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United aimed at budget travellers with ‘Basic Economy’ fares

NEW YORK – United Airlines is making a pitch for passengers at both ends of the plane — budget flyers and luxury passengers — as it tries to more income.

The airline announced Tuesday that it will sell lower “General Economy” rates that will not let buyers choose seats in advance and limit them to a single carry-on bag that fits under the saddle. They will be the last to board.

The new rates will go on sale in January for flights starting in March, a spokeswoman said.

United hopes the lower fares attract passengers who pick carriers like Spirit and Frontier on price. Delta Air Lines already sells a similar, stripped-down ticket, and American Airlines plans to follow.

Airlines do not speak in general about the pricing, but the Delta basic economy tickets are around $10 to $30 cheaper, sometimes more — so than regular coach tickets for domestic flights.

Meanwhile, the airline plans to start with a new service called Polaris for premium passengers on international routes next month, and possible to be extended for domestic flights.

United said that it expects that these and other changes, in combination with cost control, the profit will increase by $4.8 billion between now and 2020.

United Continental Holdings Inc. also said that it is delaying the delivery of 61 of the 65 new Boeing 737 jets that it was planning to buy and convert the orders to a new, more fuel-efficient model that Boeing calls the 737 Max. The four jets that United get next year to be slightly larger aircraft than originally ordered. The shuffle will reduce United’s capital spending through 2018, with $1.6 billion.

CEO Oscar Munoz, who became CEO last year, made the comments as the United executives outlined their strategy to Wall Street analysts.

United Continental Holdings Inc. shares rose $1.08, or 1.7 percent, to $64.02 in the morning trade Tuesday.

On Monday, Warren Buffett’s Berkshire Hathaway Inc. made in a regulatory filing that it had purchased interests in the United, American airlines and Delta; Buffett had the famous scorned airlines as a terrible investment years ago.

Airline shares soared in 2013 and 2014 as consolidation, reduction of the number of competitors. Since then, however, the stocks have fared less the result of declining rates and, especially recently, make sure that the fuel and labor costs are heading higher.

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

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