Ultra-discount carriers like Spirit Airlines, Frontier Airlines and JetBlue Airways have made the going tough for U.S. legacy airlines. Considering the competition to be getting fiercer by the day, American Airlines and United Continental have decided to strike back in their own typical way by offering no-frills, cheap tickets to the customers.
Media reports recently said that the Big Two (American Airlines and United Continental) are devising strategy aimed at attracting budget travelers by introducing basic economy fares by the end of 2016. The reports said that the tickets would be inexpensive and won’t include benefits such as an assigned seat before getting to the airport.
The two carriers would emulate Delta Air Lines with the fervent hope that the launch of new fares and bare-bones features would go a long way in prompting the budget-conscious travelers to ultimately go in for no-frills fares.
Travel experts say that the two largest U.S. carriers by resorting to basic economy fares are looking towards bolstering their revenues by filling up each seat. The fare wars unleashed by leading discount carriers such as Frontier Airlines and Spirit Airlines have hampered the interests of the Big Two and made a major dent in their earnings.
The reports said that the details of basic economy fares are still being worked by American Airlines and United Continental. It is expected that the some restrictions would be applicable on new no-frills fares such as no prior seat assignments before reaching airport, no refunds, no changes and no tickets upgrades.
A recent study said that American Airlines reported a decline of revenue for each seat flown by 8.9 percent during Q1 2016 as compared to the same period last year. Similarly, United Continental also said that its passenger revenue also declines by 7.4 percent during the same period.
Meanwhile, Spirit Airlines has announced it is planning to increase its capacity by 65 percent in 2016 in Los Angeles, which is a major hub of American Airlines. Frontier Airlines has also indicated that it is planning to boost its capacity by 12 percent in Denver, which is an important hub of United Continental.
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