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Last Class Seating

By April 5, 2016April 12th, 2016Customer experience, Product and pricing

Why is everyone complaining about cheaper airline tickets?

Pricing practices aren’t always popular. Actually, the best pricing practices are often unpopular. The recent announcement by American Airlines which introduced basic economy seating, or as everyone else is referring to them, ‘last class’ seats, is a prime example of an unpopular pricing change.

What is ‘last class’ seating? It’s pretty much the definition of why people complain about flying. The actual details on American’s offering are not public but initial disclosures highlight that passengers in basic economy will subject themselves to one or more of the following:

  • Smaller seats (up to four inches smaller than a normal economy seat’s pitch)
  • No seat reservations (get ready to be parked in the back of the plane, four rows away from the person you’re travelling with)
  • No flight changes
  • No carry-on bags
  • No free meals, snacks or sodas
  • No priority boarding or upgrades

By moving to last class seating carriers will make more money from:

  • Increasing the total number of seats
  • Reducing variable (e.g. snacks) and/or administrative costs
  • Incentivizing customers to upgrade their seats or make incremental purchases (e.g. snacks)

This is not a proactive move by the airlines. Instead, this is a reaction to the shifting competitive landscape. There has been an influx of low priced carriers and substantial consumer demand for low priced, no-frill airline carriers such as Spirit airlines, despite the poor customer reviews.

American Airlines and other legacy carriers initially fended off the attacks from low-priced carriers by lowering their pricing. Now they’re realizing that they can improve their profitability while maintaining a competitive price point by altering their offering with ‘last class’ seating.

Honestly, I don’t see what all the fuss is about. All the airlines have done is given price conscious customers another option that may better suit their needs. So the next time you get sandwiched in a small, non-reclining seat in row 63 after booking on Kayak, remember, you’re getting what you paid for.