Over time, we’ve seen the concept of “basic economy” become pretty widespread, whereby the cheapest economy fares include the fewest perks. The purpose of this is twofold — to expand a carrier’s potential customer base, and to get existing customers to “buy up” to a higher fare, in order to avoid punitive restrictions.
Internationally, we’ve also seen some airlines introduce basic business class. Up until now, it’s not really a concept we’ve seen at one of the “big three” US airlines. Could that change, though?
For some time, Delta has been dropping some hints about possibly introducing basic business class. While there still hasn’t been a formal announcement, executives at the airline mentioned this during Delta’s 2024 Investor Day (today), so I wanted to recap everything we know so far.
In this post:
Delta appears to be planning basic business class
Over the past several months, we’ve seen several hints that Delta may be planning an unbundled business class product. What would that mean? Well, it would entail more options when booking a business class ticket — the most “basic” business class would probably just include a seat and some limited amenities, and then customers could pay extra for fare bundles that include more things, whether it’s seat assignments, lounge access, or flexibility.
During the Q2 2024 Delta earnings call, JP Morgan Analyst Jamie Baker asked the following question:
“This concept of unbundling the front cabin is one that I’ve been thinking about in part because unbundling and segmenting the rear cabin has been such a success for Delta and a few others. I want to be careful about asking about future pricing and all that, but I’m curious what the pros and cons are in terms of possibly going down this path, or is one price for all how we should continue to think about the D1 cabin?”
Delta President Glen Hauenstein responded with the following:
“We’ve talked conceptually about that. I think we’ll be giving you more details as we go, but we’re not ready to talk about the details of those plans moving forward.”
Then during the Q3 2024 earnings call, Hauenstein was asked if premium revenue can continue to grow, to which he answered the following:
“But we also think there’s more to go on the premium products. And I think not to keep harping in on saying, come next month and join us for our Investor Day. But I think we’ll be able to unveil why and how we think those can continue to improve over the medium and long term.”
So while we’ll see how this plays out, it seems pretty clear that unbundling business class is something that Delta is working on, though it remains to be seen how imminent the implementation is.
While it has been suggested that there may be an announcement during the 2024 Investor Day, that didn’t exactly materialize. However, during the presentation, Delta emphasized how in 2024 and beyond, it plans “further segmentation aligning value to price.”
Outside the United States, there are quite a few airlines that have unbundled business class, ranging from Emirates, to Finnair, to Qatar Airways. In general, I would expect that “basic” business class could include some of the following restrictions, based on the precedent we’ve seen at other airlines:
- Fees on seat assignments
- Fees to change tickets
- No lounge access or restricted lounge access
- Restrictions on priority check-in, priority security, and priority boarding
My take on Delta unbundling business class
Since the start of the pandemic, we’ve seen strong leisure demand for premium cabin travel, while business travel hasn’t fully recovered. This combination is a double-edged sword — it’s easier to fill premium cabins, but airlines aren’t seeing as many of the super expensive premium fares as they saw before the pandemic.
I would think that Delta’s primary goal with unbundling business class would be to get people to buy up to more expensive premium fares to avoid certain restrictions. I know airlines try to market unbundling as intending to offer a better value option to more travelers, though in reality I suspect the cheapest current fares would simply become the new “basic” fares, where fewer perks are included than now. So consumers likely wouldn’t come out ahead.
Personally I think the most logical implementation of an unbundled premium cabin would be in domestic first class, at least to start. I hate to say it, but this could be a way for Delta to reimpose change fees on tickets, by making these tickets not changeable or cancelable without paying a fee. Maybe the airline wouldn’t include seat assignments in advance for non-elite members, or something, but I wouldn’t expect it to be too draconian beyond that.
Unbundling business class on long haul flights is a bit trickier, as it’s a coordinated effort. That’s because so many long haul markets are dominated by joint ventures, which coordinate fares, schedules, and restrictions. Delta has a joint venture with Air France-KLM and Virgin Atlantic across the Atlantic, and with Korean Air across the Pacific, so we’d likely see this implemented on a wider scale.
In addition to the potential above restrictions, I wonder if we could maybe see the airline offer Delta Sky Club® access on basic business class tickets, while restricting Delta One Lounge access to non-basic business class tickets.
Keep in mind that Air France-KLM have already added seat assignment fees in business class in many markets, and in some ways, perhaps that’s one form of unbundling business class. I mean, I guess by that criteria, British Airways’ business class has been unbundled for a very long time.
Bottom line
While nothing is official, Delta appears to have plans to unbundle business class in 2025 and beyond. We’ve seen the concept of basic business class at some foreign carriers, and you can expect that this will include restrictions related to change fees, seat assignments, priority services, etc.
Personally I think Delta is most likely to use this as a way to reimpose change fees on many premium tickets, in order to get people to book more expensive fares. I also think it’s safe to say that if Delta does go this direction, American and United will almost certainly follow.
So for now we’ll mark this as “developing,” but it’s something to keep an eye out for…
What do you make of the prospect of Delta unbundling business class?
Delta’s corporate leadership under Bastian are like Louis XVI and his court Versailles. They are so isolated from their customers. Just look at all the issues they’ve had. And literally no change in attitude or public comments. My now-former boss was a 2 million miler and a diamond every year since the tier was created. In 2023, he stopped flying Delta. Complete cold turkey. He switched to American and is now concierge key with American....
Delta’s corporate leadership under Bastian are like Louis XVI and his court Versailles. They are so isolated from their customers. Just look at all the issues they’ve had. And literally no change in attitude or public comments. My now-former boss was a 2 million miler and a diamond every year since the tier was created. In 2023, he stopped flying Delta. Complete cold turkey. He switched to American and is now concierge key with American. Delta never once called him or emailed him. You would think someone in customer service or revenue management would have a file on the top customers and notice when someone suddenly stops flying with Delta.
Yet another reason to avoid Delta but the entire airline industry has become a horrendously mismanaged joke. CEOs and senior management are overpaid for continually offering less for more.
Imagine paying thousands of dollars for a business class ticket, then having to add a few hundred extra to select a seat, a few hundred extra for a suitcase and a few hundred extra for lounge access. Because that's one thing I noticed with airlines that 'unbundle' business class: it's not like your 23kg suitcase in economy can fly for $25, so your suitcase in business is valued at the same price, of course. No,...
Imagine paying thousands of dollars for a business class ticket, then having to add a few hundred extra to select a seat, a few hundred extra for a suitcase and a few hundred extra for lounge access. Because that's one thing I noticed with airlines that 'unbundle' business class: it's not like your 23kg suitcase in economy can fly for $25, so your suitcase in business is valued at the same price, of course. No, it's rather $100 in that case, because they put a 'priority' sticker on it which they instantly ignore. Seat selection in economy from $10 a seat? Make it $100 in business! Per leg, of course! Because if it's just a few dollars difference on the grand total, there would be no point in unbundling, so make it count. Because $100 in all sorts of extras on a $200 ticket in economy is a big difference while $100 on a $2000 ticket in business isn't.
Unbundling business class is pettiness at a new level. The whole principle of business class is that it should be a smooth and carefree experience, not that you have to negotiate and bargain your way through every step of the process of traveling. You should have bought that hassle off with all the premiums you pay for the ticket. If people want to be cost conscious, then can travel economy, after all.
Unbundling business would be yet another reason to stay away from Delta and I hope that UA and AA stay away from this stupid concept.
I completely agree with you. I make it a point to avoid booking directly with airlines that charge thousands for business class yet demand extra fees for seat selection. When booking through a partner, like flying on BA or QR via an AA ticket, I always refuse to pay for seat selection. If airlines start charging for lounge access too, I’ll prioritize minimizing layover times. If that’s not feasible, I’d explore alternative travel options.
Unbundling works when the market can be meaningfully segmented. There must be a critical mass of people who are willing to pay for a bundle of perks (e.g., seat assignment, extra bags, priority check-in), and equally, a mass of people who are not. In this manner, the airline can maximize revenue by giving each the product they want at the price they are willing to pay. The issue is that lounge access is already unbundled;...
Unbundling works when the market can be meaningfully segmented. There must be a critical mass of people who are willing to pay for a bundle of perks (e.g., seat assignment, extra bags, priority check-in), and equally, a mass of people who are not. In this manner, the airline can maximize revenue by giving each the product they want at the price they are willing to pay. The issue is that lounge access is already unbundled; you must pay for a membership to use lounges on domestic flights, and international travelers are more likely to have a credit card with some sort of lounge access. Priority security is already "unbundled," with TSA precheck. So, we are mostly talking about seat assignments and maybe some fiddling with baggage allowances. And this is where "unbundling" starts to look dangerously like "nickel-and-diming" your best customers. Take a good, hard look at the reaction to AA's paper-box amenity kits, and you can see the limits here.
I think unbundling has worked well for economy, because it is fundamentally a budget concept: you pay as little as possible for only what you need. LCC started this and others matched it. You only need to go from A to B - pay the minimum. Want extra leg room, but no luggage? You got it…
I pay for my own tickets and consider myself a “free agent” and see it differently for premium...
I think unbundling has worked well for economy, because it is fundamentally a budget concept: you pay as little as possible for only what you need. LCC started this and others matched it. You only need to go from A to B - pay the minimum. Want extra leg room, but no luggage? You got it…
I pay for my own tickets and consider myself a “free agent” and see it differently for premium cabins: Sometimes, ie 6-8h overnight flight, solo traveler, I maybe only want a flat bed. I’ve done AirAsia in angled flat and it was great value…
But when I want a premium experience, I expect an end-to-end premium experience and for me, SQ does that best: lie flat seats on every plane, even short-haul narrow body. Great service ground & air, food, drink.. not to worry, ever, you will be treated well…
I book away from unbundled business class, unless I just want the seat. For example, not getting a seat assignment on BA means you’ll not only end up next to the toilets, but you’ll also be the first to be downgraded or delayed when they frequently overbook… not something I’d consider premium… it’s an LCC with big seats…
Now, I don’t consider any of the US airlines premium, but unbundling business class fares would certainly end any claims Delta might have on being premium..
I’d bet that plenty of US business travelers would book away from Delta if they start this and UA/AA don’t follow immediately…
On long haul, as long as the configuration is 1-1 or 1-2-1, I don't care where I sit. Paying €70 per leg for seat reservations (QR) is a waste of money.
But it also means you would likely be the first to be downgraded or denied boarding.
It does not sound like fun for their customers! It will make it all too complicated.
I think Delta is just waiting for the Trump presidency to begin. Ed Bastian is already talking about how the new administration will reverse the overreach of the Biden administration. Trump’s “breath of fresh air”, Bastian’s words, is good news for Delta and bad news for consumers.
I sympathise with everyone who is wary of the unbundling of services, but I don't see any arguments for retaining the 'no change fee' policy. We're not talking about access to a dodgy contract lounge, but the risk of expensive premium cabin sests flying empty due to someone changing their mind at the last minute.
It's an absurd thing and I doubt that any non-US airlines do it - in fact, the Lufthansa 'Business...
I sympathise with everyone who is wary of the unbundling of services, but I don't see any arguments for retaining the 'no change fee' policy. We're not talking about access to a dodgy contract lounge, but the risk of expensive premium cabin sests flying empty due to someone changing their mind at the last minute.
It's an absurd thing and I doubt that any non-US airlines do it - in fact, the Lufthansa 'Business Saver' fare type within Europe includes all the service elements of business class but offers no flexibility whatsoever, you either fly as scheduled or forfeit the ticket. Pricing is keen and the concept works really well for a lot of premium leisure travellers, whether they're pensioners visiting their adult children or couples going on long weekends. It goes without saying that these people won't tend to have status. As a result, even if the onboard product is underwhelming, it's easy to see why they would value the lounge access, priority check-in/security and generous luggage allowance that are included in the ticket.
Can anyone explain why they think that it wouldn't be a good idea for DL, or indeed any other airline anywhere in the world, to offer that type of fare?
Please. Think. This is like a failed relationship for years. We try to make excuses, imagine things will get better and yet you know, they're not that into you.
ffs. how long will it be until the breathing oxygen is "unbundled?"
Watch this space. But I suspect a fee for using the potty will be first.
Watch this space. But I suspect a fee for using the potty will be first.
When did we get to the point where everything is a race to the bottom? I remember when companies tried to get your business by offering you more not less.
Deregulation and industry consolidation into non-competitive oligopolies. Government assisted crapification.
I do not fly Delta - but I have a feeling this will not get them what they want and just diminish thier reputation (to what degree I cannot guess) and eventually undo this decision.
I'm barely 1k with United and as nice as business / first is -i can almost always snag my favorite exit row seat which is really what matters imo.
I always seem to pay cash for my ticket and for my needs...or lack there of....would love to pay less to domestic F and just get a seat in that cabin, and maybe pay for an upgraded meal. I am retired and older and my needs/wants are different than they were 10 years ago or so. Interesting idea. I hope it works.
It is a horrible idea. Tickets are already very expensive and to pay extra for seat selection and lounge access is just wrong. There is nothing premium in the "light fare". It's just greed. Recently I booked Air France long haul. Difference between basic fare and classic/flex with seat selection and lounge access was £1000. Crazy.
Nickle and diming works great in the aviation industry. Just see Spirit.
Never listen to Wall Street analysts. They literally drive companies to the ground. Just see Spirit.
This is way too complicated for me. While I am a million mile flyer, I increasingly don’t go unless it is absolutely necessary. I find the math absurd, and just stay home.
Assuming Basic Delta One Ticket or Basic Delta First Ticket or Basic Delta Premium Select price is reasonable, I would really be excited about it. Lounges and priority check-in can be excessive for those with elite status already or people simply don't need them. They may just want to have a bigger seat or a lie-flat experience when they are on air.
However, based on how Delta did with their Basic Economy, I would assume...
Assuming Basic Delta One Ticket or Basic Delta First Ticket or Basic Delta Premium Select price is reasonable, I would really be excited about it. Lounges and priority check-in can be excessive for those with elite status already or people simply don't need them. They may just want to have a bigger seat or a lie-flat experience when they are on air.
However, based on how Delta did with their Basic Economy, I would assume most elite status perks will be stripped away. Thus, no lounges (not even Delta SkyClub) for Basic Business passengers.
I'm not sure this would make much of a difference on short-mid haul US based airline routes.
Seat assignment-it's window seat or aisle. If you drink a lot, aisle is the way to go.
Change fees could be a pain point, especially for biz travelers.
Most biz flyers are using other means to access a lounge or like me, they are arriving at the airport closer and closer to boarding time.
If you have...
I'm not sure this would make much of a difference on short-mid haul US based airline routes.
Seat assignment-it's window seat or aisle. If you drink a lot, aisle is the way to go.
Change fees could be a pain point, especially for biz travelers.
Most biz flyers are using other means to access a lounge or like me, they are arriving at the airport closer and closer to boarding time.
If you have pre-check or Clear, priority security doesn't matter. Also curious how many biz travelers are checking a bag. Most seem to carry on. Priority boarding? I already have my biz class seat and pre departure drinks are far and few between.
I think bundling would only have a real impact on leisure-oriented routes. For the most part, anyone that buys an F/J seat isn't worried about fees, it's just a side-note to the purchase. Leisure routes might be different in terms of the passenger profile...let's see the future pricing as compared with today...
OPM flyers will worry when policy is lowest fare, and they have to start paying their own money.
Paying for seat selection after you've already spent thousands, just seems like the ultimate in nickel and diming.
Paying for seat selection is the one bit of unbundling that makes perfect sense as long as free seat selection for elites is kept. It’s one of the few things BA, for example, actually have right in J, ensuring elites booking expensive last minute tickets can still get a window seat and aren’t stuck with the worst seats in the cabin because they’ve all been taken by leisure travelers.
You cannot get any more elite than paying thousands for the ticket.
I can't remember the airline, but I suspect DL might follow their idea, which includes the following. You could reserve most any J seat on a widebody. But, unless you have sufficient status, you have to pay to get a "true" window seat on the a339 and a350. Sadly, I'd pay it, fully expecting my net cost to rise.
I think restricting lounge access or priority check-in and boarding would be a nightmare that would also likely require a significant revamping of the loyalty program since elite status tiers get lounge access, priority check-in and priority boarding. Even Air France and KLM don't do this.
I think what's most likely is no free seat assignment, no same-day change and a reimposition of a fee to make changes beyond the 24 hours after booking. Same-day...
I think restricting lounge access or priority check-in and boarding would be a nightmare that would also likely require a significant revamping of the loyalty program since elite status tiers get lounge access, priority check-in and priority boarding. Even Air France and KLM don't do this.
I think what's most likely is no free seat assignment, no same-day change and a reimposition of a fee to make changes beyond the 24 hours after booking. Same-day change is increasingly worthless. Delta's cabins are so full these days that there often isn't another option, whether it's for a same-day change or an IROP.
But on the other hand it would encourage brand loyalty within the alliance, status holders would still benefit from the benefits even on the lowest fare bucket within whatever class you are flying.
I think the elimination of same-day change or no-fee change is the most likely adjustment. Same-day change used to be a great perk but it's almost useless now because the cabins are so full that there often aren't seats within 24 hours of departure. It's become an issue for me during IROP situations.
This might be a pipe dream but all I care about business class (specifically on US airlines) is a full flat seat. Nothing else that comes with it is appealing to me. I get priority check in, free bags and priority boarding through my status. I couldn’t care less about lounge access. While on the plane, I rarely eat or drink anything (other than water), I don’t care for amenity kit, etc… I usually go directly to sleep so the seat is really all that matters to me.
you want a cookie
Haha, I don't eat cookies.
So you can just be shipped in a LD-4 container in the cargo hold.
Sounds like premium Ryanair. What a Wizz.
This is purely to raise the prices of business class fares by making the cheapest fares undesirable.
Smart move by Delta - people will pay it.
I have zero problems paying for premium either by buying out right or cash upgrades. I don't expect any business constantly to give me free stuff.
That being said when you upgrade a product selection you do so for the entire experience. So it's the ability to choose your seat from what's available, get a meal within the meal time window. dedicated check in. Not to experience a gussied up Frontier Airlines experience.
Unfortunately the...
I have zero problems paying for premium either by buying out right or cash upgrades. I don't expect any business constantly to give me free stuff.
That being said when you upgrade a product selection you do so for the entire experience. So it's the ability to choose your seat from what's available, get a meal within the meal time window. dedicated check in. Not to experience a gussied up Frontier Airlines experience.
Unfortunately the airline business tends to be monkey see/monkey do so I don't have much hope that AA and UA won't follow suit. Even though you're pissing off that at least at one time (paid premium passengers) your best customers.
I wonder how this will work for corporate travel. If my policy only lets me book cheapest business fare class available, I’m not going to pick Delta’s unbundled over a competitors
UA and AA will copy them very quickly like they always do.
The rest of us who pay premium would love to see OPM flyers who don't pay for their own tickets unbundled.
I've worked in corporate travel for 25+ years. It depends on how the company manages the travel policy - most now use the lowest logic fare (LLF) policy
which considers journey time/distance, job grade etc when determining the most appropriate fare. If DL basic business is LLF for your selected journey and you select another carrier, you may be flagged out of policy and there may be consequences to that. Many savvy travellers manipulate...
I've worked in corporate travel for 25+ years. It depends on how the company manages the travel policy - most now use the lowest logic fare (LLF) policy
which considers journey time/distance, job grade etc when determining the most appropriate fare. If DL basic business is LLF for your selected journey and you select another carrier, you may be flagged out of policy and there may be consequences to that. Many savvy travellers manipulate the online booking tool (OBT) by selecting a short time window that makes their preferred airline selection LLF by default. But some have a minimum time window, so either way they've got ya...
Ugh, will be interesting to see this develop further.
Folks are not going to like this. Really hope it comes back to bite them by antagonizing their best customers.
There's no chance that Delta didn't thoroughly poll and clinic with "their best customers," to find out what parts of this that they do/don't like, or more importantly, would pay for.
Just like there was no chance that Delta didn’t thoroughly poll the changes to devalue Sky Miles - which Bastian later had to walk back in humiliating fashion - right?
It's a premium rip-off, just like everything on the worst airline in the Americas.
But some airlines that are constantly named among the best already have this concept "Emirates, .... to Qatar Airways"?
True but no one puts Delta or anyone US airline among the best like Emirates to Qatar Airways. If USA airlines want to copy "the best" they should start with service before fees.
Sure but "the best" don't make the kind of money that the US carriers do either.
So if anything's going to be copied, it's going to be revenue related, not "service." Sad, but the way it is.
If you strip the credit card peddling from the US carriers, how does profitability compare to "the best"? It is not the flight operations in the US that predominantly feeds the bottom line.
I hate the idea of the unbundled premium fares. Charging for seat selection when I’m already paying thousands just seems wrong.
@DN10: It is wrong. But until enough consumers vote with their pocketbooks, there is no incentive for airlines to change.