US: Airlines offer more coach choices

Major US airlines are carving up cattle class, hoping to nab every customer from the tightwad to the spendthrift amid intensifying competition from discount carriers and declining ticket revenues. Delta is ahead among US carriers in adopting this “segmentation” strategy. The carrier started experimenting about three years ago and has since rolled it out in a big way, which for the Atlanta-based airline means splitting its coach fares into three categories: Basic Economy, Main Cabin and Delta Comfort+. The airline by traffic is trying to compete with budget rivals and wring more out of recent product upgrades by selling them to fliers willing to pay more rather than giving them away free to elite frequent fliers. American Airlines and United Continental said they would introduce tiered offerings later this year. Some European carriers already have embraced the strategy; Air Canada was a pioneer. “Finally, airlines are putting some thought into retailing,” said Peter Belobaba, principal research scientist at the International Center for Air Transportation at the Massachusetts Institute of Technology. “You can be upfront with consumers and show them different options with different prices and characteristics.” Divvying up coach is a big strategic shift, driven in part by a need to counter discount carriers that make up a third of the US market. Airlines also are eager to raise ticket revenue that has been falling for years as budget airlines have grown.<br/>