US airline execs are finally realizing that the days of giving their products and services away for free are soon to be over. Presumably just a matter of time until this will also mean following the example of other parts of the world: eliminating free award tickets and cutting free upgrades to first class.

In the new fashionable concept of "a la carte" pricing, being offered mileage earning on a ticket can also easily be offered as a "pay for" option based on the fare class purchased.

"The rising oil prices have negated much of the reorganizing work performed by airlines in and out of bankruptcy protection. That includes the $6 billion that American saved as a result of its mid-decade reorganizing."

�Fuel prices erased all of what we have accomplished,� Mr. Arpey said.
�If we are going to have an airline business, our customers must ultimately compensate us for the cost of flying them around the country and around the world,� Gerard J. Arpey, chief executive of American Airlines, said at the conference.

http://www.nytimes.com/2008/06/19/bu...tml?ref=travel

Over the last 8 years, premium flying has shifted dramatically away from commercial aviation towards private business flying.

"In 2000, commercial airlines flew 79 million so-called premium passengers (defined as those flying first-class, business-class and full-fare coach) on one-way domestic trips. Last year, despite a sharp increase in overall passenger traffic, that number was 42 million. Premium passengers, incidentally, account for about twice the revenue per passenger mile as non-premium passengers.

In the same period, the estimated number of passengers flying one-way trips on business aircraft climbed steadily, to 17 million last year � or 41 percent of the total number of commercial airline premium passengers. In 2000, it was a mere 15 percent."

http://www.nytimes.com/2008/06/17/bu...tml?ref=travel

Will we soon see commercial First Class eliminated on all but a very few transcontinental flights where those few seats are seen to be truly competing with the business jet service, are priced and staffed accordingly and are all reserved and paid for in full by paying passengers? Or will all planes move to economy and economy+ only and First Class only exist in history books (and the cabins of private/corporate jets)?

If and when NW=DL eliminate not only FC upgrades but FC service and potentially charge for the both the ability to earn miles and spend them, what will keep you playing the FFP game?

I think your thread title is very misleading. At the very least I expected you to cite an unnamed source or "an overheard conversation" to support a rumor. In fact, this is nothing more than your own personal/private musings which seem intended to get a rise out of the board. Lost your touch in the other thread?

Does this even have anything to do with NW/DL? Wouldn't this be better off in MilesBuzz?

ETA: all much better now.

Which sounds like a good place to move this discussion... Thanks for the suggestion

If you figure the NYT lost it's 'first class' standing long ago, then no surprise that it follows...
Is Jason whats-his-name back on staff ?

I don't think that there is a universal answer. LH, AF, BA, LX, SQ, CX, EK .. still have a true long haul 1st class product and make money.

OS, SK, KL, AZ have abandoned 1st class. CO without F is better off than AA or UA ( for me the latter 2 are not qualifying as quality carriers )

Question is if the Netjet type business case is sound for medium haul continental travel and leaving a 1st class niche for long haul intecontinental. It will be interesting to see the result of the LH private jet program, which tends to combine the two.
So far most LH private bookings were point to point with only few connecting to LH long haul.
Main variable are the travel policies of the big corporations, how far down the ladder can you travel in F or C? I started mid 90ties with a Fortune 500 US and had 1st class privileges. Around 2000 they cut it back to Y for all employees for intracontinental travel ( yes also on the red eyes to the East coast ). My successor can only fly in C on flights over 10 hours, otherwise its Y for all employees, which is tracked by an elaborate internet based travel expense tracking system ( with a monthly deviation reporting ).

How can the airlines be surprised that the premium traffic is going to business jets? The airlines have eroded the quality of service in the premium cabins down to what coach used to be a few years ago. The people that want the service and don't so much care about the price are going to find an alternative.

And then there is the TSA hassle, which applies equally to all airline passengers, premium or coach. Compare the TSA hassle and advance boarding requirements to the zero hassle and zero delays at the FBO, and you can see why private aircraft makes a lot of sense.

I do believe the title of the thread. Just like in Europe, where intra-Europe business class is just a glorified coach section, I believe that the same will happen in the U.S. First class seats will be eliminated. Netjets and DayJet and other such operators will ultimately syphon off all the premium paying passengers.

Very unlikely that biz jet use will expand in days to come which is one theme of this thread. Much more likely, the polluting over-use of close-in airports by private jets will be cut way back.

IMHO, it is unlikely that we will have much of an air travel system if oil prices stay anywhere close to the present level. The airlines cannot survive at these prices--and, probably, neither can private jets, once folks understand their fuel inefficiency.

Driving a Hummer will soon (if it doesn't already) subject you to so much ridicule that you won't do it. Private jets are likely to go the same way.

I'm starting to expect the US carriers to go to the European model of flexible "first class" seating, being just coach seats with the middle seat not bookable. That way, they can adjust the F to Y capacity, so you shall no longer be able to get a F seat upgrade to Florida ever again, 'cause there will probably only be two rows of it.

The CRJ-900s and E175s are probably safe, because they don't have much more space to utilize from the first class seats anyways. Hello grounded 757s and Airbii?

that's too funny!

But with First Class eliminated, how will airlines continue to cultivate relationships with frequent flyers? Upgrades are an essential part of any elite frequent-flyer program.

There will be only Y to C upgrades. Most European corporations onyl allow Y Intra-Europe and are studying the low Y long haul fares with great interest. You will see it coming in the next downturn

you mean like 500 minimum flight miles and bonus miles?

I would not count on any of the current "essential" frequent flyer benefits still being around in the future. Maybe some will survive, but the game is changing rapidly.

While I agree that things are going to change the Legacy Carriers are taking thier lives in their hands if they screw around with the fundamentals. This is just my opinion of course but if they took away major aspects - say NW actually eliminating the FC benefit - then there would be no effective difference between them and the "Cattle car" (WN). In that case I'd stop fighting the various "cheap as possible" policies in my company and just take solace in the easy WN reward redemptions.

I don't disagree with the basic premise of this thread...that airlines may continue cutting benefits (like F upgrades) for frequent flyers in an aattempt to cut costs.

Problem is that if they go too far, it will backfire.

Frequent flyer benefits are the primary drivers of loyalty to a particular airline. Without them, the only thing pax will have to distinguish one carrier from another would be price. If we get to the point where price is the only thing driving a pax to a particular airline, it will have the natural effect of driving prices ever lower, lower, lower. That, of course, is an untenable position for the airlines. Therefore, they must retain something that they can use to distinguish themselves from other carriers, and thereby drive loyalty. Without that, the race to the bottom will only accelerate.

Not necessarily of the type offered by US airlines. Some of the most profitable airlines in the world (like SQ or QF) will only upgrade if you either pay for the fare difference in cash or with a fistful of points, regardless of your status. Relationships are cultivated with frequent flyers though the quality of the economy product, access to lounges on domestic travel once you reach a certain tier etc, rather than through giving away the fare differential which could be one of the things lying between profitability and Chapter 11.