Spirit Airlines CEO dismisses new, cheaper fares by rivals

AP News
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Posted: Feb 22, 2017 7:45 PM

DALLAS (AP) — The CEO of discount carrier Spirit Airlines says he isn't worried about competing against new, cheaper fares from American and United.

The "basic economy" fares from American and United are designed to attract the kind of thrifty fliers that have helped Spirit double in revenue in four years.

Spirit has always been known as a low-fare, high-fees carrier — the fees made it one of the most complained-about airlines in the industry.

At least Spirit passengers know what they're getting for what the airline calls a "bare fare," CEO Robert Fornaro said Wednesday. He said American and United customers are going to be disappointed when they find out they can't upgrade their seat or bring a rolling carry-on bag.

"These pricing schemes are not new," Fornaro said in a phone interview. "Delta has been doing this for several years. We do fine competing with Delta, and I think we'll do fine competing with these guys."

Delta coined the term "basic economy" to describe cheap tickets with severe restrictions.

The rules vary by airline — American and United, which started selling basic-economy tickets on a few routes this week, limit buyers to carrying only a small bag that fits under their seat. Seating restrictions mean families may not be able to sit together.

But compared with a regular economy ticket on the big airlines, the basic-economy fares are generally cheaper by $20 to $40 or more per round trip.

Fornaro said the real purpose of basic economy for Delta, American and United is to entice customers with one fare then nudge them to buy a higher-priced seat instead.

"They're not kind of being honest about what they're trying to do," he said.

When customers try to buy a basic-economy ticket on United's website, they are told about restrictions on the ticket. They must either check and click "Basic Economy works for me" or select a higher-priced seat. American takes the same approach, asking customers if they want to "Accept restrictions" or "Move to Main Cabin" — a pricier ticket.

"We will help our customers understand what they're buying with multiple, clear disclosures about how basic economy works," starting when they buy their tickets, American Airlines spokesman Joshua Freed said.

United Airlines spokesman Jonathan Guerin said, "Basic economy lets our customers choose a fare that fits their travel needs." He said messages about the ticket's rules are clear during booking and at check-in.

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David Koenig can be reached at http://twitter.com/airlinewriter