United Airlines debuted its plan for a new business class suite that will fly on only a handful of planes, and for its most elevated premium experience that includes caviar and 27-inch entertainment screens. They’re offering a better business class wine program than any other U.S. airline.
Credit: United Airlines
But at the same time that they’re working to make business class better, they also love Delta’s idea to strip down the product. In response to a question from the Wall Street Journal‘s Dawn Gilbertson during United’s second quarter earnings call this week, Chief Commerical Officer Andrew Nocella said they’re going to segment premium like they’ve done coach and that this is what customers want.
Look, what I would say is over time, over the last 7 or 8 years, we’ve leaned heavily into segmentation of our revenues, which is really in our articulate way of saying, providing more and more choices to our customers so they can pick the experience they would like from premium to basic economy.
And we have learned through that time period that our customers really appreciate this. Not everybody wants the full experience. Some people want other experiences.
And so the value to United as an airline and to that of our customers has been proven by the segmentation of revenues that we’ve done. And we look forward to continuing to diversify our revenue base and segment it in the appropriate way, and I’ll leave it at that.
Last summer Delta confirmed plans to ‘unbundle’ business class and offer a ‘basic business’ product. Drawing on what other airlines around the world have done, that could mean:
- Pay to check bags
- Pay for seat assignments
- Lounge access not included
- No business class check-in, priority boarding, or premium security
- No changes or cancellations
- No miles or elite status credit
United Polaris Lounge, San Francisco
They re-confirmed this at their investor day in November, suggesting that in coach they have ‘basic economy, regular economy and comfort+’ and that this same ‘good, better, best’ three-choice model could extend well to business class.
And, according to United, they’ve “leaned heavily into segmentation of our revenues…providing more and more choices to our customers so they can pick the experience they would like from premium to basic economy.” And they “look forward to diversify[ing their] revenue base” and segmenting business class, too.
Terrible style to serve some passengers the full benefits, then have half-ass service especially in a premium cabin.
Yet another degradation and added complexity to the travel experience. Glad I’m at the tail end of my 45 years as a road warrior.
How about some basic comfortable seats in “first class” like no more dorm style seats, cramped middle seats on old 777s or seats with hard cushions with limited lean back on 737Max to/from Hawaii? next, we just basic polite and courteous customer service?
Except for no miles or elite status credit (not great), my company will save a ton. Since I don’t check bags, and everything else is available based on status or specific credit cards, all they’ll be doing is eating into their own profit from people (or companies in my case) who currently pay for business class.
If you’re someone who frequently travels, with the exception of not getting miles, there really isn’t too much of a loss here. Existing status, credit cards, and business programs pretty well cover the rest. Heck, it may even mean more business seats if the price is right.
Obviously this is just another price increase. The base fares are going to stay the same and the fares with perks will be plus plus
The problem with the “good, better, best” approach is that the experience is actually “very crappy, moderately crappy, almost not crappy.”
And if you travel on business on short notice as I & many others, too, we’re not benefitting from low fares, even adjusted for inflation.
Oh, US airlines….. it’s a race to the bottom, isn’t it? It’s almost like they WANT to go out of business.
Segmentation is not bad. But the airline will simply charge the premium more and make the current business becoming the “basic business” by removing all the benefits you can get now. Which means downgrade everything.
Their business class sucks already. In December I will be using the last credit I have with them and finally calling it a day. I traveled over 10hrs from Washington to Lagos with them and they served the remnants from a flight that just arrived from Europe. The food was served in plastic. My seat reclined and would not go back up.There was no entertainment. The air hostesses were upset about it and refused to be part of it. They called the attention of a Manager who refused to show up to consult with them. Finally, one of the food staff ralied some more left over food from some of their flights that had also just landed their to add to the left overs. It was a terrible experience. A friend just told me that they have sued them over a near crash mid air from Lagos to the US. She said the plane dropped suddenly so much so that one of the air hostesses broke her legs. She said the pilot never once said a word to them about the incident even as everyone screamed and cried. He turned the plane around passed many countries where they could have landed and took them back to Lagos or so. If I could be refunded the money I paid for what will be my last flight with them in December I would be very glad. Their business class is the worst I have flown and I fly business often.
Travelling back and forth to Asia using both Asian Airlines and American, travelling by US Airlines it’s like budget from the hotels to the Airlines. In Asia they treat people like kings in economy much better than the first class in the US
Another United ripoff in the works.
The American carriers just keep getting worse and worse. I’ll bring my business elsewhere, thanks.
Tell that to your investors.
May be they will come up with business premium where your knees don’t touch the front seat in business basic and charge you even more. May be they can have business standing only where you stand in business class and charge extra if you stand in the front vs at the end. Discount if you stand near the toilet.
That’s what happens when airlines have no competition.
We seriously need high speed trains like europe that take us from NY to Chicago in 4 hours.
So if under the new scheme I get the segments that make up what I got when the same items were bundled together will I be paying the same amount or more – even allowing for inflation?
I expect I will be paying more!!
I flew three business classes only. Turkish, Polish Lot and United.
United is by far the worst.
Turkish 10/10
Lot 8.5/10
United 2/10
Absotlut horrible food.
Way understaffed, so long waiting time for the staward and unpleasant service.
Food presentation, plates, utensils
Worn printed menu.
Even blanket, pillows and amenity kit looked cheap.
While I haven’t flown since the 90s, American Airlines have always treated coach passengers like second class citizens. I flew to London during the 80s and 90s and if I was paying i flew Virgin Atlantic where they gave you an accessory bag , hot towel and no charge for the movies being shown as well as treating everyone with respect.
Hopefully won’t apply to award bookings but I guess we’ll see
I sort of like the idea but all I see this doing in reality is allowing companies to go for the cheapest option which effectively strips aways some of the fringe benefits we enjoy now. I wonder who these customers are that these CEOs get their input from?
They make it sound like they are serving the customer better when they are really grabbing for more fees.
Instead of making this kind of decisions, they should improve their service, the food and the overall experience. Instead of putting Saks fifth Avenue blankets on the business class cabin, they should focus of delivering a better service. We all have experienced a rude flight attendant… The drinks are cheap … What United should do is change the whole executive team, and hire innovate people… when I travel first or business I always wonder who made certain decisions… Are these executives open minded? Are they well traveled? Do they understand the customers needs? Even when I go the lounges, I have encountered rude people? Who handles the hiring process? I see no changes after they replaced the previous CEO… I’d wish I would talk to him face to face and tell him what they need to improve .. but this request will be almost imposible
Imagine spending $8k+ for a J seat to get minimal service. The US3 is in a race to the bottom. Flew KLM J back in April TATL, service was great in both directions.
Delta’s fares are ridiculous to what they offer, especially when I can book domestic UAL FC for Delta’s MC. When the next downturn in flying happens, we better not bail them out again. They don’t reward loyalty… especially when deadheading pilots get a FC seat over a paying customer (deadheading pilots are on duty, getting paid AND it’s part of their duty day, so no difference than them flying the plane…)
I think all they care about is stock holders. They don’t give damn about customers.
CEOs are like peons for big share holders. They are definitely not getting input from frequent flyers. I think they can save lot of money if they give out one pretzel instead of 5 pretzels.
Like to see the data to support this. Just another way for UA to reduce cost and offer less service. The spin doctors must be working OT at UA.
Does any airline care for the high yield customer any more? How about cutting down credit card partners and focus on one loyallty provider. I don’t thing UA is ready to give up the ancillary revenue. I think there is an opportunity here for some other creative airline marketing exec to come in and revolutionize the marketplace for high yield customers looking for good service and travel experience
Someone, please make it happen now.
All that nonsense word salad to say we’re going to give you less for the same price, maybe more than you’re paying today! The second these idiots use words like “enhancements” and “choice/diversity” you already know it ends up being worse for the customer that they care oh so much about.
Each and every time a company says they are doing somethung for the consumer’s benefit, choice, my leg gets wet with iss. Will the price of business class decrease since they have striped the product? No. Delta and United, you ain’t got no alibi.
That’s so weird – that’s what PE is all about – a little cheaper, a little less luxe, a little less perks.. But once you’ve decided on a cabin you want everything to be the same whether you’re sitting in row 1 or 10. The no-priority check-in/fast-track/lounge/boarding is just cheap and nasty and will cause confusion to infrequent fliers who bought “business” but didn’t realise they’re not flying “Business”. It’d be so much simpler to leapfrog the devlpt of PE instead, up pitch to say 42-44″, increase recline to 8″ or more, and keep the sanctity and brand capital of the premium cabin intact.
Soon first class $100k, biz $10k, basic biz $5k coach $1k
1 million miles for coach JFK-BOS
What I haven’t seen mentioned is the high-J configuration. I suspect United doesn’t see filling it with full fare customers. I can see needing more plus points to get the premium service. People taking vacations with their family based on purchases paid with OPM may not have enough plus points to get the “best”. They may not even off “best” to people who got upgrades, especially upgrades from an award coach ticket (which the GS crowd can currently do).
So, the high J configuration may require this segmentation to keep from having empty J seats. If they are selling upgrades to people unwilling to pay for the J ticket, or to discounted business, they aren’t going to give the full service.
I’m more worried about AI pricing, where the full fare ticket price may be different for different people booking and traveling the same day. Not that you are going to find me paying full fare. Will business travelers pay more than leisure travelers? What happens with negotiated fares?
No one wants this. What a totally daft idea.
Just sounds like price-gouging to me. A chance to say they are offering Business class for cheaper than they are.
@ Marcus — I think that is what Delta charges for awards already.
@Neil — You say you haven’t flown since the 90s?! Nothing wrong with not-flying, but, just saying, it’s ‘view from the wing,’ not view from the couch… for real though, hope you’re doing alright.
I dont’t want better food or wine or the perks they mention in article. I travel long haul flts to Asia and what I want more than anything is flat bed seats that have reasonable price. Anything over triple coach fare is too much. Thats why I travel coach
I don’t want more choices… more choices mean more sales tactics, more failed payments, more calls to customer services or an AI chatbot, more standing in line behind people who don’t understand their choices, more needing to speak to a manager, more ‘oh you bought plan B, you need plan A for this lounge’ or ‘this choice is only for airline C and this is a codeshare with airline Q’
Sell me a business class ticket, provide a BUSINESS class service. PLEASE incompetent 10 million dollar airline executives, TAKE AWAY THE GOD DAMN CHOICES. They’re just an illusion to fleece customers for every penny and if some want to play that game, let them, just sell the rest of us the same old ticket.
I am not buying the “this is just a way to raise fares” argument. If the airline could simply demand higher fares, they would already be charging them. The truth is that these fares will indeed segment the market, with some paying more and others paying less. Those who eat change/seat/lounge fees will subsidiize those who don’t. That said, I certainly hope that status trumps some of the fare restrictions. If you spend enough to be UA 1K or DL Diamond, you should at least be able to pick your paid business class seat and use the lounge without being nickel and dimed. Time will tell…
Everyone knows these decision makers, directors, are all about skimming their clients not make the flying experience a pleasant one. They are after big fat bonuses by cooking the books and minimising good service at the expense of the customers. How else would they be flying in their private jets
Isn’t it amazing how they try to make this a positive by saying people who don’t want the full experience will not have to pay for it. PLEASE show me someone who does NOT want First Class. The reason why people do not buy a First Class ticket has nothing to do with NOT wanting the experience, it is that they CAN’T AFFORD IT, or their company will not purchase it, or it is sold out.
They have already reduced what you get today vs what you used to get 15 years ago. I am absolutely positive that people said they do not want an extra service, wider seats, or longer legroom.
The idiots saying this must have told Southwest that people want to pay for luggage. The prices have not decreased on their ticket, they are just charging more. I could go on and on.
I used to be Premier Exec on UA when it was a class act. Now, they must be among the world’s worst. They are so second rate.
No airline ever developed a new strategy for making less money.
Logic:
They will make the current Business class more expensive. Then tier down from there
I know this isn’t United (but it’s Star Alliance). I flew ANA on a 777 from Chicago to Tokyo nonstop. Economy (116 seats) was 95% full. Premium economy (24 seats)? 80% full. Business class seating (64 seats) was less than 20% full. Sure, it doesn’t help the nonstop pricing on economy was $800-1000 one way, but if you are charging 5 times the cash price, that it leaves little surprise as to why nobody is buying it. I am aware points, buying connecting flights (hidden city) and company contracts lower that off-the-top rate but it is getting ridiculously expensive and consumers are smarter than the airlines think.
Of course, I wouldn’t be caught dead flying United (dead as in murdered, they’d beat the crap out of me for not putting on my seatbelt in time), but this is a sensible way to fill more seats.
I can confirm….this is NOT what customers want.
Why does it seem Domestic Airlines keep trying to find ways to squeeze more money from their Customers ? It’s not about their Customers satisfaction, it’s about the stock price and profits coming first. The almighty Dollar. This new brainstorm of theirs is ridiculously complicated.
United had done everything in their power to avoid settling on a new contract with their Flight Attendants who have been without a contract now for over four years and counting. They aren’t allowed to strike per Federal Law or they would have years ago. That’s how they feel about their employees in a nutshell. Gives you a warm, fuzzy feeling about United huh.
“It’s what customers want” no way! No one is asking for this complexity and another way to nickel and dime customers.
United and Delta are following Norse’s example, a low cost international Norwegian Airline who in this case offer 3 Premium Economy products.
Which by the way, is a former business class cabin. The quality for value and service beats all other carriers across the Atlantic! And awarded “Best in Class”