Money Delta will expand basic economy worldwide next year

05:45  12 october  2017
05:45  12 october  2017 Source:   CNBC

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No advance seat assignments. No upgrades. No same-day ticket changes. A lot of passengers don't like basic economy , airlines' no-frills product. That's exactly why Delta Air Lines is taking it global next year .

Today, Delta 's Basic Economy category is available from four Delta hubs (Atlanta, Detroit, Minneapolis, Salt Lake City) and 33 gateways, and it's about to get more A Delta spokesperson told Businessweek that the Basic Economy category could expand to more cities next year .

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No advance seat assignments. No upgrades. No same-day ticket changes. A lot of passengers don't like basic economy, airlines' no-frills product. That's exactly why Delta Air Lines is taking it global next year.

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Delta reported today that its new Basic Economy fares, which offer lower prices, no ticket changes, and seat assignments only after check-in, generated million in incremental revenue in the first quarter, and the airline plans to expand the service to new U.S. markets.

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Given the choice, half of Delta passengers who are considering basic economy pay for the regular main cabin fare, the No. 2 U.S. airline's CEO, Ed Bastian, told CNBC. Regular economy tickets on the carrier cost about $30 to $40 more than basic economy.

Bastian's estimate on passengers' opting for the more expensive main cabin fare echoed what American Airlines revealed last month.

Delta launched basic economy in 2012. Competitors United and American launched their own versions this year, taking it a step further by prohibiting basic economy passengers from using overhead bins.

Delta Airlines planes taxi at Hartsfield-Jackson Atlanta International Airport in Atlanta, GA, © Provided by CNBC Delta Airlines planes taxi at Hartsfield-Jackson Atlanta International Airport in Atlanta, GA,

Many customers don't want basic economy "when they see what exactly it is," Delta's president, Glen Hauenstein, told investors Wednesday.

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However, we’ve slowly seen Basic Economy fares spread, to the point that Basic Economy fares now seem to be available for select transatlantic flights as of next summer. Via Points, Miles & Martinis, Delta is selling Basic Economy fares between Salt Lake City and Paris, and this offering will expand

Delta , American and United are in the process of either rolling out or expanding a low-cost fare called “ basic economy ” — as a way to compete with discount airlines like Spirit and Frontier.

"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 product," he said, after the company reported better-than-expected profits for a quarter plagued by deadly hurricanes. "And that's really where we're focused."

The upsell is important for airlines because they are trying to at once compete with low-cost carriers such as Spirit and wring more money from passengers. U.S. airlines took in more than $4 billion from checked-baggage fees last year, for example.

On the other end of coach, Delta is also offering premium economy seats, which offer more legroom and Tumi amenities kits.

Google's new browser experiment lets you learn about basic AI .
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