In an “if you can’t beat ‘em, you may as well join ‘em” moment, American Airlines is preparing to introduce “no-frills” fares on some routes in 2016.
“Price rules,” Rick Seaney, co-founder of FareCompare.com, said of the move by the world’s largest airline, “and American is addressing a concern that ultra-low cost airlines, namely Spirit, but also Frontier, are stealing cost-sensitive, nonstop travelers.”
American Airlines, which revealed the new fares on its earnings call last week, hasn’t elaborated on what “no-frills” will mean exactly, but Seaney said the product is likely to have unassigned seats until an hour before boarding, no refunds, no exchanges, no loyalty miles and, perhaps, a more expensive checked bag fee. He said American will probably only offer the “no-frills” fares on routes and flight times that compete with Spirit and Frontier and, even then, only offer a limited number of seats at those prices.
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American Airlines’ plan to strip benefits along with fares doesn’t surprise George Hobica of Airfarewatchdog.com.
“American often matches fares on Spirit and Frontier on competing routes and now they're thinking they may as well match the service level as well if they’re going to match on price,” he said.
American’s plan to join the “no-frills” movement is good news for fliers seeking deals, said Melisse Hinkle, editor of Cheapflights.com.
“More competition, like we’re seeing here, generally means good things for consumers,” said Hinkle, “including more options, lower prices and a range of service.”
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Hinkle noted that JetBlue and Delta Air Lines also recently began offering unbundled, reduced-amenities fares as well.
“The no-frills trend has been gaining momentum,” she said. “American Airlines joining the movement seems like something of a tipping point.”
Seaney, of FareCompare.com, says he’d fly on a American’s “no frills” fare if there was a big difference in price, especially on last minute travel and on a flight that was under two and half hours.
“I believe this is exactly what is happening with some not-so-loyal fliers,” said Seaney.
For those tempted by “no-frills” fares on any airline, Hinkle’s advice is to do your homework.
“Know what’s right for your travel needs, and if you do choose an ultra-low-cost airline, go into the experience having done your research and knowing what to expect.”