CHICAGO, Nov. 17 (UPI) — In an effort to compete with low-cost airlines offering cheap, no frills flights, United Airlines announced it will offer a new, cheaper fare next year that eliminates any carry-on luggage that does not fit under a seat.
Hoping to compete better with low-cost airlines such as Spirit Airlines and Frontier Airlines, United said Tuesday it would start offering a “basic economy” level in 2017 that offers cheaper seats on flights but takes away perks associated with “economy” seats.
In addition to the carry-on restriction, customers who opt for basic economy will no longer be able to choose their seat ahead of time, cannot change a flight or receive a refund and frequent flier points earned from the fares won’t count toward “elite status,” which carries extra perks for those who achieve it regardless of the type of fare they purchase.
The move comes as airlines such as Spirit, Frontier and Allegiant Airlines have gained traction among customers who are cost conscious with cheap fare, but few perks. Delta Airlines already is offering fares similar to United’s basic economy offering, and American Airlines is expected to unveil its own version sometime next year.
About half of United Airlines’ revenues come from the 85 percent of people who fly an average of once per year and are most concerned about price, said United Airlines President Scott Kirby, making the potential for retaining and growing the company’s share of low-cost customers important to its bottom line.
“It’s not surprising that they’re getting into the game now that they needed to do it,” Emily Fisher, a spokesperson for Cheapflights.com, told CBS News. “You may not be able to pick your seat until the last minute, and you may have other places where they cut their corners with you, but at least when you’re on the plane you’re going to get the same experience as the other customers.”
While the in-flight experience of basic economy passengers will be similar regular economy passengers — soft drinks will not carry a charge, food will be available in flights where it already was and customers will be able to purchase access to Wi-Fi — the carry-on rule may raise some concern.
Analysts say United will likely have to mount an aggressive marketing campaign with customers as they purchase tickets, and afterward, to make sure they are aware of the carry-on restrictions, which are likely to anger those who don’t pay attention to them.