Quantcast

Delta Air Lines confirms plan to introduce 'basic business' class

Qantas launches mammoth Asia flight sale including Bali and Japan
New Update from Air Canada, WestJet, American Airlines, Delta, United, Southwest, Alaska, JetBlue Airways, and Sunwing: Airline Capacity Between Canada and US Slashed as Bookings Plummet Seventy Per Cent
Delta Cuts Two Domestic Routes
United Airlines Technicians Reject ‘Dead on Arrival’ Contract Proposal, Teamsters Say
The State of the Asia Pacific Airline Industry
Spirit Airlines to add Detroit nonstop flight out of Bradley International Airport
Major airline to launch new direct flights from Scotland to North America
Ryanair launches new ‘prime’ membership which saves passengers more than £400 a year
Judge Orders Boeing to Trial on 737 MAX Case
Qantas’ free international Wi-Fi to switch on from next week
The real reason Southwest is charging for bags now
Air France-KLM in ongoing talks with Air Europa on potential stake, CEO says
Frontier Savagely Shades Southwest After They Eliminated Longstanding Free Bag Policy, Sparking Backlash
Frontier Wants You to 'Divorce Your Old Airline' After Southwest Changes
Delta named one of Fast Company's Most Innovative Companies for sustainability initiatives
Passengers escape fiery American Airlines jet in Denver
Delta, American Dive On Slashed Outlooks; But Two Airlines Rally
Competitors are circling Southwest after the airline announced it's going to start charging for checked bags
Exclusive: Dominican Low-Cost Carrier Arajet Wants to Disrupt NYC Market
Boeing deliveries rise 63% in February from a year earlier
Transportation Secretary Duffy Lays Out 10 Ways the FAA Is Working to Upgrade Air Traffic Control and Make Flying Safer
EasyJet pilot Paul Elsworth suspended after flying too close to mountain
Delta Air Lines bets on ‘blended-wing’ flight to reduce emissions
Europe's airlines pivot to bite size M&A deals to limit cost, regulatory burden
Dave Emerson named new CEO of Virgin Australia, replacing Jayne Hrdlicka
Ryanair DELAYS controversial new boarding pass rule to avoid summer chaos
FAA Orders Inspection, Replacement of 737NG Engine Parts
Spirit Adds New Airport, Three Routes
Delta crash passengers should take the $30,000 payment, their lawyers say. Here’s why.
Budget airline launches new cheap flights to one of the UK’s top winter sun destinations
Delta Air Lines confirms plan to introduce 'basic business' class
Research
Webp txr36ytg6uuvd13i8xrjnuempd4m
Gary Leff Chief Financial Officer | View from the Wing

Delta Air Lines confirmed during its second-quarter earnings call a plan to introduce 'basic business' class. This move follows their previous strategy of unbundling economy class, where basic economy tickets do not allow changes or mileage-earning and do not include seat selection. Delta aims to maximize revenue by similarly unbundling business class features.

During the call, J.P. Morgan’s Jamie Baker inquired about this new concept with Delta President Glen Hauenstein: "Glen, this concept of unbundling the front cabin is one that I’ve been thinking about, in part because unbundling and segmenting the rear cabin has been such a success for Delta and a few others. I want to be careful about asking about future pricing on that. But I’m curious what the pros and cons are in terms of possibly going down this path? Or is one price for all how we should continue to think about the D One cabin?"

Hauenstein confirmed plans for a basic business product, stating, "We’ve talked conceptually about that. I think we’ll be giving you more details as we go, but we’re not ready to talk about the details of those plans moving forward. I think the investor day this year should be very exciting."

Get the Newsletter
Sign-up to receive weekly round up of news from Sky Industry News
By submitting, you agree to our Privacy Policy and Terms of Service. By providing your phone number you are opting in and consenting to receive recurring SMS/MMS messages, including automated texts, to that number from our short code. Msg & data rates may apply. Reply HELP for help, STOP to end. SMS opt-in will not be sold, rented, or shared.

If implemented, Delta would not be the first airline to offer an unbundled business class. British Airways charges for advance seat assignments in business class unless passengers have status or are on a full fare ticket. Emirates introduced 'basic business class' fares in 2020, followed by Qatar Airways, which restricted lounge access and advance seat selection on cheaper business class tickets. Finnair's entry into this space included fees for checked bags, seat assignments, lounge access, and no priority boarding or premium security.

The rationale behind basic economy fares primarily lies in price discrimination—segmenting business travelers from leisure travelers based on purchasing patterns and fare structures. However, implementing similar strategies in business class may prove challenging due to higher customer expectations and potential revenue loss from lower-tier offerings.

Traditional methods used by airlines to segment customers include high fares for last-minute purchases, Saturday night stay requirements on cheap fares, advance purchase requirements for best fares, and high change fees. These strategies have evolved over time as low-cost carriers adopted different pricing models.

Corporate travelers generally avoid booking the cheapest Basic Economy fares due to restrictions like no carry-on bags or limited check-in options. Major carriers like United Airlines experienced financial losses when introducing Basic Economy due to customers switching to other airlines.

The concept of Basic Business remains under discussion within the industry as airlines seek ways to balance offering discounted seats without cannibalizing revenue from higher-paying customers. The challenge lies in effectively segregating high-fare passengers from low-fare ones while maintaining profitability.

Bundling services often proves more profitable than unbundling when marginal costs are near zero. For instance, cable TV providers bundle channels rather than selling them individually because it maximizes profit by appealing to broader customer preferences at minimal additional cost.

In summary, while Delta's proposed basic business model aims at revenue optimization through service segmentation similar to their economy class strategy, its success will depend on overcoming inherent challenges associated with customer expectations and potential revenue impacts.

Organizations Included in this History
More News

With the commencement of the 2025 summer flight schedule, ITA Airways has seamlessly integrated into the Lufthansa Group terminals in Frankfurt and Munich.

Mar 30, 2025

Air China is set to resume its Toronto flights after a 33-year hiatus.

Mar 29, 2025

United Airlines has confirmed that a Boeing 767-300ER, which departed from London on March 26, returned to London Heathrow after experiencing mechanical problems.

Mar 29, 2025

American Airlines has introduced new routes to Punta Cana, the Dominican Republic, following its "March Map-Ness" contest.

Mar 29, 2025

A Delta Air Lines Airbus A321neo is back in operation after being grounded due to smoke detected in its cabin.

Mar 29, 2025

The Southern Museum of Flight in Birmingham, Alabama, presents an extensive collection of over 120 aircraft, showcasing a range of experimental, military, and general aviation aircraft.

Mar 29, 2025