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Delta Air Lines has been pretty vocal about it offering differentiated premium cabin offerings where cheaper tickets will potentially not include things like priority boarding, free seat selection, free checked bags, lounge access, and more. This week on its Q2 earnings call, United hinted that it might also be headed in this direction where not all Business Class fares are created equally.
Dawn Gilbertson from The Wall Street Journal asked United execs during the call about the possibility of a “bare bones” Polaris® (United’s international Business Class):
I’m wondering, you guys talked a lot recently about making Polaris even more premium. Are you weighing, like your new favorite brand loyal competitor, are you also weighing bare bones business class tickets? And if so, can you walk us through that and talk about any timeline? If not, why not?”
Andrew Nocella, United’s Chief Customer Officer, fielded the question:
Look, what I would say is over time, over the last seven or eight years, we’ve leaned heavily into segmentation of our revenues, which is really an 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.”
This says to me that it’s a pretty safe bet that we will see Basic Business at some point. What that means is anyone’s guess and as United looks to add extreme luxe perks like a caviar amuse bouche and larger suites, it will also take away perks from those buying the cheapest seats in the Polaris® cabin. What amenities might be removed and then sold as an upcharge to a higher fare:
- Lounge access (Polaris® and Delta One® Lounges are not cheap to operate and often face overcrowding)
- Priority boarding, security, and check-in line access
- Free checked bags
- Free seat assignments (airlines like Air France and British Airways already do this)
- Mileage earnings and credit towards elite status
- Free ticket changes
We’ll see how draconian United (and Delta) want to get with this and how the market reacts. United is the most restrictive on its Basic Economy allowances, but will passengers tolerate that when booking up front? Will those redeeming miles for a seat or using an upgrade instrument also be forbidden from entering a lounge or choosing a seat for free? Time will tell and I’m sure American Airlines is also exploring this idea.
Anthony’s Take: This is simply a way to increase ticket prices on top of already expensive premium fares. Passengers will see the incremental value in some cases to pay more while others will just want the seat. It will be interesting to watch this be introduced and then evolve.
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Advertiser & Editorial Disclosure: The Bulkhead Seat earns an affiliate commission for anyone approved through the links above This compensation may impact how and where links appear on this site. We work to provide the best publicly available offers to our readers. We frequently update them, but this site does not include all available offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed, or approved by any of these entities.
1 comment
Well said and unfortunately almost certainly quite accurate. Offer less and charge more seems to be the way our airlines operate these days rather than enticing people with quality and value. That indicates that the USA airline industry is over consolidated.