United Airlines Trades Economy Section for Premium Seats in New Profits Strategy

The airline industry has been struggling to find consistent profits over the past several years.  Whether the growing line of budget airlines are helping to saturate the market or a weak economy has simply found fewer people traveling, airlines continue to look for more ways to entice passengers back into the seats.  As such, United Airlines has announced, this week, its plan to remedy this problem by focusing on higher-fare passengers.  

Indeed, United Airlines will attempt to win the attention of a certain passenger demographic by retrofitting at least 100 planes in the fleet with more premium seats for key routes.  In addition, the airline has said they will introduce a new 50-seat jet fitted with mostly premium seating for a few special routes.  

Specifically, United plans to retrofit 21 of its existing Boeing 767-300ER jets within the next few weeks. This will reduce the number of seats on these plans from 214 to 167 by shrinking the economy section and adding more than 50 percent more business class (from 30 to 46) seats and another 22 “premium plus” seats. 

The first route to introduce the new seats is Newark to London.  

The airline also plans to add a handful of seats to the first class to both its Airbus A319 and A320 planes.  And then by the end of the year, the plan is to also add the new 50-seat Bombardier CRJ 550 jets for shorter routes originating in Chicago, particularly for business travelers.  

While some might see this is another type of cash grab that elbows out economy customers (which is not just an issue in the airline industry) it should be noted that higher-paying passengers tend to account for a higher share of fares on most airlines, particularly the bigger brands like United. And, surely, United is not alone in making this move to accommodate such passengers. But they may be the first to be so bold. 

Some industry analysts argue that United’s strategy takes direct aim at Delta, which is one of the nation’s top three airlines, particularly for premium travelers. Delta is known not only for its on-time performance but also—and, perhaps, more importantly—for strong profit margins.  A move like this from competitor United certainly instigates a challenge for the top spot.

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