Graham Warwick/WASHINGTON DC
United Airlines is to remove one economy-class seat row from every aircraft in its domestic fleet to make room for a new "Economy Plus" product. The US carrier claims that the move is aimed at rewarding frequent and full-fare fliers with a new class offering increased-legroom - but the decision bears all the hallmarks of a bid to boost yields and raise load factors.
The Chicago-based airline saw operating profits drop 2.4% in the first six months of this year on increased revenues, compared with 1998, while in the second quarter United's load factor fell by 2.5 points to 70.1%.
Under an "aggressive effort", the carrier's Boeing 757s will be reconfigured by October, its Airbus A319s, A320s and two-class Boeing 767s and 777s by December, and its Boeing 737s and 727s by February and April next year. Seat pitch will be increased from 79cm (31in) to 92cm in A320s and 757s and 89cm in other types.
Creation of the Economy Plus will reduce United's systemwide capacity growth from a previously planned 4.5% to just 1.9% next year. The airline's domestic capacity, which was planned to grow by 2%, will now be "almost flat", says president Rono Dutta.
Reconfiguring 450 aircraft will cost United $30 million, says Dutta, with the loss of revenue from removing seats being "a bigger number". He says the move is not motivated by a need to limit capacity growth, but to reward the frequent or full-fare flier. "They used to get upgraded to first class, but now that is full," he says. "We have a lot of business travellers trapped in economy."
United can nevertheless look forward to increased revenues in the longer term should it succeed in filling the new class. The move will, by definition, increase the ratio of high to low fare seats and thus improve yield per seat. Depending on aircraft type, the number of seats in Economy Plus will range from 36 to 89, or 27-48% of economy class.
Source: Flight International
