Top airlines look to no-frills fares to win back travelers to Europe

Thu Oct 13, 2016 6:38pm EDT
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By Jeffrey Dastin

(Reuters) - An escalating fare war over the Atlantic is forcing big airlines to consider chopping prices, redesigning cabins and adding restrictions to win back budget-conscious vacationers drawn to upstart, low-fare rivals.

Delta Air Lines Inc DAL.N is reviewing cabin layouts, fares and the rules that come with them for international flights, its President Glen Hauenstein said on a call with media on Thursday.

"The exercise we're going through is to see what do people really want to buy and what are they paying for it," Hauenstein said. "It includes all kinds of fare products; it includes cabins we don't have today."

The airline's marketing partner, Air France KLM SA AIRF.PA, said last month that it was looking at every option to fend off low-cost entrants.

And U.S. rivals American Airlines Group Inc AAL.O and United Continental Holdings Inc UAL.N plan to roll out stripped-down fares for domestic travel, though a spokesman for American declined to comment on whether this would be extended to Europe, and United representatives did not immediately comment.

The moves by the big carriers follow a summer in which budget long-haul airlines, notably Norwegian Air Shuttle ASA NWC.OL, shook up the trans-Atlantic travel market by offering ticket prices as little as half what rivals charge.

Norwegian has said it can do this profitably because its labor costs are low and it flies some of the most fuel-efficient aircraft available.

Low-cost Icelandic carrier Wow Air also has taken market share from legacy airlines.   Continued...

A Delta Air Lines Airbus A330 aircraft takes off at the Charles de Gaulle airport in Roissy, France, August 9, 2016. REUTERS/Jacky Naegelen