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Is UA Really Phasing Out Global First? {Yes}

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Is UA Really Phasing Out Global First? {Yes}

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Old Jul 30, 2012, 12:16 pm
  #1  
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Is UA Really Phasing Out Global First? {Yes}

Forgive if this has been addressed before, but...

So what's the story -- I've seen sources which "kind of, maybe, sort of" indicate that UA is phasing out Global First. I've also seen some contradictory info.

Obviously UA will keep the Global First product on the newly remodeled aircraft through a reasonable life-span, and will keep two-class service on a number of existing and perhaps new routes. But has anybody heard anything definitive on whether there are plans to phase-out Global First completely?

I look forward to some FT wisdom -- many thanks! ^
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Old Jul 30, 2012, 12:22 pm
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Is this "rumor" based on the decision that UA chops 3-class F for p.s. transcon while AA keeps theirs ?

I think UA's F cabins area already right-sized : 12 on 744s, 8 on 772s, 6 on 763s. It would really suck if UA becomes another DL.

Not to mention that many of UA's hubs are located in cities where F demand exists - SFO, LAX, ORD, NYC (whether IAD/IAH warrants F is another debate).
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Old Jul 30, 2012, 12:22 pm
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Originally Posted by northpole999
... But has anybody heard anything definitive on whether there are plans to phase-out Global First completely?...
All indications are GF will be kept for the nearterm on certain major routes but 2 class BF will be used on routes UA does not beleive can maintain GF. Longer term (say >3-5 years out) will probably depend on the experience over the next couple fo years.
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Old Jul 30, 2012, 12:31 pm
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Originally Posted by northpole999
Forgive if this has been addressed before, but...

So what's the story -- I've seen sources which "kind of, maybe, sort of" indicate that UA is phasing out Global First. I've also seen some contradictory info.

Obviously UA will keep the Global First product on the newly remodeled aircraft through a reasonable life-span, and will keep two-class service on a number of existing and perhaps new routes. But has anybody heard anything definitive on whether there are plans to phase-out Global First completely?

I look forward to some FT wisdom -- many thanks! ^
The general trend for US carriers is to replace 3-class aircraft with 2-class aircraft. There was an article in WSJ a couple weeks ago that talked about this. Since CO was primarily 2-class and since UA is now CO, I'd expect to see more 2-class and less 3-class in the future but, as you point out, the refurbished 3-class equipment that exists today is likely to remain in service through its useful life.
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Old Jul 30, 2012, 12:32 pm
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IMO it's dead going forward (not including current a/c in the fleet) until they deliver a new, non-PMUA 777 (aka, finishing up the final retrofits) a/c with GF installed

Though of course the PMCO leadership was dead wrong about E+ (looking at $misek's initial statements), so won't be too surprising if the numbers smack them in the face and they decide to keep GF
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Old Jul 30, 2012, 12:39 pm
  #6  
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Originally Posted by mitchmu
.... the refurbished 3-class equipment that exists today is likely to remain in service through its useful life.
I would think so too. OTOH, US abandoned true F in their A330s and gave the F-seats to elite C-flyers with C onboard service/catering. However, US' F inventory was much smaller than UAs to begin with.
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Old Jul 30, 2012, 12:40 pm
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The problem is it's utterly uncompetitive in terms of ground product, soft product and to a certain but substantially lesser extent hard product. They have two choices: fix it or cut it. I'm pretty sure they're just going to cut it.

Example: SFO-HKG
CA: SFO-PEK-(KA)-HKG in First is $8620
SQ: SFO-ICN-(CX)-HKG in First is $9995 (SQ on the 77W)
SQ: SFO-ICN-(KE)-HKG in First is $10771 (with KE first on the A380)
UA: SFO-HKG in First is $11257
CX: SFO-HKG in First is $11672

In all seriousness if you don't pick CX or SQ at those prices you're doing it wrong. I believe that China has the new First product on that route, so even there it's a toss-up especially for 30% less.

The problem is they give it away for free, or to J/C/D/Z/P fliers. So what incentive do they have to make it awesome if they're not going to get cash for it? All the above products that are awesome don't just give away the farm, they make you pay for it.
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Old Jul 30, 2012, 12:45 pm
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Originally Posted by arcticbull
The problem is it's utterly uncompetitive in terms of ground product, soft product and to a certain but substantially lesser extent hard product. They have two choices: fix it or cut it. I'm pretty sure they're just going to cut it.

Example: SFO-HKG
CA: SFO-PEK-(KA)-HKG in First is $8620
SQ: SFO-ICN-(CX)-HKG in First is $9995 (SQ on the 77W)
SQ: SFO-ICN-(KE)-HKG in First is $10771 (with KE first on the A380)
UA: SFO-HKG in First is $11257
CX: SFO-HKG in First is $11672

In all seriousness if you don't pick CX or SQ at those prices you're doing it wrong. I believe that China has the new First product on that route, so even there it's a toss-up especially for 30% less.
The biggest problem with F, generally, is that people just don't pay for it according to WSJ.

I don't think anyone can predict exactly how the mix will change and when those changes will occur, but I do think it's reasonable to expect that, over time, F will be replaced with C, and percentage of seats with F will therefore decline. The only question is to what extent and at what speed and on what routes those changes will occur. I think it's reasonable to expect that CO will do a profitability analysis on all routes with F, and as they shrink F, they'll keep F on the routes that are most profitable, then transition to CO-style BF/E on the least profitable routes for F.
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Old Jul 30, 2012, 12:45 pm
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Part of the key to answering this question too is whether or not UA is investing in an upgrade of the currently outdated F hard product. If not, I'd say its days are numbered.

I haven't heard of anything in the works, but they could be keeping it quite confidential.
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Old Jul 30, 2012, 1:04 pm
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Originally Posted by JC1120
Part of the key to answering this question too is whether or not UA is investing in an upgrade of the currently outdated F hard product. If not, I'd say its days are numbered.

I haven't heard of anything in the works, but they could be keeping it quite confidential.
If they are, I'd guess it will be limited in scope.
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Old Jul 30, 2012, 2:13 pm
  #11  
 
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No new planes from here on in will have GlobalFirst.

So, by definition, it is here for as long as we have the current 74, 76 and 777s. So that's a good few years yet.

However as they are retired so GF will be phased out as no new aircraft that UA takes delivery of will have it.

This is, of course, the current state of play. Any future change in leadership could change this.
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Old Jul 30, 2012, 2:26 pm
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Not worth it...

I received my first double upgrade from coach a few months back on a return flight SYD-SFO, an old retrofitted 744. I upgrade to C all the time on that route, and this was my first experience in F in over 10 years, so I was curious about the differences.

Needless to say I was underwhelmed, to put it mildly. While I appreciated the slight improvement in privacy, I did not find it much better than a window seat upstairs in C in the 744. I thought the bed was actually somewhat less comfortable than C, more cot-like. The food was bland and nothing impressive like the caviar and DP in the old days. And the service was the same as C; grumpy FA's with seniority who resent serving upgraders who won't pay full-fare. (I've actually concluded these last few years that if you want upbeat FA's who care about serving the Pax you gotta' sit in coach where the new FA's are starting out. They are the best!)

All in all, I found it very marginal and certainly not worth the premium they are charging for it.
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Old Jul 30, 2012, 2:51 pm
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Originally Posted by arcticbull
In all seriousness if you don't pick CX or SQ at those prices you're doing it wrong. I believe that China has the new First product on that route, so even there it's a toss-up especially for 30% less.
To me, this is the issue. The product is not priced to sell, especially for what it is. Of course few people are paying for it. You can't compete with airlines offering a far superior product for the same or less money, which is typically the case on TPAC routes, and sometimes even on TATL routes when compared to BA, say. That's setting out to NOT sell the product in the first place, and of course the consequence of that will be that it will be discontinued.
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Old Jul 30, 2012, 2:57 pm
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An additional killer: They are now starting to mix pmUA and pmCO equipment on routes with multiple daily services. The result is that some daily departures do and some don't have F seats, and some termini do and some don't have IFLs. If the product was inconsistent before I fear this brings it beyond the ridiculous.
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Old Jul 30, 2012, 4:25 pm
  #15  
 
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Hope they don't get rid of GF. It's the main reason I fly UA and not DL.
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