United Airlines to offer ‘basic economy’: seats with even fewer perks
United Airlines is trying to woo budget airline passengers with new “basic economy” fares that will go on sale early next year.
The fare strategy, which United has worked on for months and detailed Tuesday, offers the cheapest seats on a plane in exchange for giving up the few perks that come with standard economy tickets.
The Chicago-based airline isn’t alone in its quest to snare price price-conscious travelers who might otherwise choose low-cost carriers such as Spirit Airlines and Frontier Airlines. Delta Air Lines already offers basic economy fares in some markets, and American Airlines has announced plans for a similar program.
The basic economy fares are part of a group of initiatives expected to increase revenue and control costs to the tune of a combined $4.8 billion by 2020.
United doesn’t want no-frills fares to cheapen its brand, so basic and regular economy fliers will have a similar in-flight experience — no soft drink charges or smaller seats.
But basic economy passengers without elite status won’t get to bring a full-size carry-on bag, just a personal item to stow under a seat. Unlike a regular economy ticket, basic fares can’t be changed or refunded and passengers can’t select a seat in advance.
Basic economy flights also won’t help passengers in United’s frequent flier program reach elite status, though they will still earn miles redeemable for future travel. That’s something that penny-pinching customers who travel once a year might not miss, but that could make loyal United fliers think twice before trading down to cheaper fares.
“Customers have told us that they want more choice, and basic economy delivers just that,” Julia Haywood, United’s executive vice president and chief commercial officer, said in a statement. “By offering low fares while also offering the experience of traveling on our outstanding network, with a variety of onboard amenities and great customer service, we are giving our customers an additional travel option from what United offers today.”
United hasn’t said how big a discount passengers will get on the “basic” fares, or whether regular fares would rise. There’s also no limit on the number per flight: Any economy customer will have a choice between a regular and basic fare.
In June, United Continental Holdings Inc. Chief Executive Oscar Munoz said the airline hoped to get an additional $1 billion in revenue by 2018 by better targeting passengers by willingness to pay, using new fares and products aimed at passengers across the spectrum. United will offer entry-level fares for passengers who just want a cheap seat alongside upgrades to persuade travelers who value extra services to pay for perks they want.
That includes Economy Plus seats, which have more legroom, domestic first class and the Polaris international business class that will be introduced Dec. 1. In June, Munoz said United plans to have more of those upgraded seats — increasing the number of Economy Plus seats by 20% and business and first-class seats by 30% — by 2018.
The airline also is considering a new premium economy class for both domestic and international markets, the airline said Tuesday.
The first basic economy fares will go on sale in January for flights departing in the early second quarter and will be available on domestic flights and some shorter routes between the U.S. and Latin America.
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