Jose Caiado
...
Premium economy; can you just give us a broad update there, that you expect to be a big contributor in 2019?

Andrew Nocella

So premium economy is a new class of service between the main cabin coach product and our business class Polaris product. Its most to kin to a domestic first class seat, but on an international wide-body jet and so we’ll sell it at a price point that’s higher than coach, but less than business class. It is not a business class seat. We don't think there will be a lot of passengers that would choose this particular seat over a flat-bed all aisle access seats. So we don't necessarily see any big buy down which is a big part of the calculation of grade in itself.

We are super excited to get it out there. Obviously there's been a lot of commentary by many about what it's worth and United doesn't have that today. So that is upside for the future. So we are excited about that. And a few of our key partners, Lufthansa, and A&A have this product. So it’s not like we have very good visibility into its potential as well, not only from commentary by the industry, but commentary from our partners.

So where we stand on that is we are retrofitting our aircraft and we have a lot of aircraft to retrofit, so you just can’t do that overnight. We started the process. All new aircraft come, delivered with the seats on board.

So our first 787-10 arrived a few weeks ago. It has this cabin onboard and it really is a great looking airplane; our customers are going to love it, and so we are going through a process that will take us through the end of 2020 to get premium plus on board most of our wide body jets. There is a small number for retirement reasons that we chose not to retrofit the aircraft. But by the end of 2020 we’ll be you know fully up to speed, which means the full value of this product will be in 2021 and the years ‘19 and ‘20 are kind of the phase-in.

Because we want to make sure when we sell this product it actually shows up in the aircraft, our passengers are getting on. We have to be really cautious not to sell it on every flight, even though we may have it on more aircrafts than you think we – we should be able to offer more flights. So they'll be a lot of cases where it's kind of a surprise. Somebody gets on board and they wind up with this better seat they didn't pay for.

So 2019, its value I think is measurable but not material. In 2020 when a lot of the fleet is done, it will be more impactful, but its 2021 the whole fleet will be done and we’ll be consistent, but the majority of it will be done. It will be consistent and consistency I think is what matters most in terms of being able to monetize the product. So that’s a 2021 good guide.

Jose Caiado

The comment about not selling as many of those seats, is that you know the situation that you are in today where you already have some aircraft in the fleet, but you are not necessarily selling that fare or is that also a kind of a 2019 and 2020 comment?

Andrew Nocella

It will be 2019 and 2020 comment. So for a fleet, the 777-300 is a good example. We’ll have all 18 of our aircrafts converted by this spring, so all 777-300 aircrafts will be selling that particular product. But our 777-200 fleet will be as much larger, it will be phasing over time and so you know we’ll probably only be able to sell one out of every two seats for 2019 on the 777 to make sure that the aircraft with the right configuration shows up at the gate I think.