The Skift Airline Innovation Report is our weekly newsletter focused on the business of airline innovation. We will look closely at the technological, financial, and design trends at airlines and airports that are driving the next-generation aviation industry.

We also provide insights on developments in passenger experience, ancillary services, revenue management, loyalty, technology, marketing, airport innovation, the competitive landscape, startups, and changing passenger behavior. I write and curate the newsletter, and we send it on Wednesdays. You can find previous issues of the newsletter here.

On a continent where flyers expect many short-haul one-way flights to cost 20 or 30 euros ($24 to $36), if bought in advance, British Airways has a choice. It can ignore budget-conscious passengers and let them continue to defect to Ryanair or EasyJet, or it can lower its costs to compete.

After more than a decade of ignoring them — perhaps hoping they’d go away — British Airways is fighting. That’s bad news for customers, who hate that their beloved brand has removed free food from short-haul flights, and moved to shrink legroom and width on many planes. But it’s probably the only option. Legacy airlines like British Airways still make a significant portion of their revenue from corporate customers, but they can’t ignore everyone else.

This week, another story went viral about the airline’s cost-cutting plans. As it adds seats to some planes — a process known as densification — some aircraft will get seats that do not recline. Or, as an airline spokeswoman put it in an email, the seats “will be pre-reclined at a comfortable angle.”

That British Airways will add seats is not news. The airline long ago told investors it would densify its short-haul fleet, with planes having seat pitch of 29 inches — the same as EasyJet and two inches fewer than Delta Air Lines. The premise is simple: If British Airways adds more seats to each plane, it can charge less money for each ticket, and still profit from each flight.

Predictably, British tabloids have criticized the UK’s flag carrier. But this week, I spoke to a couple of insiders with experience at ultra-discount airlines that use seats that don’t recline. And they told me this is probably good news for the airline and its customers.

Here’s why:

  • It’s feasible for an airline to offer 29-inch pitch seats that recline. Rouge, Air Canada’s low-cost brand, has 29-inch pitch on its A321s, according to SeatGuru. But that often isn’t so pleasant for customers. In a space that tight, the discount airline insiders said, travelers don’t want to worry about the passenger ahead of them reclining into their lap. Seats that don’t recline, one insider said, are probably “more palatable” to customers than a typical 29-inch pitch seat. As BA’s spokeswoman put it, “This also has the benefit of helping to preserve space for the customer in the seat behind.”
  • Airlines hate moving parts, and though it seems like seat recline would work via a simple mechanism, it’s not so straightforward. A kid might repeatedly whack the recline button, or an adult might try to force the recline further than it goes. “Those things break a ton,” one insider said. The maintenance can be deferred, so flights wouldn’t be canceled, but broken recline must be fixed at some point.
  • The insiders say they’ve crunched the numbers and found airlines might gain a small fuel burn savings from seats that don’t recline. Simple seats are generally lighter because they have fewer parts, and a lighter plane is cheaper to operate. Over time, the fuel savings can add up, but the insiders still say maintenance savings are far greater than fuel savings.
  • The insiders say passengers don’t complain much about the so-called pre-reclined seats. In the beginning, it may come as a surprise to passengers, and some might be upset. But over time, they get used to it.

Do you know more about why an airline would use seats that don’t recline? Let me know via email [[email protected]] or through Twitter. I’m @briansumers.

— Brian Sumers, Airline Business Reporter

 Stories of the Week

The Airport of the Future May Evolve From Transport Hub to Attraction: One architect told me he dreams of putting parks, complete with wildlife and plants, into airports. Another said future airports probably won’t need parking garages because we’ll all arrive in driverless cars. A third predicted giant airport check-in lobbies eventually will disappear because travelers won’t need much more than a place to drop bags anymore.

Airlines Turn to Private Messaging to Avoid Social Media Blowups: A few years ago, airline social media teams lived in fear that a celebrity or other influencer would send a viral tweet about the airline. That’s still a concern, but according to Joshua March, co-founder and CEO of Conversocial, many more customers are trying to get issues resolved via private messaging. “If you look at what customers want, they want a quick and easy response,” he told me. “Tweeting publicly was a way to get attention. But people don’t want to complain publicly if they are going to get a response relatively quickly.”

EasyJet Is Transforming the German Market With Launch of Domestic Routes: EasyJet bought some of Air Berlin’s assets in Berlin, allowing it to grow in the German market. It’s hoping to pick up some corporate customers with frequent flights to business destinations, but can it compete with Lufthansa?

JFK Airport’s Terminal Setup Contributed to the Storm-Recovery Fiasco: Most of the world’s airports have lots of “common-use gates” that can be used by any carrier. Not JFK. It operates under a different model, and that has been a big problem over the past week.

Bag Fees Were the Most Successful Airline Business Model Change of the Past Decade: Welcome to Micheline Maynard, an accomplished journalist and author, and former Detroit bureau chief for The New York Times. She’s Skift’s newest aviation contributor. In her first piece, she explores the bag fee phenomenon at U.S. airlines. Amazingly, it has been almost a decade since American Airlines began charging for a first checked bag.

U.S. Travelers Soon Will Need Enhanced IDs to Board Planes — For Real This Time: For more than a decade, we’ve heard some U.S. state IDs might not be sufficient for boarding an airplane. But whenever a deadline has been announced for states to comply, the federal government ends up postponing it. Now, the Trump Administration says it means what it says — soon U.S. travelers will need enhanced IDs to fly. Bloomberg’s Justin Bachman has the story.

United Airlines Fills Out Route Map With 8 New Routes: In late 2016, United President Scott Kirby promised his airline would grow in smaller U.S. cities, where fares are generally higher than in larger cities. This week, United announced a slew of new routes, and there are some unusual ones, including San Francisco to Madison, Wisconsin — a long route on an Embraer E175 regional jet — Denver to Appleton, Wisconsin, and Los Angeles to Eureka, California. If you follow this closely, you know Kirby believed United grew too much on international routes under its previous leadership, and erred by not starting more domestic flights. Ben Mutzabaugh of USA Today has the story.

As Alaska Air Cuts Costs, Employee Discontent Grows and Passenger Loyalty Is at Risk: The Seattle Times reports that many of Alaska Air’s unionized employees are upset with management for being too obsessed with cost cuts. I would have preferred less emphasis on front-line employees for this story, and more about morale at headquarters. But it’s still an interesting read. The takeaway: Mergers are hard.

Rival Airlines Emirates, Etihad Step Closer With Security Pact: The two Gulf airlines will share information and intelligence, according to Reuters. Is this a first step toward a merger?

Boeing 747 Retirement: Farewell to the ‘Queen of the Skies’: CNN’s Jon Ostrower rode on the last U.S. airline Boeing 747 flight. For real this time. There have been lots of “lasts” for United and Delta, the final two U.S. operators of the double-decker plane. But this really was the final one — a ride from Atlanta to Marana, Arizona, “an arid boneyard for stored and cannibalized jetliners.”

Coming Up

I’ll profile two airlines with unusual business models — JetSuiteX on the West Coast, and OneJet, in the East and Midwest.

The airlines don’t love being compared with each other because they have slightly different strategies. JetSuiteX uses private terminals, and it’s willing to launch a route, like Burbank to Oakland, even if Southwest flies it. OneJet uses traditional terminals, and tries to fly routes where there is no competition, such as Pittsburgh to Hartford.

But the basic premise is the same. I spoke to both CEOs this week, and they said they see a niche because major carriers have pulled too much capacity from small- and medium-sized airports. JetSuiteX sees opportunity in places like Santa Barbara and Carlsbad, California, while OneJet sees it in Pittsburgh, Milwaukee, and Kansas City.

Both airlines seem to think the Embraer E135 is the right jet for long-term growth. Regional airlines and mainline partners hated the E135 a decade ago, saying the 37-seat jet had poor economics for a typical hub-and-spoke network. But they’re cheap to buy now, and OneJet and JetSuiteX want them. Each is putting 30 seats on the aircraft.

“You are just seeing such extraordinary values in terms of the acquisition prices,” said Matthew Maguire, CEO of OneJet.

What do you think of these two airlines? Do you think they can make it?

Meet Me in San Francisco

Reminder: Skift will hold a free event on January 30 in San Francisco to share our Megatrends — an overview of what we expect for travel in 2018. There will also be refreshments!

It’s at the The Pearl, located at 601 19th Street in San Francisco, and goes from 6 p.m. to 8:30 p.m. I’ll be there, and hope you can join.

Tickets are available here.

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Skift Airline Business Reporter Brian Sumers [[email protected]] curates the Skift Airline Innovation Report. Skift emails the newsletter every Wednesday. Have a story idea? Or a juicy news tip? Want to share a memo? Send me an email or tweet me.

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Photo Credit: British Airways hasn't announced many changes to the A319 interior, pictured here. But it is making some big alternations to its A320 and A321 fleet. Stuart Bailey / British Airways