×

Airlines love this product because many passengers don't

  • Delta Air Lines is rolling out basic economy fares worldwide in 2018.
  • Basic economy passengers can't pick their own seats, and they board last.
  • About half of passengers choose to pay the higher, regular economy fare, Delta CEO Ed Bastian said.

No advance seat assignments. No upgrades. No same-day ticket changes. A lot of passengers don't like basic economy, airlines' no-frills product. That's exactly why Delta Air Lines is taking it global next year.

Given the choice, half of Delta passengers who are considering basic economy pay for the regular main cabin fare, the No. 2 U.S. airline's CEO, Ed Bastian, told CNBC. Regular economy tickets on the carrier cost about $30 to $40 more than basic economy.

Bastian's estimate on passengers' opting for the more expensive main cabin fare echoed what American Airlines revealed last month.

Delta launched basic economy in 2012. Competitors United and American launched their own versions this year, taking it a step further by prohibiting basic economy passengers from using overhead bins.

A Delta Airlines stewardess
Robert Nickelsberg | Getty Images
A Delta Airlines stewardess

Many customers don't want basic economy "when they see what exactly it is," Delta's president, Glen Hauenstein, told investors Wednesday.

"Really the success of that product isn't how many people buy it, in our mind, but how many people don't buy it and choose another product," he said, after the company reported better-than-expected profits for a quarter plagued by deadly hurricanes. "And that's really where we're focused."

The upsell is important for airlines because they are trying to at once compete with low-cost carriers such as Spirit and wring more money from passengers. U.S. airlines took in more than $4 billion from checked-baggage fees last year, for example.

On the other end of coach, Delta is also offering premium economy seats, which offer more legroom and Tumi amenities kits.