GF on NYC<>TYO Please!
#61
Original Poster
Join Date: Sep 2009
Programs: UA GS>1K>Nothing; DL DM 2MM; AS 75K>Nothing>MVP
Posts: 9,372
To be clear, since you're likely itching to bring this up: no, we can't see how they are doing in the international premium segment in terms of revenue, since RM at that level is one of those deep dark secrets that airlines hide from competitors.
But we can be pretty confident that DL does OK. If they were raking it in on domestic and tanking on international because of lack of longhaul F, I'm pretty sure they wouldn't be buying into VS (precisely zero longhaul F seats) or bothering with the new focus city in SEA. I suspect they'd... be refitting longhaul planes with F. It's not like they couldn't do it, right?
But we can be pretty confident that DL does OK. If they were raking it in on domestic and tanking on international because of lack of longhaul F, I'm pretty sure they wouldn't be buying into VS (precisely zero longhaul F seats) or bothering with the new focus city in SEA. I suspect they'd... be refitting longhaul planes with F. It's not like they couldn't do it, right?
But you've already established that C/J is being sold heavily discounted anyway, right?
"Here, buy our mediocre C product (which we can't make TOO good because otherwise it's too close in quality to our F product, and we discount a lot because it's mediocre) and we will upgrade you to our really mediocre F product!"
Is that really the market pitch? Compelling, I'm sure.
Is that really the market pitch? Compelling, I'm sure.
In the end, you should either get what you pay for, or be happy that you get more and realize that someone has to pay for it, and gravy trains and free riding comes at a cost (some of which is airlines wising up).
#62
Join Date: Feb 2008
Programs: 6 year GS, now 2MM Jeff-ugee, *wood LTPlt, SkyPeso PLT
Posts: 6,526
Please clarify "bailing"... When AA gets all of its 77Ws they will only have 20 birds with an F cabin in their international fleet compared to 87 for UA. I wouldn't call dumping JFK as bailing on a macro level.
I think this is part of the reason why UA did not do squat to really bring their F soft product up to par as 87 birds is way too many. I will wager that the majority of the flights are flying at a loss in the F cabin. Now if UA were to trim down from 87 birds with F cabin to around 30, maybe 40, and focus those birds on niche routes that can support the F cabin then investing and bringing the F cabin soft product up to international standards will make a lot more sense.
Off the top of my head, only BA, LH, and EK have more birds with an F cabin than UA. Heck even QR is not putting F on their planes anymore, none of their 777s have an F cabin.
I think this is part of the reason why UA did not do squat to really bring their F soft product up to par as 87 birds is way too many. I will wager that the majority of the flights are flying at a loss in the F cabin. Now if UA were to trim down from 87 birds with F cabin to around 30, maybe 40, and focus those birds on niche routes that can support the F cabin then investing and bringing the F cabin soft product up to international standards will make a lot more sense.
Off the top of my head, only BA, LH, and EK have more birds with an F cabin than UA. Heck even QR is not putting F on their planes anymore, none of their 777s have an F cabin.
So in essence this says that they are (in a few years) going to F suites on high value markets, and on transcons JFK-SFO/LAX. While having a better C product than UA does on the rest.
Seems to me they are much better situated for premium/high value traffic than is UA, with a few F suites, assigned more by crew base, no special F soft product, and no F transcon product.
I guess I see that as not "bailing" like UA is....
#63
FlyerTalk Evangelist
Join Date: Jun 2002
Location: ORD, HKG
Programs: UA*G, AA Emerald, HHonors Diamond, Hyatt globalist
Posts: 10,356
You know that PMUA had JFK-NRT for a very long time and failed right ? In a matter of fact it was a route inherited from PA !
PA 800/801 = UA 800/801
We're talking about UA - not sure what you're referring to.
UA doesn't appear to have had any real interest in intl. F for the last 5-6 years. This is nothing new and it has nothing to do with any merger, other than to say that the merger doesn't seem to have changed their mind. In fact, the existence of intl. F is probably a hindrance to them on routes where they compete against DL for example, as they can sell less J seats.
UA doesn't appear to have had any real interest in intl. F for the last 5-6 years. This is nothing new and it has nothing to do with any merger, other than to say that the merger doesn't seem to have changed their mind. In fact, the existence of intl. F is probably a hindrance to them on routes where they compete against DL for example, as they can sell less J seats.
PMUA had JFK-NRT years ago using 744, and the route folded long before LAX-HKG !
So how do you explain ORD-HKG and SFO-HKG still fly 3 class then ? There are certainly plenty of paid F pax for both routes and not filled by NRSA.
Last edited by ORDnHKG; May 30, 2013 at 11:36 am
#64
FlyerTalk Evangelist
Join Date: Aug 2007
Location: SEA, but up and down the coast a lot
Programs: Oceanic Airlines Gold Elite
Posts: 20,640
Besides, all the REAL VIPs wouldn't dream of stooping so low as to fly commercial if they can avoid it.
I might note that DL also performs as they do despite having SWUs that are widely derided on FT as a joke compared to the analogous AA/UA upgrade instruments (the fare class required is essentially full Y or very close to it). In other words, if they are discounting longhaul business class, it's only through their corporate contracts; they might as well hand out stacks of their SWUs in the SkyClubs as $200-300 discount coupons for all they are worth.
And yet... they seem perfectly fine with that model, and apparently able to do just fine on expanding their longhaul reach. So I would say the evidence seems to support the idea that you can run a large USA-based airline just fine without longhaul F.
- reducing the opportunities you have to upgrade into the cabin (doing that LH does and excluding a good amount of cut-rate fares from upgrades)
- rationalizing the pricing (even at a discount a reasonable premium on C)
- reducing the routes where we offer F (to those where we can reasonably fill the space with paid customers actually willing to pay F fares)
This is realistically the only way we can see driving enough revenue to make F a truly competitive product."
Let's imagine this involves, say, premium services at some hubs like EWR/SFO/ORD/LAX, an eventual F cabin refresh (and reduction in size to, say, 6F in 777s/A350s, like CX), a new P class fare like LH's, with some reasonable A fares available. F is largely dropped from second-tier routes and IAH; the ones that keep it are ones like LHR, NRT, maybe FRA, GIG, and so on.
Would you be in favor of this?
I am not an American Airline expert, but they currently have 2 773ERs with 8 F suites, and 47 772ERs with 16F suites, I know that they are going to direct Isle access on the 772s and no F suites, but they are also putting F suites on the new A321s.
So in essence this says that they are (in a few years) going to F suites on high value markets, and on transcons JFK-SFO/LAX. While having a better C product than UA does on the rest.
Seems to me they are much better situated for premium/high value traffic than is UA, with a few F suites, assigned more by crew base, no special F soft product, and no F transcon product.
I guess I see that as not "bailing" like UA is....
So in essence this says that they are (in a few years) going to F suites on high value markets, and on transcons JFK-SFO/LAX. While having a better C product than UA does on the rest.
Seems to me they are much better situated for premium/high value traffic than is UA, with a few F suites, assigned more by crew base, no special F soft product, and no F transcon product.
I guess I see that as not "bailing" like UA is....
#65
Original Poster
Join Date: Sep 2009
Programs: UA GS>1K>Nothing; DL DM 2MM; AS 75K>Nothing>MVP
Posts: 9,372
A market clearing price is fine, but let me pose a question: suppose UA came to you through a customer survey and said: "We'd like to improve the soft product in our longhaul F cabin and invest in making our product competitive, but this will entail:
- reducing the opportunities you have to upgrade into the cabin (doing that LH does and excluding a good amount of cut-rate fares from upgrades)
- rationalizing the pricing (even at a discount a reasonable premium on C)
- reducing the routes where we offer F (to those where we can reasonably fill the space with paid customers actually willing to pay F fares)
This is realistically the only way we can see driving enough revenue to make F a truly competitive product."
Let's imagine this involves, say, premium services at some hubs like EWR/SFO/ORD/LAX, an eventual F cabin refresh (and reduction in size to, say, 6F in 777s/A350s, like CX), a new P class fare like LH's, with some reasonable A fares available. F is largely dropped from second-tier routes and IAH; the ones that keep it are ones like LHR, NRT, maybe FRA, GIG, and so on.
Would you be in favor of this?
- reducing the opportunities you have to upgrade into the cabin (doing that LH does and excluding a good amount of cut-rate fares from upgrades)
- rationalizing the pricing (even at a discount a reasonable premium on C)
- reducing the routes where we offer F (to those where we can reasonably fill the space with paid customers actually willing to pay F fares)
This is realistically the only way we can see driving enough revenue to make F a truly competitive product."
Let's imagine this involves, say, premium services at some hubs like EWR/SFO/ORD/LAX, an eventual F cabin refresh (and reduction in size to, say, 6F in 777s/A350s, like CX), a new P class fare like LH's, with some reasonable A fares available. F is largely dropped from second-tier routes and IAH; the ones that keep it are ones like LHR, NRT, maybe FRA, GIG, and so on.
Would you be in favor of this?
#66
FlyerTalk Evangelist
Join Date: Aug 2007
Location: SEA, but up and down the coast a lot
Programs: Oceanic Airlines Gold Elite
Posts: 20,640
This is very much the case in a world where LH can fly F cabins TATL and NH can fly them TPAC, and UA gets some of that revenue through ATI. In essence, those are F cabins that UA is flying across oceans, capable of handling the demand USA-based passengers have for F. As such, I think UA stripping longhaul F to AA-ish sorts of levels (at a minimum, if not taking it out altogether) has some logic to it, given that unlike BA/LH/SQ/TG/EK, where you can concentrate your F passengers to a central hub to wine/dine them in lounges, it's hard to do that when you're dealing with EWR/ORD/IAH/SFO/LAX.
#67
Original Poster
Join Date: Sep 2009
Programs: UA GS>1K>Nothing; DL DM 2MM; AS 75K>Nothing>MVP
Posts: 9,372
If they think a longhaul F cabin at discounted C pricing (or upgrading into C for cheap) is the sine qua non of longhaul travel, probably not. I'm not so sure that is important, given DL's success over the last 5 years. That's a long time in this industry to be a fluke.
If a potentially improved service doesn't incent people to spend more money for the service, why should they do it, even if the additional cost is "very little"?
Nicer cabins and services for NRSA's and people who buy US miles for cheap?
This is very much the case in a world where LH can fly F cabins TATL and NH can fly them TPAC, and UA gets some of that revenue through ATI.
As such, I think UA stripping longhaul F to AA-ish sorts of levels (at a minimum, if not taking it out altogether) has some logic to it,...
Got to believe that UA is thinking the same thing. I just think they are dead wrong on this. There is a non-insignificant number of people who fly UA because they get UGed into F or can use miles for award tickets on UA/*A....and an occasional pax who buys full fare F
....given that unlike BA/LH/SQ/TG/EK, where you can concentrate your F passengers to a central hub to wine/dine them in lounges, it's hard to do that when you're dealing with EWR/ORD/IAH/SFO/LAX.
BKK/SIN/FRA are very nice, but same deal on the lounges as with the inflight service. It's not a question of cost, it's a question execution. It's not that expensive to provide a good lounge experience. UA has pretty decent IFLs in some cities (SFO/NRT). Wine and spirits are pretty good in the US. Good showers. If they spent an extra $3 a head on food and properly trained the staff, they'd have not great but at least pretty good IFLs.
#68
Join Date: Aug 2008
Location: SF Bay Area
Programs: UA 1K, Hyatt Globalist, Virtuoso Travel Agent, Commercial Pilot
Posts: 2,133
With the joint ventures with ANA and Lufthansa, United gets the same revenue regardless of marketing or operating carrier. For the routes covered by the ATI, both revenue and costs are shared based on a predefined formula.
#69
Join Date: Mar 2008
Location: USA
Programs: AA EXP, Hyatt Globalist, Marriott Titanium
Posts: 537
Having the right aircraft is key. With the 747s, the nose of the aircraft makes it a great spot for first and less so for business. With the 777s, adding a small cabin takes up a lot of space without adding a lot. Also there is a large galley at the front which wouldn't be well utilized if it was just serving the first two rows.
Right now, the 747s are based in SFO, but what is stopping UA from moving them plus the maintenance operation to EWR? A global first lounge would be needed, but many routes could support a 747 size plane plus first class from their competitors.
Add back the helicopter service to EWR for GF passengers and it is a compelling argument.
Right now, the 747s are based in SFO, but what is stopping UA from moving them plus the maintenance operation to EWR? A global first lounge would be needed, but many routes could support a 747 size plane plus first class from their competitors.
Add back the helicopter service to EWR for GF passengers and it is a compelling argument.
#70
FlyerTalk Evangelist
Join Date: Aug 2007
Location: SEA, but up and down the coast a lot
Programs: Oceanic Airlines Gold Elite
Posts: 20,640
Again no idea if international has anything to do with DL's success. Again it comes back to the question...... Why would anyone other than a hub/route captive fly DL when a) no upgrades to F, b) can't use SWU on reasonable fares for UGs on personal or family trips, c) very difficult to use miles for award tickets? Obviously some people do, but to my way of thinking it makes no sense. I personally have a very hard time understanding why an international VFIF would fly DL if they have a choice.
I might point out that DL, lack of F or no, is actually going to start producing dividends for stockholders, which segues nicely into...
If you can't point to where a service adds revenue to the bottom line, why offer it? Your duty to stockholders is return on their invested capital, not catering to customers who naturally would like more service without paying for it.
It appears that BA, LH, AA, CX, QF have all realized this in one form or another, which is why all of them have removed (or are planning to remove) F seats from their fleets. I think it's inevitable that UA will as well. Whether or not they retain a leavening of it on select routes ala AA or remove it altogether as DL does remains to be seen.
#71
Formerly known as CollegeFlyer
Join Date: Jan 2004
Location: JRA
Programs: UA 1K MM, AA PLT, Hyatt Diamond, Marriott Gold, Hertz 5*
Posts: 6,716
I know that UA had JFK-NRT and closed it, but I don't know if it is because it failed. I thought it was just that UA decided to de-emphasize JFK and route everything through ORD/IAD to be more efficient. For example, I heard that JFK-LHR was profitable, but it was closed at the same time as JFK-NRT. Presumably, if JFK-NRT was a failing route, UA would not have kept it "for a very long time" after getting it from PA?
#72
Original Poster
Join Date: Sep 2009
Programs: UA GS>1K>Nothing; DL DM 2MM; AS 75K>Nothing>MVP
Posts: 9,372
I know that UA had JFK-NRT and closed it, but I don't know if it is because it failed. I thought it was just that UA decided to de-emphasize JFK and route everything through ORD/IAD to be more efficient. For example, I heard that JFK-LHR was profitable, but it was closed at the same time as JFK-NRT. Presumably, if JFK-NRT was a failing route, UA would not have kept it "for a very long time" after getting it from PA?
Nobody needs J either, it's just nicer to ride in J than in Y and nicer in F than in J.
and travel enough that taking a "busman's holiday" isn't all that appealing, even if it's someplace like DPS or MLE.
I might point out that DL, lack of F or no, is actually going to start producing dividends for stockholders, which segues nicely into..
You can point it out, but can't point out whether its because of international or in spite of international. You just don't know.
If you can't point to where a service adds revenue to the bottom line, why offer it? Your duty to stockholders is return on their invested capital, not catering to customers who naturally would like more service without paying for it.
If, however, you could derive more revenue by consistently selling the space on those airplanes as C seats at lower prices (by taking F out), than selling the occasional "million dollar glass of lemonade" to your occasional full-fare F pax, you're hurting your bottom line. Not a good tradeoff for your business.
It appears that BA, LH, AA, CX, QF have all realized this in one form or another, which is why all of them have removed (or are planning to remove) F seats from their fleets. I think it's inevitable that UA will as well. Whether or not they retain a leavening of it on select routes ala AA or remove it altogether as DL does remains to be seen.
2. My point is not whether demand for international F is growing or not. It's that there is demand and that the carriers can make money off of it.
3. And more specifically that there is F demand/opportunity on NYC<>NRT.
In the end it also depends a lot on the competition. Everything else being equal (routes, hubs, service, IRROPS, on-time performance, etc.), the rationale flyer will pick the carrier where they get upgraded to F all or part of the time. Unless you assume there is no extra capacity in J (i.e. 96%+ occupied with paid J fares on average on all flights all year round) then the carrier with F will have higher revenue and a better bottom line even if they don't sell a single a F fare. It's just simple math.
Last edited by iluv2fly; May 31, 2013 at 10:23 am Reason: merge
#73
Join Date: Jan 2009
Location: IAH/EWR-LGA/MIA
Programs: UA Global Services 3.2 MM, Marriott Bonvoy Lifetime Titanium Elite, AA Exec Plat, BA Gold
Posts: 2,669
#74
Ambassador: Alaska Airlines
Join Date: Nov 2008
Location: BWI
Posts: 7,393
Bottom line...
+UA won't put a bird with F on EWR-NRT if they do not think they can consistently sell 2-4 full fare F or A seats a day. As the F cabin will come at the expense of the much smaller C cabin. Yes, you can go on and on that it is technically "48" seats as they can upgrade those in J and sell the vacated J seats. It is still 8 F seats and 40 J seats for a loss of 10 J seats that they sell on a regular basis. EWR-NRT sells very well in J, and I bet those customers will be pissed if they learn that 25% of the seats on their flight is a middle seat. The loss in routine/repetitive J revenue from that can easily outweigh the marginal gains of F sales. Remember the most profitable J customers are usually the ones that buy at the last minute. Do you think they will be pleased when they board the plane only to learn that they are in 9G or 7D.
+Demand for F worldwide is undoubtedly dropping. LH is ripping F off of some birds, AF/CX/NH/TK/many others has gone C/Y+/Y on the majority of their new birds and the birds with F are slowly being phased out. AA is reducing F considerably as well.
Yes, I do think EWR-NRT is a better fit for a 3 class bird than IAD-PEK, LAX-PVG, and a bunch of other routes, but remember there is more to it than just the F sales potential.
+UA won't put a bird with F on EWR-NRT if they do not think they can consistently sell 2-4 full fare F or A seats a day. As the F cabin will come at the expense of the much smaller C cabin. Yes, you can go on and on that it is technically "48" seats as they can upgrade those in J and sell the vacated J seats. It is still 8 F seats and 40 J seats for a loss of 10 J seats that they sell on a regular basis. EWR-NRT sells very well in J, and I bet those customers will be pissed if they learn that 25% of the seats on their flight is a middle seat. The loss in routine/repetitive J revenue from that can easily outweigh the marginal gains of F sales. Remember the most profitable J customers are usually the ones that buy at the last minute. Do you think they will be pleased when they board the plane only to learn that they are in 9G or 7D.
+Demand for F worldwide is undoubtedly dropping. LH is ripping F off of some birds, AF/CX/NH/TK/many others has gone C/Y+/Y on the majority of their new birds and the birds with F are slowly being phased out. AA is reducing F considerably as well.
Yes, I do think EWR-NRT is a better fit for a 3 class bird than IAD-PEK, LAX-PVG, and a bunch of other routes, but remember there is more to it than just the F sales potential.
Last edited by golfingboy; May 31, 2013 at 1:40 pm
#75
FlyerTalk Evangelist
Join Date: Aug 2007
Location: SEA, but up and down the coast a lot
Programs: Oceanic Airlines Gold Elite
Posts: 20,640
CX? Replacing 747s with 9F with 77Ws with 6F. Also flying 77Ws with no F to North America markets like YYZ.
LH? Took their 747s from 16 F to 8F. Also flies airplanes with no F cabins to North American markets.
BA? Removed F from some cabins. Also flies airplanes with no F cabins to North American markets.
AA? Going from 16F to 8F and pulling it out of much of the fleet- they'll have about 5-7 routes where there is F service, unless they significantly add to their order book.
QF? Removing F from their A380 orders.
Who cares if EK is flying A380s with 8F on SIN-DXB if you're a USA-based airline? Not relevant to UA until such time as they start flying SIN-DXB. And OK, sure, someday super-premium traffic to Africa/India/ME might be important. I might note that AA was flying 772s on ORD-DEL (with 16 F seats). Didn't seem to work out well for them- they shut down the route some time ago.
Bottom line...
+UA won't put a bird with F on EWR-NRT if they do not think they can consistently sell 2-4 full fare F or A seats a day. As the F cabin will come at the expense of the much smaller C cabin. Yes, you can go on and on that it is technically "48" seats as they can upgrade those in J and sell the vacated J seats. It is still 8 F seats and 40 J seats for a loss of 10 J seats that they sell on a regular basis. EWR-NRT sells very well in J, and I bet those customers will be pissed if they learn that 25% of the seats on their flight is a middle seat. The loss in routine/repetitive J revenue from that can easily outweigh the marginal gains of F sales. Remember the most profitable J customers are usually the ones that buy at the last minute, do you think they will be pleased when they board the plane only to learn that they are 9G or 7D.
+UA won't put a bird with F on EWR-NRT if they do not think they can consistently sell 2-4 full fare F or A seats a day. As the F cabin will come at the expense of the much smaller C cabin. Yes, you can go on and on that it is technically "48" seats as they can upgrade those in J and sell the vacated J seats. It is still 8 F seats and 40 J seats for a loss of 10 J seats that they sell on a regular basis. EWR-NRT sells very well in J, and I bet those customers will be pissed if they learn that 25% of the seats on their flight is a middle seat. The loss in routine/repetitive J revenue from that can easily outweigh the marginal gains of F sales. Remember the most profitable J customers are usually the ones that buy at the last minute, do you think they will be pleased when they board the plane only to learn that they are 9G or 7D.
Last edited by eponymous_coward; May 31, 2013 at 1:23 pm