United aims at budget travelers with ‘Basic Economy’ fares
ASSOCIATED PRESS
United Airlines CEO Oscar Munoz delivers remarks on June 2, in New York, during a presentation of the carrier’s Polaris service, a new business class product that will become available on trans-Atlantic flights.
NEW YORK >> United Airlines is making a pitch to passengers at both ends of the plane — budget fliers and luxury passengers — as it attempts to boost profits.
The airline announced today that it will sell lower “Basic Economy” fares that don’t let buyers pick seats ahead of time and limit them to a single carry-on bag that fits under the seat. They’ll be the last to board.
The new fares will go on sale in January for flights starting after March, a spokeswoman said.
United hopes the lower fares lure passengers who pick carriers like Spirit and Frontier on price. Delta Air Lines already sells a similar, stripped-down ticket for several years, and American Airlines plans to follow.
Airlines don’t generally speak about pricing, but Delta’s basic economy tickets have been roughly $10 to $30 cheaper — sometimes more — than regular coach tickets on domestic flights.
Meanwhile, the airline plans to begin a new service called Polaris for premium passengers on international routes next month, and may expand it to domestic flights.
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United said it expects those and other changes, coupled with cost controls, will increase profit by $4.8 billion between now and 2020.
United Continental Holdings Inc. also said that it will postpone delivery of 61 of the 65 new Boeing 737 jets that it planned to buy and convert the orders to a new, more fuel-efficient model that Boeing calls the 737 Max. The four jets that United gets next year will be slightly larger planes than it originally ordered. The shuffle will reduce United’s capital spending through 2018 by $1.6 billion.
CEO Oscar Munoz, who became CEO last year, made the comments as United executives outlined their strategy to Wall Street analysts.
United Continental Holdings Inc. shares rose $1.45, or 2.3 percent, to $64.39 in morning trading Tuesday.
On Monday, Warren Buffett’s Berkshire Hathaway Inc. disclosed in a regulatory filing that it had bought stakes in United, American and Delta; Buffett had famously mocked airlines as a terrible investment years ago.
Airline stocks soared in 2013 and 2014 as consolidation reduced the number of competitors. Since then, however, the stocks have fared less well because of falling fares and, especially recently, concern that fuel and labor costs are both heading higher.
11 responses to “United aims at budget travelers with ‘Basic Economy’ fares”
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This is the worst airlines when it comes to customer service and an unwillingness to be flexible.
What do you mean by “flexible?” I’m not sure I understand. When I read the headline however, I had an image in my mind of “Basic Economy” being people secured by cargo nets in the rear of the plane. One of my objections to United service is that First Class these days is much like Coach two decades ago.
If customers choose an airline based simply on the lowest internet fare, expect service to continue downward. Soon planes will resemble cattle cars. I would rather ride in a packed bus in India than fly on United.
Cynical flight attendants already refer to coach as “cattle car class,” fit for only “the great unwashed.”
And some people refuse to admit there is a class system in the United States.
Well, at least the airlines haven’t yet borrowed the term “steerage class” from the steamship days. Too much association, even today, with the hapless passengers aboard the Titanic in 1912 I suppose.
I use to be a loyal United flyer…..no more…..I fly Delta or Hawaiian.
check out http://www.untied.com for the latest complaints about United service.
No overhead luggage. This is BS. Goodbye United. Hawaiian of course is advertise premium seats which are basically what coach always used to be, except it costs more.
Horrible airline. We were a party of six with children and United’s solution to an overnight delayed flight was to fly different ones of us to different layover points on the mainland on the way to our destination. None of their alternatives would have gotten us to our graduation event on time, so we ended up renting a car and driving cross country. Don’t fly United if you can possibly avoid it.
Recently flew on Hawaiian’s Airbus aircraft to Japan and it was very uncomfortable. Seats were hard and stiff plus the TV monitors were bad. Complained to the local travel agency.
It’s on long flights like to Japan that first class seating has a great advantage.