Legacies Gather to Undercut Low-Cost Carriers
Joe Cortez September 05, 2017
American, Delta and United set to present plans to compete against Frontier and Spirit.
Five airlines are expected to put their ideas together this week to push back against the expansion of ultra-low-cost competitors Frontier Airlines and Spirit Airlines. Skift reports Alaska Airlines, American Airlines, Delta Air Lines, Southwest Airlines and United Airlines are all expected to present at the Cowen’s 10th Annual Global Transportation Conference, with a focus on discounted airfare.
In the previous year, all three legacy carriers found themselves competing heavily against America’s two ultra-low cost carriers. Since then, all three have launched “basic economy” fares, allowing them to stay competitive against both Frontier and Spirit, despite their growing network.
However, just how long the price holiday will be in effect is yet to be seen. Financial analysts believe that the current state of low fares may not be sustainable, forcing carriers to increase prices to cover costs.
“We believe that […] Spirit is largely responsible for setting the pricing floor in the industry (along with other ultra low cost carriers),” Jamie Barker from J.P. Morgan wrote in a report, as quoted by Skift. “That floor itself could be moved higher without meaningful customer share attrition.”
Until plans to drive fares upward across markets are revealed, flyers can still enjoy low prices aboard legacy carriers. In an interview with Bloomberg, United executive Scott Kirby told Bloomberg United was selling “a handful of seats” for $20 one way, claiming the low-cost carriers could not fight with the legacy airline from inside their own hubs.
What kool-aid are you drinking? The prices of legacy airlines are at all times high. Out of millions of tickets sold someone reports that a "Handful" was sold for $20. Fake sale. Is this the return of the illegal fake sales? There is no competition of any kind in the air. It is a good day if you can buy a next day ticket at all, let alone for an affordable price. It is a good day when you are not booted off the airplane for a crossed-eyed look. Airline price regulation must return. The human rights including human seat pitch, spacing and width must be imposed. The airplanes are unsafe and could not be evacuated in time to save your life. I remember the time when it was not necessary to empty the seats for the window coach passenger to exit. Now even in 1st class window passenger cannot exit.
Hate this. Where is the consideration for flyers who will pay a couple hundred dollars more (yet can't afford first class) for a decent experience?