The Evolution of Basic Economy – an Update

A Window into the Competitive Playbooks of the Airlines

Low Cost Carriers were a thorn in the side of the legacy carriers long before the industry felt the need to add the term “Ultra”. With networks built on maximizing revenue through connectivity, the legacy carriers became prime targets of low cost airlines who could fly point-to-point for low fares with their low cost structure. Starting with the original PSA and Southwest, low cost carriers required response from the legacy carriers. It is from these early responses that we first saw restrictions such as the Saturday night stay, and 14-day advanced purchase. As the first generations of LCCs age, the latest iterations required a designator to differentiate. The new LCCs that grew to presence in the 2010’s includes airlines such as Allegiant, Frontier, and Spirit, all with costs even lower than the traditional LCCs, and thereby earning the title Ultra Low Cost Carriers. The greatest impact has been felt by […]

Can We Declare Basic Economy a Success? – A Visual Approach

It has been over a year since Basic Economy made its way onto the industry vocabulary list.  While the impetus was to provide a no-frills fare class to compete with the ULCCs, what excited the airlines (and Wall Street) was the ability to increase fares for those not willing to put up with the Basic Economy level of service.  Delta President, Glen Hauenstein put it succinctly when he explained in a CNBC interview, “Really the success of that product isn’t how many people buy it, in our mind, but how many people don’t buy it and choose another…”  In a nutshell, the idea of Basic Economy is to convince customers to not buy it; rather, to pay for the higher fare. Did Basic Economy live up to the expectations of producing higher fares while maintaining a competitive offering with the ULCCs? American, Delta, and United all rolled-out their various forms […]