United Airlines Is Starting A Huge Battle To Win Premium Customers

With all the changes going on with United Airlines business class, we reckon they’re on a mission to win all the premium customers. Well, perhaps all  the premium customers is pushing it a bit, but there’s definitely a United focus on premium passengers right now.

United Polaris
United are adding massive capacity to their premium cabins

From installing a crazy 46 Polaris class business seats on their 767s to specifying a new aircraft with a whopping 20% first class seating, United Airlines business class is undergoing something of a remodel. A bit like their staff, not to mention their fleet.

Altogether, United Airlines premium passengers can benefit from an additional 1,600 first and business class seats added to the fleet over the next couple of years. Which begs the question, why?

What’s going on with United Airlines business class?

We recently reported that United plan to fit out their 767-300ERs with as many as 46 business class seats. This will equate to a drop in passengers of 47 seats compared to the current layout, with 99 in economy and 22 in premium economy in addition to the 46 Polaris class seats.

United 767 reconfiguration
The 767 will have a massive uplift in Polaris business class, losing 47 seats in the process

They’ve already reconfigured most of their three-class 767s and are working on their 21 two class 767s now. The first of this second tranche should be up and running pretty soon, with all aircraft due to be completed by 2020.

These aren’t the only aircraft which will be getting more of a United focus on premium passengers. Their fleet of 67 A319s are going to start being reconfigured later this year, which will include adding more first class seating.

United A319 reconfiguration
United will reconfigure their A319 to feature four more first class seats

The proposed redesign means first will grow from eight seats up to 12. Economy Plus will shrink to accommodate this, from 42 seats to 36 while economy will stay at 78.

United Airlines premium passengers can expect positive changes on the A320 too. The 99 aircraft in their fleet are scheduled for reconfiguration in early 2020, to add four first class seats to each cabin.

United A320 reconfiguration
The A320 will get four more first class seats

The plans with these mean first will go from 12 to 16 seats, while economy plus will lose three seats to go from 42 to 39. Economy will lose one, taking it from 96 to 95 seats, meaning there will still be the exact same number of passengers on the flight, but more of them will be premium passengers – now that’s clever.

One of their new aircraft on order is also telling about the direction in which the airline is headed. United currently have 50 CRJ550s on order, a regional type aircraft which usually seats around 76 passengers. However, United have another plan.

The new CRJ550. Photo: Bombardier

Their CRJ550s will have a staggering 10 first class seats. In addition to this, they’ll have 20 economy plus and just 20 regular economy seats. That’s a really premium focus, and an unusual move by United.

United CRJ550
The brand new CRJ550 will feature 20% first class seats

When we’re talking about aviation profitability, the more passengers on the plane usually equates to a more profitable flight, so why on earth would United be taking seats out of their aircraft?

Why would United focus on premium passengers?

United has already recognized that the business class market is growing at an exponential rate. CEO Oscar Munoz previously said that:

“…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.”

We speculated on whether United could operate an all business class transatlantic flight, and we still believe they could make it work. But why would they?

The reason it makes sense for United to focus on premium passengers is to carve itself a niche. They’ve always been a full service airline, so to try and compete with low cost carriers just wouldn’t make sense. The market is flooded.

Norwegian Airlines
Norwegian’s rock bottom transatlantic fares have left them in financial strife

With the likes of Norwegian offering rock bottom transatlantic fares, and home grown LCCs like Spirit and JetBlue cornering the domestic market, trying to compete on price alone is just not going to work for them.

The airline has instead opted to take the pass less travelled, bumping up its offering for premium passengers. The business market is booming; Apple alone spend $150m a year on United Airlines business class seats, and they’re not the only one.

United Polaris
United Polaris

Business class, along with premium economy and first, are far more profitable to airlines than economy. Often the 30 – 40 passengers in business will earn more than three times as much on a trip than the hundreds of passengers in economy.

The economics of flying, as explained beautifully in the video below, means that 45% of the passengers account for 84% of the airline’s revenue. United have recognised this, and are capitalizing on that fact.

It’s really interesting to see this unusual but potentially very well thought out strategy from an airline. With jet fuel prices on the rise, we’ve seen enough of airlines cost cutting and scaling back; for a change we have a carrier willing to take a risk and lead the way into a new era of flying.

What do you make of the changes going on at United? Let us know.