IAH-OIL-TRASH

Article on flyer changes post-pandemic. I've definitely noticed a change in flyer composition, most starkly to me in the front cabins to/from Hawaii and in the LHR lounges. A lot more first-time F fare leisure travelers in former and far fewer business travelers in latter. Kirby says, ""We believe demand is just structurally different than it was pre-pandemic - we're still figuring out that new normal." I beleive it - fares don't seem to make sense at times (even more so than before) and I'm guessing there might be some rollercoasters as they figure it out.

US airlines thrown a curveball as consumer habits change post-pandemic (yahoo.com)

angetenar

This is something that's been commented on a bit during previous earnings calls as well. I believe that some other new normal things were increases in staffing (5 to 10% higher) to maintain the same number of flights, and also changes in booking behavior for a number of reasons including the removal of change fees.

IAH-OIL-TRASH

I was thinking more of a new normal in seeing far less business travel (mainly international) , replaced by more leisure travel, fewer last-minute business buyers and more advance booking (leisure) buyers. If that's what UA is seeing, they've got to re-think their revenue management ideas they had pre-pandemic. I see fare changes that seem to reflect a revisioning of how things work, but they are definitely pricing themselves at a disadvantage to other carriers in some markets relative to advance purchasers. That's where I see UA trying to figure things out. If there's a recession, that's another factor they have to predict/adjust for..

exerda

I have to think the leisure travelers paying for front cabin at current high fares won't last forever. Yes, there was pent up demand from the pandemic, along with pent up travel budgets, and in cases folks who moved to cheaper cost of living areas with the expansion of remote work and thus may have more discretionary income. But that pent up demand can't go on forever, and I don't see the random leisure traveler splurging on front cabin for a family of 4 indefinitely.

I do see business travel eventually coming back, but it's going to be in conjunction with less remote work (and I don't see the latter as happening as quickly as prognosticators and headlines would lead us to believe). Nor are international business patterns likely to return to pre-pandemic "norms."

UA threading the needle is going to be a challenge.

aCavalierInCoach

Not certain I agree with this. A lot of us feel like the main reason to pay for the front is to stay away from economy. 10-across on the 777s has changed the game for me; no where to hide from the misery. I do think prices up front will rationalize upward if there's a return of business travel, and UA will decide the Polaris real estate isn't getting paid for -- I see an expansion of Premium Plus as the next big fleet evolution.

findark

In my anecdotal observation of industry pricing, 2022 saw huge hikes at the bottom end of the fare table, as I believe airlines were trying to capture less-sensitive leisure demand and use it to replace high-dollar OPM business travel that was comparatively low that year. In recent months, I have seen fares crater in a lot of places (perhaps in connection with slackened demand) and loads have fallen a bit.

It seems like "squeeze money from the leisure crowd" was the name of the game in 2022, but I think 2023 is quite different and I'm not sure if anyone (including the execs) have it figured out yet. It definitely goes without saying that OPM used to spend a shocking amount of money on travel (just having seen ticket receipts at a midsize company was mind-blowing compared to what I would ever spend) and I think a lot of that traffic is still suppressed.

I can dream that there are more leisure travelers who understand that miserable flying is not like death and taxes and you can actually buy a nice experience at a reasonable price, but I am definitely skeptical that any change in that direction is really structural.

JimInOhio

I can understand that pent up demand might account for leisure travel at high prices but are leisure travelers going to want to over-pay (in their eyes) indefinitely? Sure, they might like and expect to ride up front but the price sensitivity in doing so will increase, IMHO.

uastarflyer

OTOH it�s not a long misery. Splurging at the destination is cheaper. However�.
�.This is my hope. Definitely willing to spend hundreds for better, not thousands for much better. Especially x3 or x4 passengers

TXJeepGuy

Yeah, key word is reasonable. I'm happy to pay a reasonable price to sit up front, but given the meal quality high 4 figure to 5 figure prices just don't make sense when I could spend that money to extend the trip at a nice hotel instead.

goodeats21

I have thought this for awhile. Back to the old 3 cabin.

• Small(ish) lie-flat section
• larger section of recliners
• Painful coach

Aussienarelle

United essentially has three classes (I do not consider economy plus and economy as different but if you do then four classes).

United used to have Global First which is now Ploaris. They went to the Continental model of combining business class and first class, BusinessFirst in CO speak - a product I loved. I was very sad when Continental left the Aussie market as it was United Business class for me.

United used to have business class as their second cabin and that is now PremiumPlus. Although the lounge chairs in Business class were much better than the current PremiumPlus product. But I will take PremiumPlus over Economy on a red eye flight any day of the week.

And of course Economy.

The points needed for an upgrade recognize there are three cabins - the front two just go by different names.

I must say United is pricier than competitors and although I will make 1K for 2024 I suspect that will be my last year. Always traveled on my own dime since late 2012. Have experienced OALs. I know the competition. Domestically it will usually mean Southwest for short hops and best pricing for international - potentially favoring Star Alliance as a lifetime Gold but not always.

I think United does have a tough job figuring out who they want to be and how to price that effectively for the returns to shareholders.

IAH-OIL-TRASH

I think UA has some work to do on coach pricing. I think they�re a bit high right now for Hawaii market and I think they�ll find themselves flying emptier than hoped for this summer. To/from Hawaii is definitely a market where advance tickets are consumed.

On the F side, fares are really up there to/from West Coast and I think they have an over-optimistic view that projects from last year. I�m looking at a 4:30p SFO- HNL flight May 29 and I�m comfortable buying coach and expecting a PP upgrade. UA has definitely overshot the market on that flight. I would have bought F if the price was competitive enough to attract other buyers and I was worried about getting an upgrades. I�m doing neither, and that should worry UA.

Kacee

There's certainly been a bunch of swings in pricing over the past couple years as carriers have tried to figure out demand. This is heavily route and dates-of-travel dependent, but right now I'm seeing fares mostly at the higher end of the range - about where they were prior to covid, and in some cases higher.

Getting UA specific, my sense is that UA is doing a better job with its pricing than AA, WN, or AS. They certainly seem more sophisticated, quicker, and better able to match price to demand to fill cabins. WN in particular has been all over the map. A month or two ago it was bargain city. Now I'm finding their pricing just ridiculous - like I'm really going to pay $289 for a WGA OAK-PHX when I can buy UA SFO-PHX for $159 and get an assigned E+ seat and a snack box when my upgrade doesn't clear? AA is also pretty clueless and will either fill a flight too early with cheap fares, or hold fares too high too long, and then have to do a fire sale a week or two prior to departure.

lotemblizej

Another factor in the mix for me is the significant change in aircraft type in recent years on many routes. After moving Polaris widebodies bigtime to domestic/Hawaii and European flying in 2021-22, UA is rightfully shifting them back towards Asia and Oceania as those markets reopen for mass travel. As a frequent traveler to Hawaii, I see that as the number of lie-flat seats to Hawaii shrinks significantly, F fares on those routes have risen astronomically. I am simply not willing to pay $2k one-way East Coast to Hawaii to be in a non lie-flat seat, and instead look at alternatives like DL or AS which have F fares closer to $1k one-way for the dates I am traveling. I don't fault UA for putting the widebodies on routes that maximize revenue and profit, but I believe there is a limit to what customers will accept. And I do appreciate that UA management is talking about this challenge openly.

Noanker1

I was surprised to see in another new thread the highest fare paid without OPM. 2-3 k was about the highest. That�s half or less than half of the shrinking close in business travel model. At those fares would make sense to enlarge the premium plus cabin and make it slightly more premium and shrink the Polaris cabin and not fill it with low fares ( relatively )and upgrades?