American Airlines is planning to offer cheap no-frills fares to compete against low-cost US carriers such as Spirit and Southwest.
The airline’s president Scott Kirby told analysts that American has many frequent fliers who are willing to pay for a premium service but more than half of its passengers fly just once or twice a year and purchase airline tickets based on price.
“We have to compete for them," Kirby said. "We can't just walk away from that size of the business."
According to Reuters, American will offer tickets with “less frills” at a “really cheap price”, but only where it competes with low-cost carriers on nonstop flights.
Kirby wouldn’t provide any more details on the plans for next year, which also included changes to its AAdvantage frequent-flyer programme.
The announcement is similar to Lufthansa’s decision earlier this year to launch three branded fare options for European economy fares, from basic – air miles, snack and drink, non-refundable and no hand luggage.
The news followed the release of American’s quarterly results which saw the airline post its highest quarterly profit in the company’s history.
The carrier recorded a third quarter profit of $1.9 billion, compared to a $1.2 billion profit in the same period last year.
We are extremely pleased to report another quarter of record profits thanks to the outstanding work of the American Airlines team," said chairman and CEO Doug Parker. "We are particularly proud of the remarkable job our team did this week to move American onto a single reservations system without any operational disruption."
American added that passenger revenue, as a percentage of capacity, will fall between 5 and 7 per cent in the current quarter from a year ago. The measure fell 6.8 percent third quarter.
In September, American suffered technical issues that grounded almost 300 flights from three major airports in the US.
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