United Airlines Plans ‘Basic Business’ Downgrade—You’ll Soon Pay Coach-Style Fees For Business Class Perks

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.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. 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.

  2. 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.

  3. 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

  4. 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.

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