cost carriers, skift business newsletter, skift business traveler

Photo credit: Economy seats on an American Air Dreamliner. PRNewsFoto / American Airlines

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