Delta Introduces Business Class on a Budget

The premium side of the airplane curtain is getting cut up into more classes than ancient Rome as airlines seek to squeeze extra dollars out of travelers’ budgets. 

Delta, which is reporting earnings before the bell tomorrow, is introducing three new ticket types: two basic versions of business and first class fares, along with another option closer to the main cabin. Basic Business and First Basic tickets are geared toward fliers who want a bigger seat near the front of the plane and not much else. The tickets will be cheaper than their premium counterparts but come with trade-offs including no lounge access and no seat selection. There are also added fees for changing or canceling flights, similar to Basic Economy fares. Basic Business will be offered for lie-flat seats on long-haul flights while First Basic will be available for shorter domestic flights that typically don’t have business class. 

Delta’s move mirrors what rival airlines are doing, creating more upsells to tempt travelers who want to upgrade from their knees hitting the back of the seat in front of them but don’t want to splurge on the full first-class experience. 

We’re Not Soarin’, Not Flyin’

The travel industry’s struggling to spread its wings during a $40 billion downturn. US tourism missed out on more than $16 billion last year and is heading down the runway toward an additional $21 billion deficit this year, Tourism Economics estimated. 

Stateside travel has hit turbulence, too:

• Several surveys have found that Americans plan to travel less this summer than usual. Facing high fare costs, some vacationers are trading down and looking for ways to take a summer vacay on a budget (road trips, national parks). Airlines like Delta are leaning into the newfound frugality, betting that higher spenders may be more willing to trade down by skipping the lounge than by giving up their lie-flat seats. 
• United pushed the multi-tier strategy into premium cabins this spring, announcing Polaris Base tickets that let fliers splurge on premium seats but save a few (hundred) dollars by skipping out on perks like accumulating miles. 

Cruising Altitude: Over the years, major airlines have created different tiers of their economy class to capture customers who may want to spend on extra legroom or a window seat. But budget travel isn’t where the money’s at. As budget airlines see their planes turning tarmacs into yellow graveyards (ahem, Spirit), carriers are increasingly counting on champagne-sippers to lift their profits.