Delta Air Lines has already offered a Basic tier for its main cabin seating for over a decade, giving budget-conscious customers an opportunity to shed extras in favor of lower base fares. Now, that option is coming to its premium cabins as well.
The airline revealed during a Q4 earnings call last week that it will soon begin offering tiered fares for both Business and First class, becoming the first U.S.-based airline to do so.
Although the details have not yet been revealed, it’s likely that these fares will operate similar to Basic Economy, which unbundles the airline seat itself from other perks like lounge access, seat selection, and the ability to earn SkyMiles. An exact timeline has not been announced, but the company plans to launch the new offerings sometime this year.
Delta is also set to offer an Extra tier for its premium cabins, mirroring a tier already offered in its Main cabin. The Extra Economy tier currently offers boarding and SkyMiles upgrades as well as increased ticketing flexibility.
No other U.S. airline currently offers lower-cost options for its premium cabins, although international carriers like Qatar Airways, Emirates, and Etihad offer similar products for their Business class fares.
Airline President Outlines New Strategy
Delta President Glen Hauenstein said in the call that the airline plans to offer “three categories for every product, which is basic, main, and extra.”
Hauenstein explained his reasoning, saying passengers will appreciate the added flexibility across all of its cabins.
“I think that if you were offered a $500 ticket, there was no reason for you to ever want to pay more than $500 because it was fully loaded,” he said. “Now that seat is $500, but you can buy it for $450 if you’re willing to get the seat assignment at 48 hours, if you’re willing to have it non-refundable, and then all the way up to extra where it’s fully refundable and you get the best seats unlocked at that time.”
Ticket Update Comes Amid Changing Airline Economics
Delta’s decision to offer both pared-back and premium options for all its tickets comes as the economics of air travel have changed. The airline sold over a billion dollars less in main cabin tickets last year, but still had its most profitable year ever due to jumps in business and first class ticket sales as well as co-branded credit cards. As The New York Times reported, Delta planned to have premium-cabin revenue supplant main cabin by 2027. It ended up happening by 2025, two years earlier than projected.
Meanwhile, budget airlines like Spirit and Frontier are struggling. Spirit continues to teeter on the verge of bankruptcy, while low-cost carriers Sun Country Airlines and Avelo Airlines recently announced plans to merge in order to better compete against its larger rivals. The introduction of Basic fares like Delta offers is largely credited with the shift, and it seems likely that new Business and First class ticketing tiers are likely to further shake up the economics of air travel.
