Business and financeGulliver

“Last class” is here to stay on America’s airlines

Back in February United and American Airlines announced they were joining Delta Air Lines in introducing“basic economy”, a new class of fare below standard. This doesn’t mean sitting even farther back in the plane, but it removes the few perks that economy passengers still enjoy, chiefly the ability to select one’s seat before checking in (and to ensure that parties travelling together could sit together). 

The early reviews were universally negative—except for the only one that counts. Because basic economy, it seems, is quite profitable for the airlines. Delta, which introduced basic economy on a limited scale in 2012 and announced an expansion last year, has now released a report on its financials. In the first three months of this year, the airline says, basic economy earned Delta an additional $20m in revenue. Delta is planning to expand the fare class beyond the roughly 1,650 routes (8% of the airline’s total routes) it currently serves. Once United and American introduce it later this year, it’ll become a relatively standard feature of flying on US carriers.

That news is likely to be met with further groans…Continue reading

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