An interesting Chicago Tribune article details how United will focus more on domestic travel in 2017.
With yields down on international routes thanks to low-cost competition, United will look inward. Strategies includes:
- Strengthening its existing hubs
- Continuing the trend of more mainline and less regional jet service
- Banking flights to make hub connections easier
- Basic Fares, that are essentially a hidden fare increase since these fares will cost the same as the cheapest fares now but entitle passengers to fewer perks and services
- Seriously explore a premium economy product
- More dynamically set fares with new technology
- Improve operational reliability
United realizes that while status quo leads to profits in an era of cheap oil, it is leaving too much money on the table. While focusing so much on international travel, it has fallen behind the competition in terms of domestic strength. Still, most of these strategies are merely talking points that would fit for any airline, any year.
Details and Analysis
In reference to creating departure banks to ease connectivity, Scott Kirby, President of United said:
This isn’t about carrying more passengers in nonstop markets, it’s about competing for the sum of a whole bunch of small markets.
Great. But remember Scott, this has been talked about for over two years now. Are we actually going to see it happen? I hope that Kirby’s reiteration of this policy change comes in light of now presiding over two airlines with a hub-and-spoke system out of Chicago O’Hare.
> Read More: Let’s Give Scott Kirby a Chance
Julia Haywood is on record stating that United will seriously consider a premium economy product. With three-cabin first class being pulled out during Polaris retrofits and both American and Delta already implementing a premium economy product, I see that as not just a serious consideration, but inevitable.
And yet, maybe not? The LOPAs (Layout of Passenger Accommodations) for the fleet have already been submitted. United will make its 777 economy class 10-across. Will it really modify plans now to add a product that has underperformed for Singapore Airlines and Lufthansa?
What kind of technology will United use to set fares? Kirby added–
Systems that can better assess how much passengers are willing to pay for tickets could lead to higher fares on peak travel day flights that often sell out, but could also mean lower fares on flights with empty seats.
United Cuts International Routes
Not present in the article is news that United is trimming its international route map. Changes include:
- Seasonal service between Newark an Oslo will not return in 2017
- Seasonal service between Washington and Manchester will not return in 2017
- Year-around service between Newark and Hamburg (recently upguaged from a 757 to 767) will become seasonal
I expect more cutbacks to come as Norwegian has been given authority to operate out of Dublin and will continue to pummel the legacies with cheap fares that erode yield to the point of making flying unprofitable even with cheap fuel.
Indeed, it will be an interesting year.
(Tip of the hat to EXLEFTSEAT on Flyertalk)