United Goes Basic, Defers Aircraft Deliveries

United Airlines announced a new fare structure with the addition of "Basic Economy" as it tries to grab a slice of the low cost market.

United said Basic Economy “provides customers the option of paying the lowest fares to their destinations, while still receiving the same standard economy experience, including food, beverage, Wi-Fi and personal device entertainment.”

Boarding will be quicker as the lowest fares include only a single carry-on bag that fits under a seat. Basic Economy passengers will be assigned a seat at the airport and will be the last to board.

“Customers have told us that they want more choice and Basic Economy delivers just that,” executive VP Julia Haywood said. “We are giving our customers an additional travel option from what United offers today,” she added.

The new fares will go on sale early in 2017 for travel from the second quarter.

Separately, United said it would defer some Boeing aircraft orders as it seeks to reduce costs. An order for 737-700s, due for delivery over the next two years will be converted to the upgraded 737 MAX. United has not decided which MAX model it will go for.

The airline said the delay was because it does not need the additional capacity at present.