United Airlines next year will expand Economy Plus to
Continental Airlines in an ongoing effort to standardize product offerings
following the carriers' merger last year, and Delta Air Lines by this summer
plans to introduce an international premium economy product. While premium
economy seats have become common among international carriers, United has been
the lone legacy carrier to offer it within the United States.
Located in the forward section of the economy cabin,
United's Economy Plus typically has four or five extra inches of seat pitch.
Sample one-way charges for the service range from an extra $9 on
Chicago-Madison flights to $109 on Los Angeles-Tokyo flights, according to
United's website.
Corporate clients "told us loud and clear they really
liked the extra-legroom products, especially the United Economy Plus and, at
Continental, the extra-legroom seats in the exit row and bulkhead," said
Continental veteran Dave Hilfman, now United senior vice president of worldwide
sales. "They said, 'You have to keep this product.' It was just too
popular to go in a different direction."
Even though the seats will take up more real estate than
standard economy, Hilfman said, "the economics worked out beautifully
versus any rows that might be displaced in the regular economy section.
"Not only is this a great customer move, but
financially we believed it would provide a positive economic return for
us," Hilfman continued. "Long-term, it made all the sense in the
world to keep the United product and to expand it to the Continental
fleet."
Installations will not begin until next year, and "it
will take a few years to get it expanded across the Continental fleet,"
Hilfman acknowledged. United is extending premium economy seating to all
mainline aircraft and some larger regional aircraft.
According to SeatGuru, which evaluates airlines' inflight
products, premium economy seats can fetch fares of up to 85 percent more than
regular economy fares when booked in advance, but the price gap generally declines
as the day of departure approaches, averaging a 35 percent premium over
standard economy fares for close-in bookings. Still, premium economy fares
generally are 65 percent less than business class--though the latter can offer
50 percent more legroom, more seat recline and "superior food and wine
offerings," among other amenities, according to SeatGuru. In short,
premium economy is a "very different" experience than business class,
SeatGuru concluded.
While premium economy can attract standard coach customers,
it also runs the risk of tempting business-class passengers to trade down--a
concern that United evaluated before committing to expanding Economy Plus to
Continental. "Based on historical data, I'd tell you that we've generally
seen it as a positive, that people are buying up," Hilfman said.
"They are probably sitting in the economy-class cabin. In international
routes, in particular, those intent on buying business class are still buying
business class. It's just a different product."
Though restrictions on first and business class are common
at corporations, some corporate policies may allow travelers to book premium
economy seats. "I don't know every corporation's travel policy, but I have
yet to hear anybody said that they would restrict any kind of Economy Plus
product," Hilfman said. "I think it's considered a very high-value
product with extremely reasonable pricing."
Partnership Travel Consulting CEO Andy Menkes concurred.
"Premium economy was a stroke of genius, as was BusinessFirst for
Continental when it first came out," he said, referring to Continental's
hybrid first class/business class product. "It looked and felt like first
class but was within policy. Premium economy is the new BusinessFirst. For
those companies for whom business class is still inappropriate because of the
cost structure, premium economy is a good compromise."
Meanwhile, Delta's Economy Comfort seats would account for
the "first few rows" of the coach cabin on 160 international
aircraft, offering four more inches of legroom and 50 percent more recline than
standard international economy seats. Economy Comfort customers also would
"board early and enjoy complimentary spirits throughout the flight,"
according to Delta. Those passengers would pay an additional $80 to $160 each
way, though Delta plans to provide access to the new seats at no extra charge
for full-fare economy passengers and diamond and platinum frequent flyer
program members. Gold and silver frequent flyers would be given 50 percent and
25 percent discounts, respectively.
Source: Management.travel