The demand for business class and premium economy has never been greater. With the global economy still strong, transatlantic demand for higher tier seating is growing faster than the demand for economy. United think they’ve spotted an opportunity here.
Rumour has it that they are looking to reconfigure their 767-300s for key business markets. The mooted plans involve shrinking their economy cabin and adding more premium seats to cash in on the rising demand.
While unwilling to disclose exactly what their plans are, CEO Oscar Munoz talked to Skift, and dropped some pretty big hints;
“I won’t say exactly where we are headed, but business-to-business markets are going to be the ones that we are going to fly those airplanes to. New York-London is probably an obvious one. I can’t tell you how many people are flying that every day. High [business class] makes all the difference in the world.”
Typically, a United 767-300 will have between 30 and 34 business class seats. They don’t have premium economy. This leaves space for in excess of 180 economy class seats on most aircraft. That’s always been the way, but times they are a-changing.
What will United change?
With multiple low cost carriers taking chunks out of the economy market, it makes sense for United to look for another way to turn a profit. Business class seats, particularly of the lie flat variety, are making big bucks for legacy airlines, so it makes sense to offer more of them.
The carrier is being typically tight-lipped about their plans, but it has been suggested that the premium heavy configuration could feature as many as 46 business class seats. In addition to this, it may have 22 in premium economy and just 99 in economy.
Flying more business class seats to key business markets makes sense, but could United be looking at something even more outlandish? Some have suggested they might even turn a few aircraft over to 100% business seating, which would be a first for any US airline and a bold move by Munoz.
Is an all business class service feasible?
Why yes, it is.
Already, we’re seeing a rise in boutique airlines such as La Compagnie, which runs a transatlantic all business service on the Boeing 757. They’re investing in A321LRs and launching new routes, such as their latest addition of New York to Nice. The French company’s route runs from Paris Orly to Newark, with each flight pretty much full to capacity.
British Airways BA1 is another all business transatlantic option, running from London City to New York. Using a teeny tiny A318, BA whisk their passengers across the Atlantic in style and comfort. It destroys BA’s transatlantic fuel economy statistics, but is a popular choice with business travellers jetting between the two cities.
Although the two services are similar in nature (small planes, all business), their business models are quite different. La Compagnie is essentially a low cost carrier but with a focus on business class travel, with round trips starting from as little as $1,500. Conversely, a seat on BA1 will set you back over $7,700.
How can a business only flight make money?
In general aviation terms, the more bottoms on seats, the more profit the flight will make. So how can a flight which has seriously reduced the number of available seats still expect to make money?
The reason business only works for both these airlines comes down to one simple fact: fares. On a regular two or three class transatlantic flight, it’s not the hundreds of passengers flying economy who are making the airline money. It’s the handful of people in business who are really paying the bills.
By focussing only on business, both airlines are able to turn a profit at different ends of the market. BA wins on convenience and exclusivity, with passengers willing to pay the price for it. So much so, in fact, BA can often run the route with the A318 far less than full.
La Compagnie, on the other hand, are charging only a smidge more than premium economy from many carriers, and generally a bit less than most business class fares. Passengers who want to upgrade without paying through the nose will pick La Compagnie, allowing them to make almost every flight at full capacity.
In an age where cash strapped airlines are increasingly squishing us into smaller and smaller seats, and even reducing bathroom sizes to little more than a closet, airlines that do business only are a breath of fresh air.
Whether United will go down a business only route remains to be seen. But the facts are plain to see, that if they did want to, it could potentially work.