The “World’s Largest Airline” American Airlines is preparing for another fight as it is now planning on competing with low-cost carriers for the attention of budget travelers. Apparently, American is set to introduce “less frills” fare in 2016.
The Daytona Beach News-Journal has learned American Airlines is setting its sights on offering the no-frills and very affordable fares that discount carriers are offering in hopes of boosting its profit.
American Airline is believed to be armoring itself to fight back against small but really fast-growing airline competitors like Frontier Airlines, Spirit Airlines and even Europe's Norwegian and Mexico's Volaris. Though both provide "poor service," they still get much attention among travelers because of their really cheap fares.
American president Scott Kirby noted recently that although most of their frequent customers fly with their premium packages, about 87 percent of them only fly at least once in a year. Kirby also noted that fliers purchase tickets based off of price.
Because of these, Kirby said that they "have to compete for them. We can't just walk away from that size of the business."
Kirby made such statements during his and his fellow associates announcement to analysts last Friday.
Starting 2016, American Airlines is going to offer "less frills" fares or tickets which are really cheap and can compete with those of the discount carriers.
As per TravelPulse, this type of fare approach is similar to Delta's "Basic Economy" fares which were introduced three years ago. This type of fairs is non-refundable and does not provide seat assignments until the customer has checked in.
With this approach, American Airlines is hoping that they'll be able to beat Spirit Airlines which is now a big name among 24 markets, especially in Chicago where it is serving nonstop flights to about 20 destinations.
"Spirit at DFW (Dallas/Fort Worth) is our No. 2 competitor - they are larger than either Delta or United," Kirby said.
The news comes amid American Airlines commendable third-quarter profit after it dropped the amount its spending. The net income of the airline reportedly jumped 80 percent to $1.06 billion, according to NewsOn6.
It also comes after the finalization of American's merger with US Airlines which took place on Saturday. On Friday, after the last US Airways flight departed, the remaining signages of the company at the airport were replaced.
Despite the merger, the company assured fliers that only a few changes will be seen in terms of the service they provide, as noted by Dispatch Times.
