April 23--The idea of a no-frills airline ticket that can't be changed or upgraded and probably lands you in a cramped middle seat may sound unappealing, but it is making Delta Air Lines executives happy.
The carrier launched the so-called basic economy fare in 2012 and later expanded it to about 1,650 of Delta's roughly 20,000 domestic routes. It was created to compete with low-cost carriers such as Spirit Airlines and Frontier Airlines, which are threatening to steal budget-minded fliers away from the big carriers.
The airline announced recently that the no-frills ticket has generated $20 million in incremental revenue in the first three months of 2016, and Delta's executives plan to expand the bare-bones ticket to more routes.
"So if you're shopping for just solely price, we want to have a product that can compete effectively and provide the best services against carriers who are providing a much lower quality of service," Glen W. Hauenstein, Delta's chief revenue officer, told analysts. "And I think that's what this is designed for."
Hoping to cash in on the same fliers, American Airlines and United Airlines will introduce later this year a class of ticket that is cheaper and offers even fewer amenities than the regular economy section seats.
James Compton, chief revenue officer for United Continental Holdings, the parent company for United Airlines, told analysts that the new ticket will complement higher-priced tickets that include food, drinks and entertainment but instead "will appeal to the purely price-sensitive customer."
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