What to expect from airlines’ new “last” class section

By | March 4th, 2016

A new class of service coming to an aircraft near you: “basic” economy — also known by its street names, “economy minus” or “last class.”

The product, already offered by discount carriers and one major airline, could intensify what critics have called the airline industry’s race to the bottom, an effort to cut amenities and services in order to satisfy bargain-hungry passengers and boost profits. Two more airlines say they’re on the verge of introducing their own version of a “basic” economy fare, and customers are bracing for it.

Until now, economy class passengers on America’s legacy carriers — American Airlines, Delta Air Lines and United Airlines — could expect a minimum level of service and amenities. Those included:

    • Seats with at least 30 inches of “pitch” between them, a rough measure of legroom.
    • The ability to change a reservation after paying a fee.
    • The option to upgrade to a better seat.

That’s about to end. Last year, Delta Air Lines introduced a “basic” economy class fare systemwide, which quietly removed some of the features of a traditional economy class ticket, including the ability to change a ticket, upgrade to a better seat, or secure an advance seat assignment. Delta began testing “basic” fares in 2012.

The two remaining legacy airlines recently announced plans to follow suit. In an earnings call in late October, Scott Kirby, American Airlines’ president, announced the world’s largest carrier had plans to develop “a product that’s competitive on price with ultra-low-cost carriers.”

Kirby said the product would have “less frills” and a “really cheap price.” Last month, American pledged to bring the product to market during the first half of 2016, but declined to offer details.

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Meanwhile, United Airlines announced similar plans, but didn’t indicate when it planned to roll out its new economy class product.

“Over time, we’d like to give customers greater ability to choose fares that offer a varied set of amenities, whether they be fares that include multiple options or deeply discounted fares that would simply include the ticket,” United spokesman Jonathan Guerin said. “This would better permit our customers to choose their own mix of fares and frills, and better enable us to compete with carriers that offer no-frills service.”

What would economy “minus” look like?

Delta’s foray into a reduced economy class product only reveals part of the big picture. When it introduced “basic” economy last year, the airline disclosed an interesting but underreported fact: “Basic” fares were yesterday’s economy class fares — the same tickets that could be changed and upgraded. In other words, Delta didn’t create a new discounted class of fare; it simply removed some of the amenities from its existing economy class tickets.

Delta suggested it’s is just giving price-conscious customers what they want.

“It’s popular in that it gives customers who are price sensitive but not concerned with seat choice exactly what they are looking for,” said Anthony Black, a Delta spokesman. “Customers enjoy knowing with Delta Basic Economy they’re getting a competitive price, free sodas and coffee, snacks, movies, SkyMiles and Delta’s excellent operational service.”

Delta didn’t go as far as some observers expected, which is to create another class of service in the back of the plane that consumer advocates have referred to as economy “minus.” Instead, the airline announced it was remodeling its economy class sections, to the relief of many passengers.

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But the concept of a stripped-down coach class section isn’t far-fetched, and Delta may yet try it. The “ultra” low-cost carriers Kirby referred to in his conference call, Spirit Airlines and Allegiant Air, operate aircraft with up to two inches less legroom which, while legal, is widely considered to be on the fringe of humane.

The new economy class

Major airlines like American, Delta and United are testing their passengers’ limits.

Are travelers willing to sacrifice the ability to change a ticket or get an advance seat assignment for the same low economy class fare they used to pay? Delta’s experience suggests the answer is “yes.”

Are they willing to put up with less legroom or the ability to carry a bag on the plane in exchange for a small discount? Allegiant’s and Spirit’s experience suggests the answer is also “yes.”

It would be hard to imagine the new economy “minus” section looking much different from this:

✓ The industry’s smallest airline seats — between 28 and 30 inches of seat pitch.

✓ No itinerary changes or refunds.

✓ No “free” carry-on bag.

✓ Meals, snacks, sodas and entertainment are extra.

✓ No advance seat assignments.

While the new economy class sections are likely to appeal to some passengers, they will probably come as a troubling development to a majority of air travelers. In his comments to investors, Kirby suggested that more than half of American’s passengers would be willing to book a “basic” ticket because they are not frequent travelers, aren’t interested in a premium product, don’t want to pay for the American brand, and are not necessarily interested in a “better” experience. But that doesn’t necessarily mean they desire a bare-bones version of economy class that competes with the two airlines with the worst customer-service reputations in the business.

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Observers are also worried that the expansion of “basic” economy class products could, over time, widen an already significant class divide in the air. Major airlines have already moved the seats closer together; at times, in order to install more luxurious, lie-flat seats in the front. And while passengers generally don’t have a problem paying more for a better seat, they’re uncomfortable with being punished because they wanted to pay less.

New "basic" economy sections are:

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