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Last year, Delta Air Lines broke the model for typical legacy pricing structures by developing and selling a new type of fare that would compete with ultra low cost carriers (LCCs) like Spirit and Frontier.
Called Basic Economy fares, the product sold by Delta included transit from point A to point B and little more than that, restricting seat selections, checked bags and any elite perks.
Initially launched on routes that directly compete with LCCs, Delta’s Basic Economy fares have been creeping into a larger part of the airline’s network including international routes. Now, as they hinted at late last year, American and United have announced plans to follow suit and develop their own Basic Economy fares.
Word initially came from American’s CEO Doug Parker at The JP Morgan Aviation, Transportation & Industrials Conference this week that the changes were officially in the pipeline.
According to Parker, American plans to incorporate Basic Economy fares in a similar guise to Delta’s fares in the second half of 2016. As with competing products, the fares would also not include free upgrades or other elite perks, though it’s not yet clear what routes will be affected.
Curiously, at that very same conference United Airlines announced similar intentions to modify its fare structures. That airline plans to brand its product as “Entry Level” fares, however the offering (or lack thereof) would effectively be identical to that of Delta and American. United put no timetable to their launch plans.
With the upcoming changes to American and United, all three legacy carriers will soon offer a no-perks economy fare while budget frequent flyers, in turn, will have no options for purchasing deeply discounted tickets and still extracting perks. And while it’s a lucrative change for the airlines and premium travelers, unrest among budget travelers may start to grow. With no alternative airline to find refuge in, however, the budget travel community may finally be out of luck.