Could major US airline create an economy minus cabin?

Rotation

A US legacy airline is shopping around the idea that it’s planning to create an “economy minus” cabin in a move to a new model of domestic four-class service.

RGN spoke extensively and off the record with the airline at the recent APEX Expo in Anaheim, California. The front-to-back domestic US model mooted to us would comprise a premium cabin, enhanced economy, regular economy and “economy minus” offering.

The big economy change — which may well be a fishing expedition to provoke comment in the industry or see whether its two primary competitors are interested in showing their hands — would be truly groundbreaking if implemented. Economy would come in three flavors – enhanced economy with around the 35-38” pitch range, regular economy at 30-31”, and the new “economy minus” at 30” and below.

Some US carriers are already quietly offering an “economy minus”-type product similar to what the airline is mooting.

Frontier Airlines has been at the forefront of this trend, providing amenities most other airlines include in every economy fare exclusively for passengers booking through the airline’s own website. Delta, similarly, launched a Basic Economy fare in 2012, coded as the E fare bucket, lacking any refund or change options whatsoever or any seat choices. Delta this week made further amendments to its Basic Economy fare, with The Points Guy blog noting that the offering now entails:

  • Non-refundable/changeable fares
  • No advance seat selection (prior to the check-in window)
  • No Same Day Confirm or Same Day Standby
  • No Complimentary Medallion Upgrades
  • No Preferred Seating or Economy Comfort
  • No paid upgrades allowed

Meanwhile, overseas, Air New Zealand has experience offering fare families on its flights to Australia and the Pacific Islands, and is experimenting with the “seats to suit” fare family model domestically, where it dominates flight bookings.

The big economy change mooted to us would be a significant change from the status quo where an economy seat sold by the global distribution systems is the same as every other economy seat, so far as pricing and amenities are concerned. A significant part of the value proposition of online travel agents and metasearch engines is that they compare economy fares like-for-like. Any observer of the OTA and meta end of the industry would instantly highlight the exceptions to that rule. Would it be too far to go to suggest that an airline might create a model to profit from those loopholes? If the airline were to distribute the “economy minus” fare as its standard economy option, it would naturally be undercutting its competitors.

If the airline’s concept of US travel came to pass, flyers and the entire airline distribution ecosystem would need to adjust to what this airline hopes will be the new reality. It would be a bold move from a legacy airline that clearly has money to spend battling the bottom-dollar LCCs like Spirit Airlines, which recently announced an eyewateringly yellow livery that has all the hallmarks of an early 2000s Ryanair “cheap and nasty” brand positioning.

Clearly, the full-service airline would hope to leverage its brand positioning — especially the halo effect in in the premium service category, where it advertises extensively — to woo customers who might otherwise be a “hate flyer”, the category that Spirit has cleverly dominated within the US.

For prospective travelers at the cheapest end of the market, the move would reopen the question of whether to travel back of the bus on a legacy carrier, or on a low-cost airline. The passenger experience (#PaxEx on Twitter) will likely be slightly better than an LCC overall, but there will doubtless need to be some differentiation compared with the current state of a “domestic three-class” offering, with first, enhanced economy and regular economy.

Regardless, the airline wouldn’t be making an unprecedented move. Already, carriers are making significant shifts to pull travelers towards their home-brewed ticket distribution systems, which allow for myriad options at the time of purchase, while attempting to reducing their reliance on GDS, metasearch and OTA sources of ticket bookings (though, it should be noted that GDSs still account for 50% of all bookings).

It’s an interesting model — and the airline will be on top of the world if it steals a march on its two primary competitors.

17 Comments

  1. Andrea Gladson

    i sure hope not. As a Captin at a legacy airline this will only intensify the hatred of the flying public while they are on board. We already set them up for a miserable flight from the minute they buy their ticket. The only shining hope is long haul falling where there is space, food and some semblance of comfort on board.

  2. Just to be clear, did the anonymous airline source say the airline would expressly be marketing this product as “economy minus”? Your article appears to imply this, but it seems an incredibly poor choice of words for an airline to choose, unlikely to sell and more likely to annoy customers. Of course, if they use any other marketing approach, as you rightly say, they’ll only be doing what plenty of airlines around the world already do: unbundling the Economy product and giving customers the option to bundle up extra services. The example you include here of Delta’s Basic Economy illustrates this well. Unless you’ve learned that there will be an entirely separate cabin for this leaner product I don’t see the differentiation having any real competitive significance. A separate, tighter cabin cabin at the back would be a bold move, interesting, but would somewhat complicate sales; not because of the booking systems necessarily but, just as when dividing the cabin for any other class, airlines run the risk of getting the demand count wrong and misusing the total revenue space available. Of course, if the airline goes unbundled, to compete with LCCs the point is moot. They’d compete on advertised price with LCCs. Not really an innovation. That’s something Ultra-LCCs, like Spirit, can easily fight against. Spirit has the operating cost advantages to win that battle. Curious to see how this all pans out. Best of luck to whichever airline will take this for a spin. No doubt its legacy competitors will also be watching. It would be amusing to see, if the anonymous airline in question is United. Ted worked so very well for them.

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  8. jeff

    The problem is that we’ll end up with ALL Economy Minus (or “Thrift,” “Super Saver,” or whatever they call it. Worse service and no lower costs. This is a big mistake.

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  10. Tyrell Track Master

    What a wretched, wretched idea. I can only blame the public, however, for being too stupid to understand what they’re getting when they buy trash fares on trash airlines.

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  13. Keith

    This is ridiculous. the federal government needs to step in and stop this. The seats are already based on the body type of the 1950’s. I am 6’0 with a athletic build, not fat just big. It is almost impossible to fly. My last flight from San Diego to DC I couldnt move my legs and had to lean into the window because my shoulders are to wide to fit im my seat. If i needed to evacuate I would have died. Also the chances of blood clots forming during flight has now increased. All because they need the extra room so they can make monry on seat upgrades. Airlines currently make millions of profits from upgrades alone.