Is United planning to remove some business class seats from its longhaul fleet?
Yesterday I wrote about United’s healthy third quarter earnings and rosy outlook for the remainder of the year. I finally had a chance to read over the earnings call, where one comment particularly caught my attention.
United’s Executive Vice President Andrew Nocella offered the following thoughts when asked if United was turning people away from business class or had too many seats:
That’s a good question. And we spend a lot of time trying to figure out how many seats should be on our aircraft and how many seats should be in each and every cabin. United’s hubs are located in the best premium markets on the globe, they represent the majority of business traffic to and from the United States; it is something, I think, very unique to us. And so, we think we have appropriately sized our cabins to accommodate the business class needs or the premium needs across the globe.
So I think we’re pretty pleased with that, and we offer I think pretty large sized cabins to make sure whether you’re going to China or London Heathrow, we can do that. We continue to look at the number of premium class seats we have onboard all our aircraft given where our hubs are located. And I think, we actually will have more to say on this in the future as we make sure that we have the right number onboard every single aircraft we have.
Pay attention to the bolding above.
My Thoughts
United offers 50 business class seats on its international 777-200s while American and Delta only offer 37. While United offers 48 business class seats on its 787-9 and 36 on its 787-8, American is the process of removing seats on some of its Dreamliners. AA’s 787-8s will drop from 28 to 20 seats in business class. Meanwhile, its 787-9s offer only 30 seats in business class.
That’s a huge difference. Gary Leff from View from the Wing rightly notes that not all markets may be able to support business class cabins as large as United.
I recently flew a retrofitted 777-200 with United’s new Comfort Plus (premium economy class) seating. These seats came at the expense of economy class, not business class.
> Pictures: Testing Out United’s New Premium Economy
I don’t like that Nocella leaves open the door for reducing the size of business class. I also rarely see a business class cabin depart with open seats. Even so, it would not surprise me if United creates more “HD” (high density) configurations like on the 777-200s they currently use for some transcon and Hawaiian traffic.
CONCLUSION
For now, the status quo remains. United has a far better ratio of business class to economy class seats on many aircraft. But that may change. United has left the door open. Full transcript of the conference call here.
image: United
> Review: United 777-200 Polaris Business Class Chicago To Frankfurt
I take this to mean the introduction of the future premium-heavy 767. UA in most cases has little trouble filling J on most routes, even before non-revs and upgrades are taken into account.
Who says reducing?
I’m SFO-based here and even two weeks out, many flights (especially to london, Frankfurt, Hong Kong) are completely sold out in J), whereas AA is half full.
Given how premium some of UA’s markets are, and how many corporate contracts there are, I think UA could fill an 80 J cabin on some of its routes, similar to how BA is able to fill 747s with 86J seats, and not even counting first class!
I’m sorry but this is a clickbait headline. United in no way indicated it might decrease the number of business class seats. It actually indicated that it’s pleased with the number as of now. Please don’t mislead like that again. You’ve been credible in the past, but this isn’t worthy,
The title was a question, not clickbait.
Betteridge’s Law says no.
https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines
I think its the reverse. United is going to unveil a at least 14 767-300s with 46Polaris/22PE/99Y. So; I think you have the reverse perception.
That comment is DEFINITELY about the low-density, 46 seat business class B767 that will be introduced soon. No way would United reduce business class seats with premium hubs like EWR, SFO, IAH, and even ORD. Nocella even emphasized this very point for most of his comment.
It’s all hit or miss .. some days full. Sometimes full of non revs. I personally think AA/DL have lost their minds. UA will take a lot of business from them. The days they go out with empty seats is just cost of doing business , you don’t want to risk turning away premium clients.
As a side note , DL One Suites to China and Seoul been empty a lot from what I hear and they have only 28 on an A350. United must be doing something right.
This doesn’t really make sense. If United just posted great earnings and he said they have a system full of premium-passenger dense hubs… how does this equal fewer business class seats? And why compare a successful company like United with an airline like AA that is tanking? I guess I just disagree…though United has unpleasantly surprised me in the past!!
I think you are confused with what he was trying to say. I feel like he is hinting towards even larger premium cabins for UA (hence high-density 767s) since their hubs are in the largest business markets in the US.
I hope you are correct.
Agree on all my flights Business has been completely full. I always wonder how they decide between who gets upgraded to open seats vs filling them with non-rev.
I always see a bunch of non-rev in Business, which you can generally spot by how they are basically incommunicado, dressed per the requirement.
It’s a simple rule Mike; revenue before non-revenue. Non-revs get the last available seats. That’s how it works.
Matthew, i love your posts and even chuckle at you non-headlines or clickbaits.
But honestly, how did you come to the conclusion that the highlighted sentence (or frankly any part of those 2 paragraphs) meant that United is intending to reduce the number of seats in business class?
Frankly i don’t see it no matter how many times i read it. And i don’t think UA has any intention to do so. They have healthy load factors in premium cabins and i don’t see why they’d want to change that.
You continue to amaze me.
I look at what Delta and American have done and note that United often follows the competition. It just wouldn’t surprise me.
It can only be adding premium seats. I see the 767 has been mentioned as a candidate for increased J and I think this would make sense.
An example, I randomly picked London to New York, 4th Dec-11th Dec. This is a 767 route. The “basic” economy tickets start at £271 RT, which after you strip out the taxes, the base fare+YQ going to United is only £99 (!) Even if you buy regular economy they will only get £160,so it’s not surprising that WOW air are struggling. Even if you pulled out the Saturday night stay and do a Tuesday-Friday trip the fare only goes up to starting at £298.
In contrast, United wants over £4,000 for a RT business class ticket…
Well considering Delta and American still have first class on trans Atlantic and Pacific routes, it would make sense to me that they remove some seats in business as they still offering three class option. However United airlines is moving towards two-class option plus a premium economy product. As UNITED has eliminated first class I don’t understand why they are thinking about removing seeds from business class. Especially on premium markets we are all 50 seats are fully sold out??
Hopefully with improved earnings United is confident and smart enough to think of it’s business class as a revenue opportunity. Even if they fill some of those seats with co-pays/miles, fare specials, etc that’s still more money than they should be earning off of seats in economy.
American’s strategy is just bizarre and indicative of the management they have at this time.
I fly quite a lot of UA in business and usually business is going out full.
Personally speaking I don’t like to book American because of their IRROPS and reliability issues. They claim weather issues when cancelling flights where all other carriers don’t seem to be affected. If American isn’t able to sell all of their premium seats and thinks they should have less the real issue might be that people who actually depend on a flight to make a meeting or for other business just don’t trust them. I certainly don’t. And usually end up booking a carrier like Spirit or Southwest if I can’t fly UA or Delta on the same route.
I wonder if the domestic first class cabins could be affected. It’s hard to tell how many upgrades are given, as when there’s too much inventory, the Gold and higher are upgraded before check-in starts and don’t show as standby upgrade cleared. I think they do this to make it look like you have to buy a first class ticket to get a seat up front. If there are routes where the back of the plane fills, and the front is mostly upgrades, they are leaving money on the table that could have been sold as a few more Y seats.
On flights under 3 hours, a business cabin like those on intra-European flights might make more sense. A blocked middle seat with a variable number of rows in business would give more flexibility.
…”And I think, we actually will have more to say on this in the future as we make sure that we have the right number onboard every single aircraft we have”.
——
This statement and with Kirby at the helm ? He’s the king of dumb-down and cheapen what works and has worked perfectly fine. Now they just have to come up with the usual buzzwords that blame the passengers – “this is what you wanted, we’re listening, etc”. What they really want to do/say is we will give you less seating, more uncomfortable seating, charging more money so we can continue to line our pockets.
United, wake up and remind Scott Kirby he no longer works for American. …..and all those billions of profits?…..how about RESTORING.PENSIONS.to pre-merger UAL retirees ???
Here is what was reported in the WSJ yesterday:
“United Continental Holdings Inc. said on Wednesday that unit revenue from international premium seats grew 3.7 percentage points more than unit revenue from coach seats during the third quarter. Delta Air Lines Inc. DAL +0.41% said last week that revenue from business cabin and premium products rose 19% during the third quarter, compared with a 3% increase in main-cabin revenue.
“We continue to see very strong demand,” United President Scott Kirby told analysts and reporters during a conference call on Wednesday. “This is one of the best revenue environments we’ve ever seen.”
Andrew Nocella, United’s chief commercial officer, said he expects business-class cabin yields, a measure of prices paid per mile per passenger, to keep rising. He said much of the increase in United’s premium revenue has come from filling more seats rather than raising prices.
I think we’re going to have both,” he said.”
And this from the same article:
““The people in the front of the airplane have always paid the freight,” said Mike Boyd, a Denver-based aviation consultant. “The people in the back are kind of riding along.”
Such passengers accounted for about 5% of international air traffic but 30% of passenger revenue in the first seven months of the year, according to the International Air Transport Association.
Premium and economy fares have diverged in international markets in recent months, with premium pricing “continuing to show more resilience” than economy-class fares, IATA said on Wednesday.”
Now, it could be that some routes just don’t support premium prices or products (such as Hawaii, apparently), so fewer premium seats on those routes may make sense. But this seems to be saying that they and their competitors have been selling more J, and that is what is driving their growth in revenue. So fewer seats on business routes seems unlikely to me.
There is the suggestion, too, that we will be seeing prices go up (and I think I have been seeing that, looking out next year). But it is ultimately all about supply and demand, and things can change.