I'm starting to wonder if UAL should start thinking about adding seats back to their domestic narrowbody airplanes at the expense of significantly reducing the number of first class or economy plus seats. I'm starting to wonder if the cost of providing premium seating to its domestic narrowbody customer is adding costs to the airline that domestic fares simply barely sustain, or won't sustain in the future.
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.
Ted was a huge mistake. You can't just paint some airplanes and remove F from some A320s and magically begin printing money the way Southwest does. On top of that, Ted's E+ is some of the least generous among UA's airplanes - with 156 seats, that's the same as B6 before B6 removed another row and instituted E+ throughout their cabin.
With 80% average load factors the new norm, I'm wondering if we're leaving too much money on the table by taking seats out of airplanes that probably would have had butts in them had we left them in. I think that when average load factors were much lower, it probably made sense to add economy plus as the average seat removed probably had nobody sitting in it, but now I suspect that is no longer the case. Or maybe we should remove first class entirely from our domestic narrowbodies and just use a reduced number of economy plus seats as our "premium" domestic seat for the typical short haul type flight. I'd love to see how much it is really costing us (an opportunity cost if you will) by not having these extra coach seats on our airplanes, and how much of a "premium" we're really getting for guys/gals flying first class/economy plus in our typical domestic, narrowbody market.
IMO, load factors are high right now because of the huge domestic capacity surplus, which causes UA (and the other legacies) to bid down their coach fares to try to "make it up in volume." What we need is to see a couple legacies say "screw it. 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.
KCFlyer said:
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.
Sorta oversimplified, if you ask me.
More Room Throughout Coach (MRTC) was announced in early 2000. By early 2001, when the transition was largely complete, the dot.com bubble had burst and AA was on track to losing money in 2001, even before September 11 happened. So in the midst of 2002-03, when every legacy was bleeding cash, AA began to re-install seats in a desperate attempt to bring in cash. Note that AA's mainline yield was greater than UA's mainline yield in 2001 - 2006, so it's hard to draw conclusions about whether MRTC helped bring in more unit revenue or whether it cost AA money by leaving people behind on popular routes.
I'm not convinced that removal of MRTC did anything to contribute to AA's recent profits. As I've posted before, it has a huge unit revenue advantage over UA and a yield premium to most legacies.
AA also has the largest narrowbody mainline F cabins - with far more F seats than UA. UA has some 8 F 319s and 737s while no AA narrowbody has fewer than 16 F seats.
Looks like more F seats = profits, right? B)
My point: MRTC never had a chance to prove whether or not it worked in a healthy airline environment. Its installation wasn't complete until right before September 11 and it was removed shortly after that.
AA really ought to experiment with an E+ regime to see if it can help further. But don't look for short-man Arpey to do it. Carty was 6'3", so no wonder he was a fan of MRTC.
On the other hand, E+ didn't keep UA out of Ch 11 and it hasn't meant big profits now that it's emerged from bankruptcy. Hard to draw any conclusions about the effectiveness of large F cabins or E+ or MRTC.