Originally Posted by
jsloan
You're assuming there will be a reduction. UA is already matching prices with LCCs, or nearly so, on a lot of routes -- currently, they tend to use the G fares for that.
To the contrary, I expect that UA will raise fares across the board, and then introduce the N fares at the previous price point. They can do this as far up the fare ladder as they like. People who want the benefits of the regular fare -- e.g., E+ -- will have to eat the difference.
Yes. Anyone who thinks this is going to result in lower overall fares doesn't understand the business motivation here. UA is not just being nice to it's customers that don't need assigned seats and carry-ons. Either they raise rates across the board and the BE equals the current lowest (already competing with the with LCC's but with more benefits today) or they make up the difference in what I'm calling "required ancillary revenue", meaning most BE folks will have to check a bag now. Basically they become agnostic as to whether a customer buys a BE fare or the next higher fare.
The planes are full today, they're not trying to grab market share by luring LCC customers. They're trying to increase the revenue and margin on these flights where they've had to lower fares.