United Airlines Taking Seats Out Of Regional Jets, Preparing New Credit Card Offers

United Airlines expects the industry to reach a domestic load factor just under 75% next year, according to Chief Commercial Officer Andrew Nocella speaking at the Wolfe Research event Tuesday afternoon.

As leisure travel comes back more quickly than business travel, expect to see bigger aircraft and fewer 50 seat regional jets – without the “schedule depth” or frequencies we’ve come to expect. However the airline believes they’ll be the first to benefit when business travel does return, because their hubs are in the “biggest business centers.” (That also means, of course, that they suffer disproportionately until business travel does return.)

While they’ve made a big push to make progress against the slow roll out of their Polaris business class seats, they’re open to reassessing what seat layouts make sense for the new demand environment. While they’ve backed off of flying their Boeing 767s configured with 46 business class seats, that seemed a good bet to them at the time because British Airways flies as many as 80 business class seats on some aircraft out of London Heathrow.

In the meantime we can expect United to remove seats from regional jets to comply with their pilots contract as they move to furlough large numbers of employees effective October 1. The current United contract with its pilots limits regional jets by seating capacity (the premium-heavy CRJ-550 was a pilot scope clause workaround) and fewer mainline pilots requires reconfiguring the regional fleet. According to the airline they are currently “preparing the engineering work” to remove seats, “ready to execute and be done” by October 1.

While removing seats comes at a cost, don’t expect the airline to spend much on anything else. In a typical year they’ll spend between $1 billion and $1.5 billion in non-aircraft capital costs.

  • For 2021 they’re projecting $2 billion in total capital spending, most of which is for aircraft already in production, and just ‘several hundred million’ will be non-aircraft.

  • For 2022 they don’t expect to be required to take aircraft in 2022 [any planned deliveries would have been for 737 MAXs] and non-aircraft capital spending should be “below $500 million.”

That means you can expect not to see optional IT investment, or new or refurbished lounges.

Meanwhile, while credit card acquisitions are expected to be down “related to the economy” for “6-12 months,” they’re working on ways to activate the loyal customers (‘back book’) they’ve had for decades. They believe their cardmember base is largely “recession-proof” and so they are currently working with Chase on “how to engage people even more through programs, spend incentives, what you get bonuses on” and there is “a lot of creative work coming into the marketplace in the coming months.”

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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  1. @ Gary — They can engage my credit card activity by having Chase drop 5/24 on United products and by offering a 100,000 mile sign up bonus.

  2. I think it’s laughable that UA thinks they are in more large business centers than AA or DL.

    Top 10 Business Cities for Growth:
    SLC – DL
    Raleigh – DL/AA (although DL is pulling out per reports)
    DEN – UA/SW/Frontier
    DAL – AA / SW
    SFO – UA/AK&AA
    MIA – AA
    NASH – SW
    CLT – AA
    ATL – DL
    SEA – AK&AA/DL

    DL and AA are in many more cities with hub or partners than UA. If you look at overall Hubs, AA is in 8 of the top 15 metro areas; DL is in 5 and UA is in 4. Needless to say, AA and DL are in better business positions and AA is in a better leisure (PHX and MIA) position.

    Also AA’s oneworld partners (with one exception) are in better financial shape than Skyteam and both are better than Star Alliance.

    UA”s gamble on these 50 seat CRJ700 (550) and Polaris heady 767 is proving to be a failure in the current and future environment. UA’s balance sheet might be better than AA’s but the AA strategy will prevail IMO.

  3. @sunviking huh? United has hubs in the top 5 combined statistical areas (NYC, LA, Chicago, DC, and San Francisco/SiliconValley) in the US plus the #8 (Houston).

  4. Speaking as someone who was putting $25k/yr on a UA credit card through last year and has put $0 on it this year, I find it very funny that UA is trying to get people to put spend on their cards.

  5. @sunviking

    I’m not sure growth tells the whole picture. A city could be at a hypothetical $100/year of GDP, and expected to grow at 50% a year, but it would take years and years for it to catch an already vibrant business-metropolis with a hypothetical $1MM/year GDP. This is hyperbole of course. 🙂

    UA arguably does hold the ‘best’ business center cities.

  6. United has completely blown it with me. I spent $400k annually on my presidential plus card for 8 years to get platinum status. I’m not a business traveler, but have access to lots of business spend. I used to be able to make platinum solely through spend and the United award chart was competitive with other airlines. Fast forward to 2020 and united no longer waves the requirement for 4 paid segments to get elite status, the elimination of saver level domestic first class award seats, the fees for platinums to change their tickets and the increase to partner awards. My point is that it’s laughable for United to think their credit cards are recession proof. They have made the value proposition of their cards so bad that they shouldn’t be worried about the economies impact to their card business when they were able to screw it up on their own.

  7. @Fred … @sunviking huh? United has hubs in the top 5 combined statistical areas (NYC, LA, Chicago, DC, and San Francisco/SiliconValley).

    Those hubs are in Blue States (regions) that ran with the Wuhan Flu fear and panic to destabilize and destroy economies. And they are all sanctuary cities too.
    Tech, tourism and investments are fleeing.
    UA will be flying politicians from these hubs; since many are GSMs, they can fight over the limited biz seats.

  8. Re: UA/Chase credit card spend, since both wont refresh or incentivize my old 1K Signature Visa, my spend moved to a Cash Rewards card.

  9. Much to the dismay of people who must fit everything into a preconceived political narrative, after decades of predicting of an impending collapse of California, New York, Illinois and others, somehow it still hasn’t happened. When does one give up on a prediction?

  10. @Joey- Blue State Fiscal mismanagement and pension debts; I pray no Fed bailouts. Let the states eat themselves.

  11. @Chris@oak – i feel your pain buddy, but dont worry, as soon as Nov 3 is done the cities will magically get back to work and United will be just fine again LMFAO

  12. @ChrisOak

    You are correct in how Coronavirus is really a big city disease. Florida has more people than New York State, has an older population on average, and has 0 state income tax, yet New York State has 1473 deaths per million while Florida has 96 deaths per million. Outside of NYC, NJ, Connecticut, Detroit, and New Orleans, most counties and states have a very low per capita death rate from coronavirus. Florida with no state income tax has a balanced budget while New York with some of the highest taxes in the country is in dire straits. It really is two worlds we live in. It’s also why a lot of states are ready to be opened. NYC really poisoned the country with the influx of travelers from Iran and Europe into NYC that spread to the east coast. The virus that came directly from a China to the U.S. was pretty well contained in California and Washington.

  13. @Amy Madison-
    Thanks for your post.

    But this isn’t a big city virus. It was poorly managed by Autocrats in Blue states and counties. Placing infected elderly in nursing homes caused viral spread and deaths.
    Big cities with minimal cases: Seoul; Taipei; Hong Kong; Singapore. All have large older populations.

    Re: travelers from Iran and Europe causing NYC and East Coast spread, just remember the virus started in Wuhan.
    China blocked domestic travel from Wuhan, but allowed International travel for millions of their people; with the blessing of the W.H.O..

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