United’s Revenue Architect Plans to Add New Fees for Slightly Better Seats

United Airlines soon will charge extra money for what it calls preferred seats in economy class that do not have extra legroom or any other amenities but are considered more desirable, the airline’s president, Scott Kirby, said Tuesday in an interview.

It will depend on the aircraft, but the seats will be located just behind United’s extra-legroom section called Economy Plus. The seats available for the extra fee generally will be aisle and window seats passengers tend to prefer. Kirby did not say when United will implement the changes, or how much preferred seats will cost.

“We’ve got Economy Plus today, which has more legroom, but there are also rows that don’t have more legroom but they are at the front of the airplane,” he said during a discussion at the International Aviation Forecast Summit in Denver. “We are now going to let those people select those seats as well for a fee.”

Once, an airplane’s cabin consisted just of a coach and first class cabin. But today, most airlines are segmenting offerings so passengers get exactly what they pay for — and nothing more. As the president of three airlines — US Airways, then American Airlines and now United — Kirby has led the charge to slice and dice planes’ cabins.

American and Delta also charge in advance for the most desirable regular-legroom seats, unless travelers are elite frequent flyers with the airline.

“It’s a better product,” Kirby said. “I don’t know why airlines would be unique in offering lower prices for a better product. That’s what we do.”

Under United’s new system, many seats, including some full rows in the back of the aircraft, will remain free of additional seat fees. But with fewer full rows available for “free,” families may have some trouble booking three seats across, particularly if they buy tickets late.

Kirby acknowledged that might be an issue, but said it makes sense for United to charge more money for seats passengers want.

“If you go to a concert, and one of you wants to sit up front and the other three want to sit in the nosebleed, do you think you should all pay the nosebleed seat price to sit up front?” he said.

United will give preferred seats to free to many of its corporate customers.

Basic Economy

Kirby is also an architect of United’s Basic Economy product, another part of the airline’s segmentation strategy. Passengers who buy it cannot choose seats in advance, or change their tickets, even for a fee. They also board last, and they’re not permitted to bring a large carry-on bag for the overhead bin.

Delta and American have similar products, but Delta does not prohibit large carry-on bags. American does, but executives said last month they will again allow larger carry-ons beginning on Sept. 5. Kurt Stache, American’s senior vice president for marketing, loyalty and sales, said Monday in a group interview that the airline had been fearful of losing customers to Delta because American has had a less generous bag policy.

“In very competitive markets we were finding ourselves not able to compete because of the product attributes,” Stache said.

United has so far declined to match Delta and American on carry-on bags. That may change, but on Tuesday, Kirby declined to comment about the issue. Federal competition rules bar airline executives from talking about future pricing decisions.

Still, in response to a question about United’s possible change, he said, “I do believe in segmentation.”

More Flat-Bed Domestic Seats

United likely will add flatbed seats to some narrowbody Boeing 737 Max 10 aircraft when they’re delivered in two years so it can expand the number of domestic flights it offers with a international-style business class product, Kirby said.

Historically U.S. airlines have only flown international-style seats on two domestic routes — New York to San Francisco and New York to Los Angeles. But in recent years, in part because of competition from JetBlue Airways, which has aggressively expanded its Mint business class product to cities like Seattle, Las Vegas and San Diego, carriers have expanded the number of routes on which they offer flat-bed seats.

United now flies aircraft with true business class seats regularly to Boston from San Francisco, and flatbed seats also pop up on other longer routes, such as Los Angeles and San Francisco to Washington D.C. and Newark to San Diego.

Kirby said United already has a prototype seat for the 737 Max 10, and will test it this fall with customers.

“Trying to fly from Denver to LA, I think you would have a hard time making the economics of lie-flat work,” he said. “But would Newark to Seattle work? Probably. Would San Francisco to DC work? Probably. We think there is demand, but it’s almost exclusively transcon demand.”

Faster Polaris Timeframe

United’s flatbed-equipped 737s would enter the fleet just as the airline completes its multi-year project to add its new Polaris-class seats to many of its widebody aircraft flying internationally.

That project, which CEO Oscar Munoz unveiled in 2016, had been delayed because of a problem with the seat vendor, Kirby said, but it is now on track.

“The vendor originally couldn’t deliver the seats,” he said. “We did tons and tons of work with the vendor and also brought on a second vendor that started to manufacturer seats. So actually today our timeline for completing the Polaris seats is a year a head of where it was two years ago when I got to United.”

Until 2020, though, many passengers likely will remain confused. Now, customers receive what the airline calls Polaris service on all long-haul flights, but relatively few aircraft actually have the new seat, also named Polaris.

“We have the product but we don’t have the seat, and that has been a challenge in communication,” he said.