Monday, June 6, 2016

American and United Ready No-Frills Fares to Take on Discounters

Stung by competition from ultra-discount carriers, American Airlines Group Inc. and United Continental Holdings Inc. are striking back with cheap, no-frills tickets of their own.

By year-end, the pair plans to lure budget travelers with basic-economy fares -- inexpensive tickets that don’t include typical benefits like an assigned seat before you get to the airport. Taking a cue from Delta Air Lines Inc., the carriers also hope that once the new fares draw attention, the bare-bones features will prompt some customers to “buy up” to a pricier choice, aviation consultants said.

Basic economy is one prong of a broader effort by the largest U.S. carriers to bolster revenue from each seat flown a mile, a standard industry measure that has been battered for about a year, partly because of fare wars with discounters such as Spirit Airlines Inc. and Frontier Airlines Holdings Inc. The declines have helped push down the Bloomberg U.S. Airlines Index 17 percent this year through Thursday....

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