By adding a new premium-heavy configuration, United Airlines will be increasing operational complexity. It is hoping it can offset that with increased revenue. Will the plan work?
Let’s say you’re designing a seating plan for one airplane in your fleet. Would you rather have a standard configuration, even if it isn’t best for every market? Or would you prefer several seating plans to match capacity to demand?
The easy answer is you want the best configuration by route. If you have a transatlantic operation, your airline may want 40 (or more) business class seats for London and Geneva, and 18 for Barcelona, Nice and Naples. On those leisure-oriented aircraft, you can add more economy class seats for vacationers.
Here’s the problem. Because it is challenging to change seating plans once an aircraft is in service, many airlines prefer one standard configuration for each plane type, even if that means having too many premium seats for Nice and too few for London. You may lose revenue, but you can run a more efficient operation, because you can schedule any plane on any route.
Still, some airlines are willing to take chances on multiple configurations. And as I reported last week, United Airlines is apparently joining the group with a special interior to chase premium revenue in key business markets.
Rather than putting a standard configuration in its Boeing 767s — United generally has 30 business class seats and 184 in economy — the airline soon is likely to unveil a new product with 46 seats in business, 22 in premium economy, and only 99 in economy.
I asked United CEO Oscar Munoz about it last week. “Business-to-business markets are going to be the ones that we are going to fly those airplanes to,” he told me, saying the revenue bump will outweigh operational challenges.
What do you think of United’s strategy?
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Virgin Atlantic Steps In to Save Flybe: Virgin Atlantic has big name recognition, but it is a small airline, and it flies only long-haul routes. It has experimented in the past with trying to bring feed into its London Heathrow hub —remember Little Red, which closed four years ago? — but now it is trying again. As my colleague Patrick Whyte reported, Virgin Atlantic and a consortium of other buyers expect to take over struggling UK regional airline Flybe.
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New Skift Research Report
My talented colleague Seth Borko from Skift’s research team has a new report about airlines called U.S. Airline Sector: Skift Research Estimates 2019.
In it, you’ll learn:
- The U.S. passenger airline market size estimates, 2013–2019.
- How U.S. passenger revenue is split between domestic versus international travel and coach versus business and first class seats.
- Market shares for all major U.S. air carriers.
- Important operating statistics for the U.S. air industry, including passenger demand, aircraft seat capacity, and unit revenue.
You must buy the report, but Seth is a talented analyst, and I think you’ll find it worth it.
Skift Senior Aviation Business Editor 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 him an email or tweet him.
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Photo credit: United Airlines may soon unveil a new configuration for some Boeing 767s. The seating plan could include premium economy seats like the ones pictured here. United Airlines