Should UA provide a premium travel option for leisure travelers: lounges, lieflats, …
#46
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I'm glad that you brought up the private suite at LAX because I'm genuinely curious...what type of people are utilizing this? I mean I truly do not understand their target demographic. Is there a large subset of affluent travelers who are not quite wealthy enough to utilize a service such at Netjets but still have the disposable income to pay $3000 each time they want to use a private terminal? I can understand being wealthy and wanting privacy but don't most of those type of people have a Netjets-style membership or charter a private plane?
Just curious.
Just curious.
You'd probably need more .. volume than the HON lounges (especially since LH F itself is .... being removed from a lot of the fleet), so you'd probably want a mix of like full J (as in J J fares, or the lower allowed DZP for GS) and buyups for everyone else. Most people, travelling on OPM wouldn't bother, but plenty would want to escape the zoos of EWR/LAX ticketing lobbies, etc.
#47
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A leisure, infrequent traveler forking out $500+ for a lounge with minimum service due to local requirements?
Running wide-bodies on leisure routines requires passenger volume and passengers willing to pay a premium for shorthaul flights. There is a market for 13-14 hour flights but for 2-3 hour flights? Especially routes where you are taking the kiddies?
Yes good be an interesting experiment to determining if a premium leisure traveler exists, while that might exists for a small portion of seniors. But my guess it would fail. No history exists to suggest this would work
Running wide-bodies on leisure routines requires passenger volume and passengers willing to pay a premium for shorthaul flights. There is a market for 13-14 hour flights but for 2-3 hour flights? Especially routes where you are taking the kiddies?
Yes good be an interesting experiment to determining if a premium leisure traveler exists, while that might exists for a small portion of seniors. But my guess it would fail. No history exists to suggest this would work
#48
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You'd probably need more .. volume than the HON lounges (especially since LH F itself is .... being removed from a lot of the fleet), so you'd probably want a mix of like full J (as in J J fares, or the lower allowed DZP for GS) and buyups for everyone else. Most people, travelling on OPM wouldn't bother, but plenty would want to escape the zoos of EWR/LAX ticketing lobbies, etc.
Opportunity cost is the key. When you're talking about F on a plane (or lieflat J on a leisure route), it's a question about how much floor space is taken up and therefore what incremental yield you need to achieve just to break even. When you're talking about a lounge or private checkin area or whatever, you're talking about paying the airport rent for space that could otherwise go to retail -- and, in case you haven't noticed, airports have found retail to be so profitable that it's crowding out seating areas.
#49
Join Date: Jun 2014
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Ii don't know, light jets are >4000/hr, and ones that will get you transcon are way more, so that cost is quite high. I would think the firm's security clients get it included with their retainer, some corporate/studio clients have a bulk agreement, and the UA "intro" rate is closer to the real rate than the published one. The UA intro rate might make sense as a novelty for some people.
You'd probably need more .. volume than the HON lounges (especially since LH F itself is .... being removed from a lot of the fleet), so you'd probably want a mix of like full J (as in J J fares, or the lower allowed DZP for GS) and buyups for everyone else. Most people, travelling on OPM wouldn't bother, but plenty would want to escape the zoos of EWR/LAX ticketing lobbies, etc.
You'd probably need more .. volume than the HON lounges (especially since LH F itself is .... being removed from a lot of the fleet), so you'd probably want a mix of like full J (as in J J fares, or the lower allowed DZP for GS) and buyups for everyone else. Most people, travelling on OPM wouldn't bother, but plenty would want to escape the zoos of EWR/LAX ticketing lobbies, etc.
#50
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And you've just disproven your own point. F is disappearing because it's not profitable. It's probably true that "plenty" would want to escape the EWR/LAX ticketing lobby. It's definitely not true that "plenty" would be willing to pay enough to make it worthwhile for UA. And if you're talking about "full J plus GS," you're really just talking about GS and OPM. I doubt that there are many leisure travelers paying full J -- as, indeed, I doubt there are many leisure GS. (There are undoubtedly some, but I suspect it's a single-digit percentage).
Opportunity cost is the key. When you're talking about F on a plane (or lieflat J on a leisure route), it's a question about how much floor space is taken up and therefore what incremental yield you need to achieve just to break even. When you're talking about a lounge or private checkin area or whatever, you're talking about paying the airport rent for space that could otherwise go to retail -- and, in case you haven't noticed, airports have found retail to be so profitable that it's crowding out seating areas.
Opportunity cost is the key. When you're talking about F on a plane (or lieflat J on a leisure route), it's a question about how much floor space is taken up and therefore what incremental yield you need to achieve just to break even. When you're talking about a lounge or private checkin area or whatever, you're talking about paying the airport rent for space that could otherwise go to retail -- and, in case you haven't noticed, airports have found retail to be so profitable that it's crowding out seating areas.
It also seems likely, based on your analysis, that even the Polaris lounges will end up on the chopping block. A true premium experience cannot be sustained without OPM flyers, and my belief is that COVID has permanently shrunk those ranks to a level that will not allow a profitable venture in that niche.
#51
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I agree that domestic F and international J seats will likely experience large cuts in capacity post-plague. I mean, it's really a matter of survival for the US big 3. They are just barely hanging on and are going to have to change their business models if they hope to survive. In my crystal ball, I see a future where PlusPoint upgrades to international J will be much more difficult to get due to capacity reductions and attempts to better monetize the premium cabins.
It also seems likely, based on your analysis, that even the Polaris lounges will end up on the chopping block. A true premium experience cannot be sustained without OPM flyers, and my belief is that COVID has permanently shrunk those ranks to a level that will not allow a profitable venture in that niche.
It also seems likely, based on your analysis, that even the Polaris lounges will end up on the chopping block. A true premium experience cannot be sustained without OPM flyers, and my belief is that COVID has permanently shrunk those ranks to a level that will not allow a profitable venture in that niche.
#52
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I agree that domestic F and international J seats will likely experience large cuts in capacity post-plague. I mean, it's really a matter of survival for the US big 3. They are just barely hanging on and are going to have to change their business models if they hope to survive. In my crystal ball, I see a future where PlusPoint upgrades to international J will be much more difficult to get due to capacity reductions and attempts to better monetize the premium cabins.
It also seems likely, based on your analysis, that even the Polaris lounges will end up on the chopping block. A true premium experience cannot be sustained without OPM flyers, and my belief is that COVID has permanently shrunk those ranks to a level that will not allow a profitable venture in that niche.
It also seems likely, based on your analysis, that even the Polaris lounges will end up on the chopping block. A true premium experience cannot be sustained without OPM flyers, and my belief is that COVID has permanently shrunk those ranks to a level that will not allow a profitable venture in that niche.
Having said that, I could see the Polaris Lounge concept close permanently, and the dumbed-down service in Polaris inflight remain long term with domestic F style meals and limited amenities.
#53
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If you're right about the loss of business travel -- and I don't share your skepticism, personally -- then, yes, the Polaris lounges will almost certainly be closed. And I don't know that they can monetize the J cabin much more than they're already doing, but capacity cuts are certainly possible. The high-J 763 configuration doesn't make much sense unless you can sell it to business travelers.
As far as monetizing more J seats, something along the lines of a Dutch Auction for upgrade could probably sell some excess capacity effectively. I know that I would bid on the sure thing rather than gambling with PlusPoints. You are right about most, "your own dime", J-cabin flyers; I would never pay full J fare. If I can't get a P or Z fare, then I am not a buyer and, if I had to be on a certain flight, would then buy a W+ fare in the hopes of using PlusPoints. So a bidding system for cash upgrade would be very interesting to me.
#54
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A few points, many of them personal preferences:
1. I agree that Domestic F demand is a lot lower than it was, and retrofitting all domestic NB aircraft with new FlatBed seats is not worth it.
2. As a leisure traveler, while I always Fly Domestic F, I have never, and will never pay the Full Fare price, and very seldom pay anything higher than a "Z" fare.
3. Speaking for myself, in the minority who always buys Domestic F, if I learned that another carrier was offering FlatBeds on all domestic flights and UA wasn't, I think my loyalty would shift.
4. UA (and most airlines) have a huge supply of LieFlat seats that are in idle aircraft. While not a good short term investment, it's worth considering if these seats could attract the minority of pax who are willing to pay for DomF fares.
5. Since FlatBed seats do take up more real estate, it would help to reduce inventory and keep prices from crashing while using existing airframes.
6. Now that the vaccine is being rolled out, we really need to wait to see what the new normal will be. No one knows for sure what will happen to Biz travel, except that 1. it will be different in 12 months, and 2. What we see in 12 months will be a much better indicator of what to expect long term than now.
1. I agree that Domestic F demand is a lot lower than it was, and retrofitting all domestic NB aircraft with new FlatBed seats is not worth it.
2. As a leisure traveler, while I always Fly Domestic F, I have never, and will never pay the Full Fare price, and very seldom pay anything higher than a "Z" fare.
3. Speaking for myself, in the minority who always buys Domestic F, if I learned that another carrier was offering FlatBeds on all domestic flights and UA wasn't, I think my loyalty would shift.
4. UA (and most airlines) have a huge supply of LieFlat seats that are in idle aircraft. While not a good short term investment, it's worth considering if these seats could attract the minority of pax who are willing to pay for DomF fares.
5. Since FlatBed seats do take up more real estate, it would help to reduce inventory and keep prices from crashing while using existing airframes.
6. Now that the vaccine is being rolled out, we really need to wait to see what the new normal will be. No one knows for sure what will happen to Biz travel, except that 1. it will be different in 12 months, and 2. What we see in 12 months will be a much better indicator of what to expect long term than now.
#55
Join Date: Jun 2014
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If it made sense for UA and others to fly a limited WB schedule between two points vs a heavier NB schedule, wouldn't they have been doing it all along? I don't see how COVID-19 changes that equation other than, perhaps, making it even more desirable to fly a NB schedule. Ultimately, the frequent flyer wants frequency first and everything comes after that.
#56
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If it made sense for UA and others to fly a limited WB schedule between two points vs a heavier NB schedule, wouldn't they have been doing it all along? I don't see how COVID-19 changes that equation other than, perhaps, making it even more desirable to fly a NB schedule. Ultimately, the frequent flyer wants frequency first and everything comes after that.
In the current era of spoke-hub-hub-spoke that UA now speaks, I end up going with what works if I want to stay on UA and fly to non-hub cities/regions. Otherwise, I can potentially pay a premium for taking a non-stop on another airline if one goes to where I want to fly.
As a leisure traveler with family, my spouse has a direct say in what flight(s) are picked - some of this is driven by schedule ("not too early"), comfort ("what are they serving?" or "are they serving?") and other services (UCs, baggage fees waived as a UA elite, etc.). And I'll pick accordingly based on what we agree to as well as how much we're willing to spend for those items mentioned.
So if the business frequent fliers are not flying, UA needs to understand more fully those who are flying and why they are willing to part with their money for the features that benefits them.
If UA doesn't care to figure this out for domestic U.S. fliers, then they get to be condemned to being hemmed in by DL/AA/B6/AK on one end and NK/F9/etc. on the other.
David
#57
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This means flying more expensive to operate aircraft, leading to greater negative cash flow unless you are willing to pay significantly more for those seats. Note most UA's lieflat fleet have more seats upfront than domestic F aircraft, so inventory to be sold would increase, not reduce (exception the 752s with 16 seats up front are already in full use)
#58
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For what it is worth, the current domestic F product is bad. Flying in Paid F on my own dime a couple days ago IAD-SFO, they did not cater enough food and the crew offered snack boxes versus the meal: a gas station sandwich. No recognition of my elite status, and minimal service in-flight.
Can't justify paying extra for premium UA service when they have difficulty delivering even a basic product.
Can't justify paying extra for premium UA service when they have difficulty delivering even a basic product.
#59
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For what it is worth, the current domestic F product is bad. Flying in Paid F on my own dime a couple days ago IAD-SFO, they did not cater enough food and the crew offered snack boxes versus the meal: a gas station sandwich. No recognition of my elite status, and minimal service in-flight.
Can't justify paying extra for premium UA service when they have difficulty delivering even a basic product.
Can't justify paying extra for premium UA service when they have difficulty delivering even a basic product.
#60
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And you've just disproven your own point. F is disappearing because it's not profitable. It's probably true that "plenty" would want to escape the EWR/LAX ticketing lobby. It's definitely not true that "plenty" would be willing to pay enough to make it worthwhile for UA. And if you're talking about "full J plus GS," you're really just talking about GS and OPM. I doubt that there are many leisure travelers paying full J -- as, indeed, I doubt there are many leisure GS. (There are undoubtedly some, but I suspect it's a single-digit percentage).
Opportunity cost is the key. When you're talking about F on a plane (or lieflat J on a leisure route), it's a question about how much floor space is taken up and therefore what incremental yield you need to achieve just to break even. When you're talking about a lounge or private checkin area or whatever, you're talking about paying the airport rent for space that could otherwise go to retail -- and, in case you haven't noticed, airports have found retail to be so profitable that it's crowding out seating areas.
Opportunity cost is the key. When you're talking about F on a plane (or lieflat J on a leisure route), it's a question about how much floor space is taken up and therefore what incremental yield you need to achieve just to break even. When you're talking about a lounge or private checkin area or whatever, you're talking about paying the airport rent for space that could otherwise go to retail -- and, in case you haven't noticed, airports have found retail to be so profitable that it's crowding out seating areas.
International true F is toast because its expensive to "produce" - between all the exotic F&B, and especially huge amount of floor space dedicated to it, there simply isn't demand for it when J has lie-flat seats. - and there will still be plenty of J demand from UA's hubs post pandemic.
The point for the premium lounge is that there will be some, not lots of demand for it and that it should by design be exclusive enough to never have UA club crowding issues, but accessible enough that its economical to offer