Is Basic Economy coming to transatlantic flights?
Glen Hauenstein, president of Delta Air Lines, hinted as much in the carrier’s third-quarter earnings call. Low-cost carriers such as Norwegian and Wow present “some of the most unique competitive dynamics, and we need to adapt our model,” he said.
One approach is “to continue to leverage our existing joint ventures and seek new partners as we have done recently with Jet Airways, in addition to carefully managing our capacity in the region,” Hauenstein said. Delta and Air France-KLM recently expanded their code-sharing agreement with the Indian carrier to connect North American and European passengers with India via Amsterdam and Paris.
But another weapon in the arsenal is Basic Economy, a product that Delta developed for domestic markets in which it competes with Spirit Airlines. It is highly restricted: Unlike a typical low-cost carrier fare, it does not allow the passenger to “buy up” to additional comfort with ancillary products.
If you buy Delta’s Basic Economy, you buy the right to board the aircraft. You cannot select a seat; it will be assigned after check-in, which almost ensures a middle seat. The ticket cannot be changed. Elite status passengers who buy Basic are not eligible for paid or complimentary Medallion upgrades.
Otherwise, Basic Economy passengers receive the same beverage, snacks and entertainment options as regular economy passengers do, at least in the existing domestic product.
“I think we have to look at our entire service offering and ensure that we’re supplying what the market wants to buy,” Hauenstein said. “What we know is Delta has a very, very strong brand and much stronger than some of the ULCCs, and that people would prefer to fly with us than they would on some of the unknown non-brand names. But in many cases we don't have similar configuration, mixes, product offerings, and I think that’s where we’re going to be looking.”
The configuration is, apparently, open to experimentation.
“It includes all kinds of fare products,” Hauenstein said. “It includes cabins we don’t have today. I think that’s the exercise we’re going through, to see what do people really want to buy and what are they paying for it. It’s not providing something that Delta wants to provide, but providing something customers want to buy.”