The big airlines have jumped into the “basic economy” market, competing with the super-cheap airlines that cater to the most frugal passengers.
Within hours of each other, American and United announced that they had begun selling basic economy fares that push down the price of a ticket. The lower price can come with caveats, however, including having to pay extra for space in the overhead bin, boarding last and not having the option to pre-select seats when booking the tickets.
Analysts said the big airlines are going after the low-priced market more aggressively after watching the upstarts become so successful.
“The Spirits and Frontiers have gotten so much bigger,” said Kris Kelley, an analyst at Janus Capital Group. “Now they are formidable competition that the big three carriers [American, United Continental, Delta] have to somehow deal with in their markets.”
Low-priced Spirit, Allegiant and Frontier airlines have corralled a big chunk of the low-cost travelers by emphasizing prices that historically are less than what the cheapest major airlines can offer. The low-cost competitors have thrived by reducing frills to a minimum, packing in more seats, reducing time at the gate and keeping the planes in the air longer than their larger counterparts.
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