Just as they said to expect in January Alaska Airlines announced on their earnings call this morning that they will introduce Basic Economy fares in late fall.
- Customers on these fares will board last
- They will sit at the back of the aircraft
- No elite upgrades
- No changes permitted
They expect customers paying more to avoid these fares to contribute an incremental $100 million in revenue next year.
Alaska’s management notes that in providing advance seat assignments on these new fares they’re meeting their goal of a product that isn’t as bad as competitors, saying “our structure is one that meets the middle ground.” For instance American and United go even farther than Delta — which first introduced Basic Economy — by not permitting customers (without elite status or co-brand credit cards) to bring full size carry on bags onboard when booking one of these fares.
With JetBlue considering Basic Economy, too that would leave Southwest Airlines — which still doesn’t charge change fees or for checked bags — as the only carrier without these restrictions.
You say they’ll “sit in the back of the plane” but later say they will be “providing advance seat assignments on these new fares”. Would you elaborate…
Daniel: my GUESS is he meant they will get to choose their choice of seat from the last X amount of rows.
@Daniel – this means that seats in the front of the plane will be blocked from these fares with only seats in the back able to be selected. Seat selection can still happen in advance – its just limited in the options.
If one can still get miles & bring a carryon this is the way to do basic economy correctly.
Southwest has become largest domestic carrier already. Time to eat the legacy airlines lunch even more. Southwest will dominate. Who would have thought.
If Alaska wants to beat Southwest on the West Coast, this tactic is highly counterproductive.
I had been hoping Alaska would start flying between the Bay Area and LAX and match Southwest’s no-fee policies in that market. That just became irrelevant. Basic Economy cannot compete even if Alaska matched Southwest’s other advantages.
They don’t say seat selection, they say seat assignment. Could mean just assigning seats to BE starting in the back row.
They could own Sea loyalty, but they keep missing what makes them great: nice agents who have flexibility and less nickel and diming. I’m their target market: uncommitted Seattle traveler—but this proves they think there are only bargain hunters and corporate travelers. Southwest wins cause they see the whole continuum.
What a shock!
An airline kills off a competitor, and then copies the playbook from the other (too few) airlines in our country by offering as its “induction” fee (or “Tribute” to borrow the term commonly associated with underworld Racketeers) to become a full member of the industry cartel by converting its business model from seeking to earn customer loyalty by actually being an acclaimed, award winning, “better” airline (something most rational minds agreed was what we used to believe as the work legitimate, and fairer, American businesses model) as it used to be before it eliminated its competitor…
…to joining the despicable, dishonest and shameful “Race to the Bottom” (that virtually everyone agrees is what best and most accurately characterizes current airline business models) where the “competition” among the cartel members is instead defined by who can cheapen and degrade its product as much as possible to better screw passengers as much as possible and get away with it which the caste system that is sub-human class…er “Basic Economy” most assuredly is!!!
Folks, if this isn’t the very definitition of the cancer that afflicts industries and economies where competition is desperately lacking, then nothing will be!
In properly functioning competitive businesses, in other words, those that do not already know in some “magical way” that there’s more than enough money to go around if we all play nice together and basically do nothing that requires any of us to go out there and really compete for business by seeking to actually out-do the other with something better or offering a better overall value to consumers to win their hearts, minds, and most importantly, their business, we wouldn’t be seeing every company racing to offer worse products and worse value to consumers as we’re seeing with our current airlines.
Quite the contrary!
If real competition actually existed, none of these product degradations would be even remotely possible be they shrinking seats packed into knee-cap crushing, no legroom rows aboard planes with loos so small anyone over the age of 10 has to stand/sit sideways to pee and poop, or of course, increasingly worthless frequent flyer miles, just to name a few of the many obvious product degradations and devaluations that are the very essence of the “Race to the Bottom” one would expect to see in non-competitive industries such as cable tv/internet providers, or in other contexts where competition is non-existent such as when one must make the occasional, and unwanted, trip to any Department of Motor Vehicles.
In the past, there were several examples of non-competitive, horrible airlines with names like Aeroflot circa 1975; Cubana during Fidel Castro’s era; or “Bloody Awful” as British Airways was long referred to before Lady Thatcher undertook a concerted effort to remake that awful airline into the “World’s Favourite Airline” until the recent clowns began their effort to bring back “Bloody Awful” the sequel that’s doing everything possible to make BA truly horrible again.
Yep, such is exactly what this move by Alaska Airlines confirms:
An airline kills off its competitor and immediately shifts its business model from seeking to be better for consumers/flyers to one that seeks to screw them as best as possible.
That’s not what the outcome would be in a properly functioning, competitive industry.
Anyone who suggests this is correct and normal behavior in an industry that has properly functioning, meaningful competition, and is not a cartel is either delusional or simply lying.
Watching yet another airline, and a soon to be formerly “good one” at that, join this already desperately non-competitive, and already sick industry, in its pathetic effort to see who can “win” by screwing passengers “better” and get away with it simply confirms not only just how sick the airlines are by perpetrating this fraud on consumers, but just how sick our country itself has now become…
…for when one of its most cherished, and bedrock values, the glory of competition above all as being the best and only way to make things better (instead of worse as our airlines are clearly doing) itself is no longer valued as who we are, and what we stand for as Americans, and instead an arrogant, non-competitive cabal is preferred…
…well, then, we really have lost our way.
That people think actions being taken by companies to consistently devote all of their efforts to see who can worsen and degrade products is emblemantic of who we say we are, or that this anti-competitive behavior is any way, shape, or form “normal” should truly frighten us all.
It really is so sad…so, so terribly sad that there actually are advocates and defenders of businesses whose behaviors and actual products now better resemble those of state-run central economies from the height of the Communist era that virtually everyone regardless of political party affiliation agreed were the types of awful service and undesirable products that were proof itself of the virtues that are only possible in markets/economies that were fervent in their unwavering belief of the benefits that are only possible in countries that zealously believed in freely competitive businesses.
To see some actually defend the cartelization of our airlines, and suggest this is somehow “normal” when it’s most assuredly not boggles the mind.
Our country desperately needs leaders who believe in the virtues of competition in our airline industry (and other industries, too) now more than ever!
…not losers and buffoons who seem to think businesses which define “competition” as a contest to be “won” who can offer the worst products and screw consumers “best” is remotely normal, or actually in our nation’s longer term best interest when both basic economic theory and history itself has proven many times over it’s anything but.
And so, with this announcement by Alaska Airlines, so goes another nail in the coffin for the American consumer and anyone who flies in the coming years until this insanity of allowing a cartel that has hijacked and controls our skies comes to its already long overdue end.
#RosaParksFare ? No thanks.
Bad news.
They could own Sea loyalty, but they keep missing what makes them great