American Airlines Launching Bare-Bones Pricing Plans In 2016

American Airlines

Spirit Airlines is about to be faced with a major competitor in the form of American Airlines. The world’s largest carrier is planning to launch a new bare-bones service option that will appeal to U.S. budget shoppers

American Airlines CEO Scott Kirby already announced that the company will match competitors’ prices on any nonstop route.

The company will soon begin selling cheap fares with more restrictions that will target the likes of Spirit Airlines and Southwest Airlines.

The company has not yet announced what “bare-bones” tickets will look like. With many carriers such as Spirit, a ticket starts with a base price and increases in cost as fliers add checked baggage, drink options, and other amenities.

Spirit shares fell more than 8% on news of the move.

87% of American Airlines customers flew only one-time last year, making up more than 50% of the airline’s revenue.

American Airlines earnings jumped by 80% in Q3, bringing its total to $1.7 billion. The company was helped along by low fuel prices.

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For 2016, American plans to grow service by 2 to 3%

Written by Peter Mondrose

Peter Mondrose

Peter Mondrose is the Editor-In-Chief at BusinessPundit. He received his degree in Economics in 1998 and a second degree in Journalism in 2004. He has served as a financial adviser, market trader, and freelance journalist for the last 11 years. When he's not investigating market conditions and reporting on workplace news, he can be found traveling with his wife, dog, and laptop. He can be reached at PeterMondrose@BusinessPundit.com or (929) 265-0240.