In an attempt to secure corporate marketshare on business-heavy routes between New York and both Los Angeles and San Francisco, United Airlines today plans to announce a new premium service with a dedicated fleet of reconfigured aircraft. The product will offer lie-flat first class seats, more space throughout each plane and other amenities geared toward business travelers. It will represent the only all-premium mainline service offered by a major commercial carrier in the domestic market.
The first revamped Boeing 757-200 on Oct. 18 will launch the premium service dubbed UnitedPS. By next January, a fleet of 16 aircraft exclusively will serve the two important transcontinental routes, replacing B767s now in operation.
"It will be an international flavor in terms of feel and product standard," said John Tague, United Airlines executive vice president for marketing, sales and revenue. "It is designed to have almost a private jet-type atmosphere."
The aircraft will be configured with three cabins: 12 first class lie-flat seats with 68 inches of pitch, 26 business class seats with 54 inches of pitch and 72 in EconomyPlus with 34-inch pitch. The total seat count, 110, is dozens of seats below the passenger capacity of a standard 757, giving passengers more spacious cabins.
Tague conceded that very few domestic markets warrant this type of heightened inflight service. "This is the opposite end of our Ted introduction," he said. "On these particular routes, the premium business dominates the cabin." The idea, Tague added, is to offer a market-leading product "with enough capacity to accommodate all of our corporate travelers, particularly those on United corporate contracts."
The services will be integrated into corporate agreements, as would any other mainline flights, and will be priced at launch in line with fare levels currently offered in those markets.
"Given our existing customer and revenue base, this clearly is the best economic model for us to operate," Tague said, "but it also will be an anchor product to drive acquisition of other corporate agreements."
In addition to lie-flat seats in first class, which United said is a "breakthrough" for the domestic market, UnitedPS will include inflight dining on par with international service quality and quantity, handheld DVD players in the front two cabins, in-seat phones with JetConnect e-mail service, customized audio programming and laptop power ports at most seats.
Initially, none of United's alliance partners will code share on the flights, though the carrier will review connectivity opportunities.
As carriers spread the low-fare, low-cost model to more of their city pairs to stay competitive against expanding discount carriers, UnitedPS is a counter-trend move to the higher end of the market, which has seen premium products phased out over time.
Several major network carriers have reduced first class real estate while dedicated business jet services, such as scheduled corporate jet flights operated by Indigo and United's aborted Avolar initiative
(BTN, March 25, 2002), failed to gain the necessary market traction.
Though there have been minor upgrades to existing domestic premium services—such as improved inflight menus—no carrier has taken a bold step like United to segment the market. Delta in January completed a small-scale test involving one-class planes with leather seats, 36 inches of pitch and power ports
(BTN, Dec. 8, 2003), but last week said it had no plans to move forward with the concept.
United, however, is convinced. "We have stress-tested this product economically and are highly confident this is the right economic and customer offering for the market," Tague said. "We are more than committed, fiscally and strategically."