Branded fares take hold among the three large US global network airlines. Market dynamics will shift
Back in 2012 Delta Air Lines began quietly testing fares at similar pricing points to those of Spirit Airlines, a US ULCC that was gaining traction in the market place, especially among investors. By 2014 that product had developed and manifested as the now well-known Basic Economy, part of Delta's suite of branded fares unveiled by the airline in late 2014.
Basic Economy was dubbed by some observers as the 'Spirit-killer', but Spirit's fall from investor grace in 2015 stemmed more from overall soft pricing in the US domestic market. However, the branded fare concept became increasingly popular in the industry business as a means by which larger US network airlines could compete effectively with their ultra-low fare rivals.
The introduction of more segmented fares should actually allow American, Delta and United to add more sophistication to their revenue management and avoid dilution of revenue; these fare products aim to create pricing segments which cater to a wide swathe of passengers.
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