United Joins Airline Pricing Race To The Bottom

Normally, anytime an airline carrier is associated with a steep dive, things aren’t going according to plan. However, it seems as if United is more than fine with tanking its prices for economy fares to keep pace with the competition.

Travel Mole reported that United will join rivals Delta and American Airlines with a price reduction on their lowest economy fares. The change is scheduled for some time later this year. United Chief Revenue Officer Jim Compton noted that while the move will help the carrier keep its closest regional competitors in focus, it will also better position the airline to compete against the growing number of ultra-low-cost carriers the have been popular in Europe for decades.

“This will allow us to compete with ultra-low-cost carriers for passengers looking for that price point,” Compton said in a statement, as quoted by Travel Mole. “It will also help us remove some of the dilution we have in our pricing structure.”

United didn’t offer any specifics on the pricing changes or outline what services and amenities might be stripped away to accommodate the lower dollar amounts, but looking at other carriers’ plans could offer hints on what United might do to win those fliers back. American Airlines President Scott Kirby told Business Travel News in October 2o15 that their new low fare structure was based off of Delta’s, which prohibits seat reservations and refunds for the benefit of the cheapest ticket in the air.

It’s these changes, Kirby said, that will help struggling carriers tempt more people into becoming frequent fliers, as half of all annual passengers on American fly the carrier just once a year.

“We will do more to disaggregate the product and try to have a product that has less frills because of the cheap price,” Kirby told Business Travel News. “This will allow us to compete with the ultra-low-cost carriers … and, for customers who want a better product and better seats, give them a choice of not paying that fare and getting a better product.”