Sunday , May 22 2022

Why does the airline not want to fly the basic economy? business



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When purchasing an airline ticket, the old days have already gone to choose between coach and job. In a never-ending endeavor for vast margins, airlines have become more sophisticated traders. In particular, they created a number of travel options in the economy booth – a new, peeled charge, waiting for the most thrilling travelers.

They call it the basic economy.

Only a few years old, the basic wage is now firmly consolidated. Last week, Alaska Air Group began selling its own version and JetBlue Airways is preparing to offer a similar offer in mid-2019. (Southwest Airlines is the only major player to avoid this ultra no-frills fee.)

That is, for those who haven't experienced it yet, the basic economy is different from everything except the luggage compartment: Wages do not allow changes or repayments. Some carriers allow you to select one seat per week (for a fee) before traveling; others do not. Most allow you to use the overhead bin like everyone else; However, United Continental Holdings, does not. Some airlines, such as Alaska and Delta Air Lines, even allow you to travel to elite status in some loyalty programs.

But in the end, everyone on the plane will still know who you are: no matter what airline you fly, if you choose the basic economy, you will finally get the board.

JetBlue President Joanna Geraghty said that basic fees reflect a consumer environment in which many passengers sell at a price. . High-price-conscious travelers have shown they're willing to give up some experience for the lowest possible wage using their wallets, deneyim he wrote in the September JetBlue blog, stating that the carrier was ın at risk for success ".

However, in essence, the phenomenon is marketed by hand. The aim is to bring you together with the rock-bottom price, but in doing so, many people make the basic economy so attractive because of the additional coin to trade to the traditional, now more expensive economy rate. The basic economy also represents elements that seem to be a lasting increase in revenue for airlines often struggling to raise prices.

In the US, Delta pioneered the core economy as a defense measure against low-cost competitors such as Spirit Airlines and Frontier, which have low prices as the basic economy. The idea here was that it provided less benefits, such as the ability to change flights and flights, but to match the routes on unrivaled routes.

Basic economic fees are accompanied by a large industry trend, where the aircraft is divided into several cabins with different possibilities called segmentation. Thus, on the same plane, you can find sections of the economy that have traditional economics, a little more legroom and a premium economy.

The basic economy spread beyond Latin America, the Caribbean and the Atlantic, but has not yet been seen in the longest flights to Asia and South America.

Aki If Norway and WOW Air have offered a $ 99 seat to the US from Tokyo or Buenos Aires, I'm sure we will see the basic economy in these markets, temel said Seth Kaplan, editor of Airline Week magazine. Said. The cost advantage of a low-cost airline narrows on long flights, and as passengers often increase the length of their journey, they consider food and seat duties to be more important. ”It also explains why low-cost, long-distance flying has not been as successful as a low-cost short-distance flight,“ he said.

Alaska has launched a "soft launch" of new, basic economy "savings" wages on the tickets sold to three cities from San Diego earlier this month, with the sale of the full network expected in early December; Protective flights will begin in all markets in early January. The Seattle-based carrier, as the main difference in the rest of the industry, has the chance to choose a seat, even though it has a middle seat behind an airplane.

Some of the choices claimed by an airline officer are not better than anything. "I think it's extremely important for new people," said Andrew Harrison, chief commercial officer in Alaska. Said.

But even for the most inexpensive, most stoic customer, a line should be drawn somewhere. This summer, Texas-based Fort Worth, the world's largest carrier, started to bring a carrying case after realizing that business travelers looking for basic economies were losing their business to Delta, which allowed the bag.

For the success of the airline's marketing strategy? Americans said last month that about 60 percent of customers chose the basic economy fundamentally, but given the change in bag policy, the percentage is expected to be about half.

United is restricting carrying cases for key economy travelers, an endpoint mobilizing airline loans to help airplanes fly faster and continuing departures by schedule. He also sees more people trade more regularly than the American economy because of their more coercive constraints. United doesn't have a plan to change the bag rule, the airline's trade manager, Andrew Nocella, told Wall Street analysts last month.

"The foundation was carefully built to allow us to segment our product, to allow us to effectively compete against ultra-low-cost competitors and to achieve better results for everyone in our time." "And it works as designed, and we are at full speed where we are."

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