United Airlines will begin offering Basic Economy fares in the second quarter of 2017, the carrier announced during its Investor Day on Tuesday.

"One of our competitors, in Atlanta, already has basic economy. We've taken it a little farther," United president Scott Kirby said, referencing Delta.

United's Basic Economy fliers will pay less than passengers who buy regular economy fares. In exchange, they won't get to choose their seats and must accept that there is no guarantee they will sit next to a traveling companion. Voluntary ticket changes won't be permitted. And Basic Economy customers will be in the last boarding group.

Those provisions are similar to what Delta has offered in its Basic Economy since the launch in 2012. But where United will differ is that its Basic Economy passengers will only be allowed one carry-on bag, and it will have to fit under the seat.

"That room is going to be saved for our economy passengers who value that and are willing to pay for it," chief commercial officer Julia Haywood said.

She said that by reducing the number of customers who can take larger bags on the plane, United will make the boarding process more efficient.

United said that it will offer Basic Economy fares on selected flights, and didn't say how much less they would be than regular economy seating. Basic Economy tickets will go on sale in the first quarter of next year.

The new fare class is part of a broader United strategy to diversify its product offerings. The airline will debut its new Polaris business class next month and is also considering the introduction of premium economy cabins on both international and domestic flights, Haywood said.

Competing with ultra-low-cost carriers is a primary objective of United and its legacy competitors when it comes to basic fares. American, too, has said it plans to begin selling basic economy seats in 2017.

Haywood noted that United's Basic Economy seats will be the same as standard economy seats.

"It's going to be the same experience onboard, the same product as economy, which we all know is much better than our [ultra-low-cost] competitors," she said.


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