The Skift Airline Innovation Report is our weekly newsletter on the business of airline innovation. We look closely at the technological, financial, and design trends at airlines and airports.

Brian Sumers writes and curates the newsletter, and we send it on Wednesdays. You can find previous issues of the newsletter here.

We often think airlines passengers will do anything for a deal. That’s usually true, but as we learned recently from Southwest Airlines, there are limits.

Southwest parked all of its older, less fuel efficient Boeing 737-300s late last year, and while it has been replacing them, the fleet in the first quarter was smaller than a year ago. However, instead of culling its schedule, Southwest has added capacity in early 2018.

How? The trick is to fly each airplane longer each day. Usually airlines accomplish this by adding red-eyes, taking an airplane that ordinarily sits overnight and flying it west to east. But Southwest has never flown red-eyes, so it added more early morning and late night departures. On average, each Southwest aircraft flew one more trip per day in March compared to a year earlier.

As I wrote in my story, Southwest told investors the new schedule caused two problems. First, unit revenue was weaker than expected, in part, because passengers who bought 5:30 a.m. flights expected discounts. Second, load factor suffered, suggesting passengers weren’t flocking, even at cheap prices. “If you fly when people don’t want to fly, they don’t want to fly your airplanes,” consultant Robert Mann told me.

The good news: With new deliveries, Southwest soon will have more planes than before it retired the 737-300s, and will no longer need to stretch the fleet.

What do you think of Southwest’s decision to add more early and late flights? Reach me via email [bss@skift.com] or Twitter [@briansumers].

— Brian Sumers, Skift Airline Business Reporter

Stories of the Week

Southwest Tries to Do More With Less Because of a Temporary Aircraft Shortage: You may have read my introduction and wondered why Southwest doesn’t fly red-eyes. The answer is, I don’t know. Southwest used to say it didn’t fly overnights because its computer system couldn’t handle them. But a spokesman told me that’s no longer true. “The capability to operate red-eye flights is available as a future opportunity,” the spokesman said. I have contacted Southwest Chief Revenue Officer Andrew Watterson, who promised me a more thorough answer soon. Stay tuned.

American Airlines Disses Airbus and Orders 47 Dreamliners: American is now the biggest 787 customer in the Western Hemisphere, according to Boeing. That’s good news for travelers who prefer quiet, comfortable airplanes. It’s also good news for technicians, who can expect a maintenance honeymoon for the new jets.

One Fallout From Long-Haul Battle on Airfares: No Free Checked Bag: If you read this newsletter, you probably know many U.S. and European airlines have implemented transatlantic basic economy fares. But average travelers don’t follow it so closely. Skift freelancer Micheline Maynard asks whether passengers will be shocked when they show up to the airport and an agent asks them to pay for a checked bag. The answer: Probably.

Air Canada Launches New Economy Fares to Compete With Low-Cost Carriers: Air Canada claims it now has an economy class fare for all traveler segments, from the most cost-conscious to the least. If you buy the most expensive ticket, Air Canada will throw in a voucher for free food on board. If you buy the cheapest, you’ll pay for nearly everything, including bags and seat selection. You won’t earn frequent flyer miles either. Skift contributor Grant Martin has the story.

Skift Forum Europe Preview: Ryanair CMO On Being More Customer-Friendly: Ryanair’s Kenny Jacobs is a featured speaker at the Skift Forum Europe on April 26. To preview his talk, we have published an interview from last year in which he speaks about the carrier’s digital transformation. “When I came in, we had a website that looked like a Hooters website,” he told me. Not anymore.

World’s Largest Car-Seat Manufacturer Wants to Disrupt the Airline Business: More companies are producing airline seats. That’s good news for carriers, which have long complained about production delays from existing suppliers. It’s not clear how much it matters for consumers. Airlines don’t allot much space to each economy seat so there’s not a lot of room for innovation.

All the Amenities Airlines Are Offering for Healthier Flights: Here’s a secret: Editors love trend stories, whether they highlight a real trend or a faux one. This is a trend story from The New York Times, explaining wellness programs at airlines. The piece mentions that several airlines, including United Airlines and British Airways, offer a digital meditation channel on their in-flight entertainment systems. But does anyone watch? Similarly, the Times says airlines now offer healthy snacks. Does anyone want them? I keep hearing passengers crave junk food, no matter what they say.

The Secret Other Reason Basic Economy Is Everywhere: When U.S. airlines started selling basic economy fares, they said they needed them for a simple reason — to compete with ultra-low-cost carriers. But clearly, that’s not their entire purpose. Airlines have been using basic economy on routes where there’s no discount competition. “It’s really about keeping their biggest spenders spending, a new variation on the old Saturday-night stay requirement,” Scott McCartney wrote in The Wall Street Journal.

Bidets on Planes

If you read this newsletter regularly, you know I’m in Hamburg this week at the Aircraft Interiors Expo.

I’ll be looking at many products that may, or may not, someday appear on an airplane. But one has caught my attention. It’s the Revolution Premium Bidet from Zodiac Aerospace, which will have its world premiere this week. The company will show it off along with its latest urinal for long-haul flights.

According to Zodiac, the toilets will have “a gentle dual front and back warm water feature.” The company promises “significant reliability improvements” compared to current-generation airplane bidets.

I have only noticed them while flying Japanese airlines, but Zodiac apparently is calculating they may have wider appeal. In a couple of recent tweets, Skift Founder and CEO Rafat Ali endorsed the idea, noting the “majority of the world population actually uses water instead of toilet paper.”

“Airlines have been asking us for new bidet features, and we listened,” Zodiac Water and Waste Aero Systems CEO Sebastien Weber said in the release.

End of an Era

First United Airlines retired its Boeing 747s. Now the airline has committed to a date to ending first class seat sales on three-cabin airplanes.

This is not a surprise. United executives said in 2016 that they’d stop offering first class once the airline upgraded its business class seats. Only two aircraft types — the Boeing 767-300 and the Boeing 777-200 — still have it, and not on all planes.

In a message to employees, United said it stopped selling first class on 767s in March, and will end first class sales on 777s on June 20. The seats will remain for a little longer — it takes awhile to retrofit aircraft — but passengers will not be able to buy them. Instead, United will upgrade passengers at the last minute.

This leaves American Airlines as the only U.S. airline with a true first class, and it’s only available on two aircraft, the A321T and the Boeing 777-300ER.

I wrote a story last year about the disappearing first class cabin. As Air Canada President Ben Smith said, “you look at the value proposition and the cost differential, and the amount of real estate it takes up can hardly be justified. There’s a very small market that sits between business class and a private jet that wants to fly in first class. From the biggest financial centers, perhaps.”

In some ways, it’s surprising United’s first class lasted this long. In 2015, former United CEO Jeff Smisek told a trade journalist, “It’s a money loser.”

Subscribe

Skift Airline Business Reporter Brian Sumers [bss@skift.com] 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 him an email or tweet him.

Subscribe to the Skift Airline Innovation Report

Photo Credit: Southwest Airlines typically parks all of its aircraft overnight, which is unusual for an airline. In this photograph, Southwest Airlines ramp supervisor Steve Belch, left, confers with ground crewman Dillard Blue at Dallas Love Field. LM Otero / Associated Press