Should UAL do the unthinkable with their "premium" seats?

The "Southwest crowd" tends to be made up of more folks who pay full Y fare than any other airline.

A cap of $337 one way on the tickets that I buy would be a savings to the government. Most of my tickets are more expensive than that.
Again, govt Y is less expensive than full Y, but it's still not cheap.
 
Huh? UA flies to both ORD and DEN from DCA. Plus, you can earn UA miles on the hundreds of US flights (mainline and express) from DCA.

How much do you fly? As a 1K, I'm looking for nonstops to my final destination; I don't feel like transferring through hubs in order to get to where I've got to go. UA's DCA flights take you to ORD or DEN and then feed you to the final destination. The ORD service is hourly, but the DEN service is significantly less. There is much better west coast/Pacific service out of IAD. The problem with IAD is that it is one of the worst airports in the country in terms of wasting my time and testing my patience. I accept that pain in order to go direct to my final destination (OK, sometimes I have to go through FRA/LHR/SFO/LAX if I'm going overseas; also some transfers for western destinations).
US service levels don't come close to United. Besides, I have to go with the contract carrier as a govt employee (OK, I can play with this a bit). The primary contract carrier out of DCA is American and IAD is United. I could also fly out of BWI, but that's a complete mixed bag - Southwest, US, United, American - and BWI is further from my house than IAD.

I understand that you are a US FF, but I've flown on US enough to know that I am less than impressed by the product. And I can almost be guaranteed a transfer in CLT, PIT, PHL, or PHX. DCA is not a hub for US, so it is at a disadvantage compared to United.
Besides, I can't use most of upgrade instruments (systemwide upgrades, confirmed regional-1s, 500 milers) on US metal. I've got to use my miles for upgrades - while I'm not opposed to using miles, I have more than enough SWUs, CR-1s, and 500 milers to almost always ride in C/F when I want to.
 
AA had the whole coach cabin as premium seating to distinguish them from the other guys. They eliminated it. They made a profit. UAL hasn't. As the OP pointed out - load factors are in the mid to high 80's - yet no profit. Surely it isn't just the folks in the back half of the cabin that is responsible for that situation.

American was being sued by OSHA due to the lack of legroom. They preemptively rolled out MRTC.
MRTC was a failure because it was a shotgun approach. I can tell you that most of us frequent flyers get ticked off when we aren't able to get a seat in E+.
Now, a little secret about frequent flyers at United and seating assignments. When a premier or above makes a seat assignment, the seat next to them is blocked off until the aircraft comes under airport control (4 hrs prior to departure). I like that. As long as the plane isn't packed, I've got an empty seat next to me. When I travel with my wife, I book us window/aisle and usually have a free seat in the middle (she's a premier associate).

For the Southwest crowd, additional legroom doesn't mean much. They are going to pay the lowest possible price for an airline ticket. It doesn't matter to most leisure travelers if they end up crammed into a pint sized seat. For road warriors who are tall, it matters greatly. At 6'1", I will always pay more for a seat on United when traveling for leisure (I've always paid more for leisure travel on United so that I could be guaranteed E+ or F/C).

People just move into those seats without paying for them anyway (on UAL) when the flights aren't full. When they are full, we don't (necessarily) charge a premium for them. Full flights have to sell all the seats, with most of the flights full, premium seats don't sell at a premium, so what's the point?

United's flight attendants have been cracking down on E- passengers moving into E+. And I can assure you that I don't allow anyone from E- to move into my row. I don't care if I'm the only one in all 3 seats; even Pamela Anderson isn't going to be sharing the row with me if she isn't booked into E+.
 
A cap of $337 one way on the tickets that I buy would be a savings to the government. Most of my tickets are more expensive than that.
Again, govt Y is less expensive than full Y, but it's still not cheap.
They may have more people that buy walkup Y Fares, but Companies, I would say not. Also companies are willing to pay a bit more cause it is a tax credit.
 
United's flight attendants have been cracking down on E- passengers moving into E+. And I can assure you that I don't allow anyone from E- to move into my row. I don't care if I'm the only one in all 3 seats; even Pamela Anderson isn't going to be sharing the row with me if she isn't booked into E+.
The FAs really have to crack down on the E+ poachers, especially since E+ seats can be sold as a buy-up at check-in.

We'll see how jetBlue does with their premium coach cabin. Midwest realized it didn't work in leisure markets and went to standard coach seating (with slightly more legroom, I think 34'), but now is coming back around and is supposed to add F seats to those all coach planes and operate seperate cabins.
 
OK Jetz, I know we have the don't ask don't tell thing, but are you now gay? :shock:

Email me at work sometime, I'm on global. ;)

:D
No, but my wife (Puerto Rican) sometimes gets that Lorena Bobbitt glaze in her eyes when she sees me looking at a blonde for too long. I've got to be careful with those new Jenny McCarthy Weight Watcher commercials - if one of those comes on while my wife and I are eating dinner, I could easily end up with a fork stuck in my leg. :rolleyes:

I don't have access to the AF global. Are you still @shriever.af.mil? I shot you an e-mail.
 
We'll see how jetBlue does with their premium coach cabin. Midwest realized it didn't work in leisure markets and went to standard coach seating (with slightly more legroom, I think 34'), but now is coming back around and is supposed to add F seats to those all coach planes and operate seperate cabins.

JetBlue has a different client base than United.
E+ is a selling point for United's corporate customers. I don't think that you'll find very many companies have corporate accounts with JetBlue due to their (lack of) route structure.
E+ should not be aimed at leisure markets. There is not enough revenue to be gained in those markets. While vacationers may complain a bit about cramped seating, it is usually much lower on their priority list than the ticket price. ie leisure travelers will search for the very cheapest ticket with very few other parameters considered. And when there are other parameters considered, the first is time of departure/arrival, not legroom.
I think that the only reason why Ted has E+ (since Ted is aimed at leisure markets) is that it is a consolation to those frequent flyers who would normally fly in F.
 
B6 is slowly moving to be geared to more corporate travel. They have to with the way their costs are increasing. They've even got a corporate travel web page now!
http://www.jetblue.com/about/corptravel/

Ted has to have E+ due to the all too frequent equipment swaps that put Ted on a mainline route. I can't imagine a guy on a full F ticket who gets told "sorry, we've had an equipment change. Enjoy economy minus." That's the way to lose corporate contracts. At least E+ eases some of that pain...
 
B6 is slowly moving to be geared to more corporate travel. They have to with the way their costs are increasing. They've even got a corporate travel web page now!
http://www.jetblue.com/about/corptravel/

Ted has to have E+ due to the all too frequent equipment swaps that put Ted on a mainline route. I can't imagine a guy on a full F ticket who gets told "sorry, we've had an equipment change. Enjoy economy minus." That's the way to lose corporate contracts. At least E+ eases some of that pain...
I remember when Braniff 1 tried "Texas Class" on some of the 727's. Those were reconfigured jets with the F compartment removed. That little experiment did more to get folks over to AA than anything else...Hourly flights from DFW-LGA were great...except when you were expecting an F class seat and found yourself on a "Texas Class" plane.
 
B6 is slowly moving to be geared to more corporate travel. They have to with the way their costs are increasing. They've even got a corporate travel web page now!
http://www.jetblue.com/about/corptravel/

Ted has to have E+ due to the all too frequent equipment swaps that put Ted on a mainline route. I can't imagine a guy on a full F ticket who gets told "sorry, we've had an equipment change. Enjoy economy minus." That's the way to lose corporate contracts. At least E+ eases some of that pain...


We're in total agreement on E+ being absolutely necessary on Ted; I hadn't considered the equip subs. That's another excellent point.

Where the likes of JetBlue falls flat on it's face for corporate travel are in two areas, frequency and destinations. JetBlue's frequency to destinations is nothing like you have from American or United. And to a lesser extent from Northwest, USAirways, Delta, etc.
I pulled up a city pair where JetBlue should technically be able to crush United; JFK to LGB (I used JFK-LAX for United) on Mon 21 May. JetBlue has 6 nonstops and 7 one stop flights. Pretty good coverage. United has 7 nonstops and 8 one stop flights - and this is does not include LGA to west coast connections. While United doesn't have nonstops to LAX from LGA, they have 14 one stops. JetBlue doesn't even offer the choice of going to the west coast from LGA. This was essentially a hub to hub city pairing for JetBlue. When one looks at the frequency to other business destinations, JetBlue does not fare well on frequencies.
JetBlue's destinations remain heavily concentrated in vacation destinations, not business destinations. This will make it hard to land many corporate contracts. And for those contracts that it does land, the odds are that the company contracting with JetBlue will offer multiple airlines to their employees.
 
Nice timing of Mr. Boyd to have some comments on Ted today...

Airline Industry Musings

Missing In Action: Ted

Anybody remember United's Southwest-killer, Ted?

The advertising has stopped, it seems. The quirky and expensive promotions are nowhere to be found. Remember, Ted was the mystical program that simply took some A-320s, re-painted them, put a few more seats in, and put them right back in service mostly where they were before, except that they were now were "low cost" airplanes.

Along with that, United gave the new sub-brand a persona, weaving the name into all sorts of aspects of the flight. "Ted wants you to be safe," says the inflight announcement. Silly plastic seat back cards announced "Ted tunes" and the same IFE earphones often found on other United airplanes were made "distinctive" with the addition of brightly-colored foam ear muffs. Wow, fun and frivolity and color in flight!

Unfortunately, most of the passengers, many of which were connecting from other United flights, had no idea what or who "Ted" was. Nor did they care. It wasn't a definable, separate airline, nor a separate route system. It was just a sub-fleet with a different paint job.

But according to United management - or, more likely the wizard outside advisors to which they paid hundreds of millions to tell them what to do - these simple changes were supposed to create a low-cost carrier, despite the fact that airport costs, fuel costs, aircraft costs, maintenance costs, and labor coststedgone.JPG (18871 bytes) remained the same.

Well, actually not, as the increase in seating capacity required an additional flight attendant.

The rest of the industry was dumbfounded with jealousy - the CEO of one of United's competitors lamented that he, too, wanted to find the magic paint United was using - one coat, and, voila! lower costs.

This doesn't include the millions spent on installing dual-jetways at several gates in Denver, for the "fast turns" that these wizard outside advisors had read were so important to low-fare airlines. This despite the fact that Ted-painted airplanes at Denver were actually part of the hub bank, just like the rest of United's flights there, so "fast turns" were not really a factor. But according to news reports, these back-door boarding contraptions have already taken out at least one airplane when it collapsed on the wing.

But, now, it seems that Ted, as part of United's multi-dimensional strategy, is AWOL. It seems the ad budget and the hype-stream have been shut off.

Lots of smoke and mirrors, and millions of dollars spent on a quirky marketing gaff that nobody outside of its creators ever really understood. The public never has grasped what Ted was supposed to be, especially since the fare levels, particularly at Denver, never really changed much, given that United had already matched Frontier, and the arrival of planes in a new paint didn't change that. Mileage Plus Premier-level passengers sure noticed, as those expected first class upgrades to places like Orlando, Phoenix and Las Vegas were no longer available.

The Ted fiasco is sort of like an inside joke with not much of a punch line. Nobody's laughing except United's competitors, who don't understand the concept any more than does the flying public.

It's unfortunate that it was all funded from the millions in employee pay and benefit givebacks. If there aren't the results at United that employees might expect after bankruptcy and painful concessions, the thought process that created Ted is one of the core reasons why.
 
With Delta finally admitting that its fake LCC (SONG) was a mistake, I've been predicting TED's demise ever since. If you want to be an LCC, then you need to start one. Like Neeleman did. Like those Dallas Drunks did with WN. And painting some A320s and ripping out First Class but staffing it with the same employees as your expensive mainline ain't how you go about starting a real LCC.
 
  • Thread Starter
  • Thread starter
  • #29
IMO, that would be the worst possible decision. More seats will mean yet lower fares, and UA's mainline yield already trails AA's mainline yiled by over a penny per mile. UA (as well as AA and other legacies) needs to decide to whom it will try to cater; right now, UA is trying to be all things to all people, and it ain't working.

And that's my point. Here we are, leaving what I think is probably A LOT of money on the table by removing all these seats on our airplanes, and we're not even getting the yield premium we should be enjoying by having E+, and for that matter, a first class cabin on our domestic narrowbodies. And I'm not saying necessarily remove all of E+ or necessarily first class. What I'm saying is that with 80% average load factors (or even high 70's load factors), I suspect we could have put more butts on our airplanes had the seats been there. Yeah, yields would go down (maybe, read further!) but our costs would go down as well (more ASM's flown, bigger number in the CASM denominator which reduces average CASM, allowing us to maybe make money on that lower yield).

So let's say we just cut E+ capacity in half in domestic narrowbody aircraft. It will still be there for those customers who REALLY pay for it, and for everyone else, you get the cattle seating. As far as first class goes on the domestic narrowbodies, reduce it (by half) or eliminate it entirely. By keeping some of that premium seating available, we won't totally take a bath on yields, or perhaps our average domestic CASM will decrease proportionately MORE than yields would decrease. We're not going to lose ALL of our premium customers if we still have the "premium" capacity but just reduce it.

Ted was a huge mistake.
I don't agree with that, unless something has changed recently. Every time I'm in any type of group where management comes and talks to us lowly pilots, I'm hearing the opposite. In fact, during our bankruptcy I was told by the TED/UEX management guys that it was the only segment of our company that was doing half way decent!


We're gonna make comfortable coach seating and expand F cabins in an attempt to attract higher-yielding customers. Let our dinosaur competitors remove F seats and F cabins and squeeze in a few more rows, driving down yields even further." IMO, any legacy willing to market itself like that might just beat the LCC-wannabe legacies.

I'm thinking the opposite. And the reason why I'm thinking that is because we already have that at UAL (for the most part) and if it's working, it's not working that well right now. We have all the E+ seats and first class seats anyone could want to purchase, yet our yields don't reflect that. We have the schedule. We have safety. If the logic was correct that everyone wants comfortable seating, we'd be making lots of money and we'd be happily adding E+ to meet that premium demand.

I'm looking at the success of airlines like Ryanair in Europe and wondering if that model won't become very successful over here. I suspect it will some day. I'm thinking that we're going to hit a point in the domestic narrowbody market where it will be too expensive to cater to supposed "high yield" customers who perhaps aren't contributing as much to the bottom line as the cost of keeping them subtracts. I'm very interested in seeing how readily the consumer accepts Skybus in the up and coming months as an indicator of what we might see in the future in the U.S.


Looks like more F seats = profits, right? B)

I don't know. Perhaps having a fortress hub in DFW = more profits and higher average yields? I'm not sure I'd attribute that to those extra first class seats. There is little doubt in my mind that if we had a TRUE fortress hub like Continental has in EWR or AMR has in DFW that our yields would be higher (IMO DEN doesn't count, it's a connecting hub more than anything else). Imagine what our yields would look like if we "owned" ORD like AMR and Continental own DFW and EWR. Our average yields would definitely be higher, and I wouldn't attribute that to E+ or our first class seating. In fact, I'll take the fortress hub over either of those if I could choose which UAL got to have!

Enjoying the discussion.....
 
Ualdriver, do you want to know the reason why United's RASM is as low as it is? It's not because of seats on aircraft; it's because United dumps a lot of inventory on priceline and other discounters. This has been pointed out by competitors many times in the last few years.
While I have a $1000 last minute RT ticket on govt fare from IAD to ABQ, I'm sitting next to some yahoo who paid $105 for the exact same routing on priceline/orbitz/travelocity/etc.
United dumps a much larger amount of their inventory this way than the competitors. This is what's killing yields, not E+/C/F. Get the morons at WHQ to practice a bit of discipline in ticket inventory control and you'll see yields rise dramatically.
But the bottom line is that you operate aircraft; you are not an airline manager who makes these decisions. Nor am I - I am merely a customer. So all of this is really an exercise in mental masturbation because no matter what's posted here, United's management isn't going to fix the problem. This is a yield management problem, and United is continually screwing it up.
OK, I now feel the urge to to accomplish something meaningful - like locking myself in the bathroom and visualizing Jenny McCarthy. I just hope that my wife isn't cutting up vegetables for dinner with a sharp knife ... :unsure:

Now, if you want to check out what I'm talking about, here's what I suggest you do. Track the loads on a few flights on skynet. Watch what happens to the loads in the last couple of days. You're going to be surprised at how much inventory gets 'dumped' the last couple of days.
What would be even better is if you could locate the booking codes for all of the seats on a flight. If you see a lot of S, T, K, L, or G fares, that's where your revenue problems exist. Even V and W class fares are likely money losers.
 
Back
Top