Business

American adds fare barring overhead bin use

United, Delta also debuting lower fares

A US Airways Embraer ERJ-190 jet descends for landing at Philadelphia International Airport in Philadelphia, Pennsylvani
A US Airways Embraer ERJ-190 jet descends for landing at Philadelphia International Airport in Philadelphia, Pennsylvania on December 9, 2013. American Airlines Group, the world's biggest airline after AMR Corp's merger with US Airways Group, intends to take advantage of its broad global network to win more corporate customers, the company's president said. American Airlines parent AMR Corp and US Airways sealed their $18 billion merger on Monday. Shares of the carrier are trading on Nasdaq under the symbol REUTERS/Mark Makela

American Airlines followed United Continental in announcing no-frills tickets that limit carry-on bags to those that fit under a seat, bolstering efforts to compete with fast-growing fare discounters.

The new basic-economy tickets will go on sale Feb. 10 in select domestic markets, and the first flights will begin soon after, the Fort Worth, Texas-based airline said in a statement Wednesday.

American didn’t identify the initial 10 markets or provide specifics of the discount compared with other coach cabin fares.

American, United and Delta Air Lines are rolling out lower fares with few amenities to compete with low-cost carriers such as Spirit Airlines, which appeal to customers who select flights based primarily on ticket prices.

With basic economy, American can appeal to budget travelers without more broadly discounting seats, said Jack Atkins, an analyst at Stephens Inc.

“It’s a positive for the earnings, for the stock, and its important to do in order to prevent dilution of the cabin, given the growth” of deep discounters, he said. “They are going to use this more as a defensive tool than an offensive tool.”

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