Delta Air Lines was the first of the major U.S. airlines to introduce basic economy tickets more than a decade ago, selling slightly cheaper but restrictive fares that don't include seat assignments or other perks. By the sounds of it, the Atlanta airline could be the first to copy that approach with business class tickets, too.
Airline executives aren't saying much just yet, but they strongly hinted at the prospect of “unbundling” business class fares – just as they've stripped down basic economy – in response to a question from an analyst during a quarterly earnings call last week.
“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,” the analyst asked. “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 (Delta One) cabin?”
Delta President Glen Hauenstein responded by saying that question would be answered at the airline's annual Investor Day, currently set for November. But in saying so, he also tipped his hand: Some kind of “basic” business class fare appears to be in the works.
“I think you're going to have to come to Investor Day to hear more about that. We've talked conceptually about that,” Hauenstein said. “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.”
What would a “basic” business class ticket look like with Delta? What would you get – and what would you lose? Delta isn't saying just yet, nor is it saying when any changes might take place.
But while it would be the first U.S. carrier to offer such fares, you can look overseas to see what Delta might do: Sell business class tickets (still for $3,000 or more roundtrip) that don't let you pick your seat for free nor even get you into a lounge beforehand.
That's exactly what airlines like Lufthansa, Emirates, and even Qatar Airways have done as they've unbundled business class tickets to sell a pared-down fare at a slightly cheaper price.
Why would Delta – or any airline – sell business class fares for thousands of dollars apiece yet cheap travelers out of seat selection or lounge access? Because they can … and more importantly, because it makes the airline more money.
Don't expect a big bargain on a lie-flat seat as a result. This would merely add insult to injury for the Delta flyers already paying thousands of dollars (or hundreds of thousands of SkyMiles) to book a Delta One seat.
Today, anyone buying a $3,000-some Delta One ticket gets to pick where they sit for free and visit a Delta Sky Club before boarding – or, better yet, the exclusive new Delta One business class lounge in New York City (JFK). Whenever these unbundled fares go live, Delta could start selling them for $3,000, charging another few hundred bucks for the fully inclusive business class fares – or charge basic business buyers separately for seat assignment or lounge access.
That framework has worked wonders for Delta and other airlines with standard basic economy fares as a way to combat ultra-low-cost carriers while pulling more revenue. Hauenstein himself has previously wondered aloud: “What are people willing to pay” to avoid basic economy?
And that's the point: Unbundled fares aren't really cheaper – they merely take the place of a standard fare, which go up in price. You wind up paying the same amount you used to … and get less for it.
Assuming Delta excludes lounge access from business class fares, that could also be part of its strategy to ensure its Delta One Lounge in New York City (JFK) – and future business class lounges planned for Boston (BOS) and Los Angeles (LAX) – don't get swamped. While its first business class lounge in New York is getting top marks from travelers since opening last month, it's also reportedly regularly packed inside.
Delta might be the first to sell unbundled fares at the front of the plane. But in the monkey-see, monkey-do airline industry, it's likely only a matter of time before this setup spreads to the likes of American and United.
Consider this: It took a few years but every airline in the country, from Alaska to United, eventually mimicked Delta's rollout of basic economy. And it only took a few months after Alaska was the first U.S. carrier to raise checked baggage prices to $35 in late 2023 for every other airline to match.
Bottom Line
Delta's top brass were careful not to share anything beyond a brief tease, but it's clear that some form of unbundled business class fare is in the works.
Does that mean Delta One flyers will have to pay even more to pick their seat or visit the lounge? Will Delta trade away other perks? When will this all happen – and how long will it take other airlines to copy Delta?
We'll be tuning into Delta's Investor Day in November for the answers.
Executive editor Kyle Potter contributed to this story