American and United Airlines Trying to Compete with Budget Carriers

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Low budget carriers have spooked some of the major airlines.  But that’s good for customers like you and me.

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Various news reports say some of the biggest airlines – United Airlines and American Airlines – are set to compete more closely with the lower priced, no-frills airlines.

Here’s more information from Bloomberg News:

“By year-end, the pair plans to lure budget travelers with basic-economy fares — inexpensive tickets that don’t include typical benefits like an assigned seat before you get to the airport. Taking a cue from Delta Air Lines, the carriers also hope that once the new fares draw attention, the bare-bones features will prompt some customers to “buy up” to a pricier choice, aviation consultants said.

Basic economy is one prong of a broader effort by the largest U.S. carriers to bolster revenue from each seat flown a mile, a standard industry measure that has been battered for about a year, partly because of fare wars with discounters such as Spirit Airlines and Frontier Airlines Holdings.”

Some of the reasons why budget airlines, like Spirit and Frontier are cheaper than the bigger airlines is because they tend to charge for things most travelers take for granted. These items include, a printed ticket, assigned seating, snacks and drinks on-board, extra carry-on items.

Bottom Line

Customers want the lowest price. And the major airlines are taking notice and are going the extra mile to give customers what they want.

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Comments

  1. Snacks, drinks, checked bags. All that I understand, but how does it cost an airline $$ to give you an assigned seat?

  2. @smitty, you don’t get it I think. It doesn’t cost the airline much to give you an assigned seat, that’s why it’s pure revenue if you’ll pay for the seat assignment, it’s a revenue stream. Just ask BA 🙂

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