United Airlines Bet’s on Premium Demand in Houston

United Airlines to fly their premium-heavy configuration 787-9s to more destinations starting this October. Internal sources have leaked that the carrier will offer at least four daily flights from Houston on-board these aircraft: to London, Sao Paulo, Tokyo (NRT), and Sydney. This announcement comes with a 30% increase in premium seats on those routes including 99 business/premium economy seats and a 35% decrease in economy seats from current offerings on those routes. 45% of the seats on the reconfigured 787-9 are premium economy or business class, where the other configuration is 27%.  This data indicates a common pattern for these types of destinations: a decrease in coach demand and a shift to premium-heavy offerings. United’s bet on premium offerings dictates the demand increase for passengers willing to pay for upgrades and an elevated experience. This is an expansion beyond the initial West Coast launch from San Francisco to Singapore and London, and Sydney is particularly significant since these are among United's longest nonstop services, which is exactly the kind of route where a premium cabin overhaul matters most. Furthermore, this came as a surprise because United’s first premium 787-9 aircraft had maintenance problems and was pulled from service within a month of operation.

Delta Airlines to fly to Manila- The Fight for Los Angeles Continues; New Routes Leaked

Delta Airlines, an Atlanta-based carrier, announces new nonstop flights from Los Angeles to Manila. This is the second flight offered by U.S. carriers to Manila: United Airlines’ nonstop service from San Francisco. Daily services will be flown on an Airbus A350. This is another testament to my previous statements about Delta trying to win Los Angeles: American can’t win due to construction, and United couldn’t justify service from LAX because of its SFO hub.  Internal memos say that Delta will be flying from LAX to Washington DC(IAD), Singapore(SIN), and Seoul(ICN) next, and this competitive push is just the beginning of what’s getting announced this quarter.

Delta To Roll Out New Pricing System

Delta AIrlines, an Atlanta-based carrier, announces a new pricing strategy. The airline will now offer a restricted fare in the premium cabins. Similar to their basic economy, there will be limited mileage accrual, no seat selection, a reduced baggage allowance, no lounge access, and a cancellation fee applies. This is targeted at passengers who care about the seat, not the experience. This follows competitor, United Airlines recent changes in an attempt to fill premium seats with more revenue passengers rather than upgrading passengers.

American Airlines To Fly Chicago to Tokyo and 3 European Destinations

American Airlines, A Fort-Worth-based carrier, announces service from Chicago O’Hare to Tokyo Narita. This route came expected as the airline fights for makret share in Chicago, and competitor United Airlines adds that route in addition to their daily service at Tokyo Haneda. American will fly their coach-heavy layout 787-9 aircraft.

American has the route timed connections on their joint venture partner Japan Airlines to Bangkok (BKK); Singapore (SIN); Taipei (TPE); Ho Chi Minh City, Vietnam (SGN); Manila (MNL): Osaka (ITM); and more. Japan Airlines already flies the route, with timed connections in ORD from the east coast and southern cities (ex: St. Louis, Miami, Kansas City, Richmond, Fort Myers, Atlanta, Memphis, Tampa, etc). American has had successful results from Dallas to Narita, and with competitve tensions in Chicago figured to move some connetions to Chicago to justify competition with demand. American struggled to rebuild their Chicago hub since covid; consequently, competitor United Airlines went all in on Chicago. American became the non-dominant carrier. Following pressure from the public and board, they have been competing to recover market share in what is arguably the most important market. American has added over 30 routes and in the coming couple months will announce more long-haul services. Expect to see 3 more long-haul services to Europe next summer from Chicago using 787 aircraft and at least one to replace a Philadelphia route. Probable destinations can include Prague, Budapest, Amsterdam, Milan, Zurich, Sao Paulo, Munich, Frankfurt, Lisbon, and Warsaw. My bet: Lisbon, Warsaw, and Prague or Budapest.

Delta Airlines To Fly Los Angeles To Newark, Why This Is So Complex

Delta Airlines, an Atlanta based carrier, to fly twice daily from Los Angeles to Newark, New Jersey. This came interestingly granted that Delta already flies to New York JFK up to ten times daily. Delta must view Newark as a big destination; they are flying the route twice daily, thats 88 business class recliners in each direction. Competitor United Airlines flies this route ten times a day, but that is a different circumsrtance; Newark is Uniteds trans-atlantic hub and will have connecting passengers. Just like Delta’s flight from Los Angeles to New York. Delta makes $449 million yearly on that route.  The odds are that number will go down because some of their JFK customers will fly from Newark for convneience. Delta is filling the flight with Newark being a destination that connects to Los Angeles and their recently expanded trans-pacific network.

What also makes this interesting is that Delta won’t be competitive at Newark and this route is fully directed at Los Angeles. Delta is expanding service in Los Angeles with intentions of winning all the business and credit card spenders through more routes and nicer lounges. Delta is looking for any media it can get in Los Angeles as it targets to drive United out. Expect a punch back from United and expansions from Delta and United, and maybe so American in Los Angeles.

JetBlue to continue reducing operations at New York for Fort Lauderdale

Low-cost airline JetBlue has made some operational adjustments. Following their executives’ warnings of bankruptcy, they are reducing costs and focusing on the market share they can win in the short term. This is done by shifting from high-cost airports such as New York and Boston to lower-cost airports such as Fort Lauderdale. Following Spirits' bankruptcy, there is a lot of claimable market share in South Florida.  Spirit dominated at Fort Lauderdale; therefore, there are more customers to gain, which leads to more credit card revenue. Additionally, they are closing their Tech Op bases at Newark and LaGuardia, as well as their Newark flight attendant base. This is also strategic because they have slots to sell at LaGuardia without losing government subsidies for the year. Fort Lauderdale for JetBlue has much more short-term opportunity, given the strong potential demand from Spirit’s departure and the lack of competitors with a base there. Expect a departure from JFK next because they have 360 slots to sell that American, Delta, and United would likely buy. America competitively needs JFK and should be focusing on scaling there, and United’s CEO, Scott Kirby, has talked about wanting to expand their presence; these slots are very likely on the table. JetBlue needs to just stay in business; furthermore,  they just want to reduce their debt and stay in business.

Delta Airlines Announces Competitive Plan To Win Los Angeles

Delta Airlines, an Atlanta-based carrier, is strategizing a long-haul competition at Los Angeles. They are building a second Delta One Lounge for customers flying in international business class, expanding service to Shanghai and Auckland, and planning a service to Seoul and Manila. Operations from Los Angeles are historically a struggle for airlines due to high operating costs. They already have the most flights and seats from Los Angeles; this should increase their competitive market share with customers and drive Amex card spend. They beat American for New York, and United was driven out, and they have a majority market share in Boston, Austin and Atlanta, which is huge and if they can take LA, they have access to a large credit card revenue increase.

American Airlines Adds Dining Menu At Lounges

Dallas-based American Airlines announces enhancements to its Admirals and Flagship lounges. Following the alcohol upgrades and all the new lounges being built, this is great to see. The Airline has really focused on the premium product and experience; it shows. Furthermore, they offer better lounges than competitors. Although this is nice to see, the airline has other problems they need to focus on that matter more; they lack reliability, in-flight wifi quality, and in-flight dining. I find these to likely be their focus; they have put an emphasis on investing in the customer lately and hired a customer experience team in the past year.

Delta Airlines To Cancel Lie Flat Seating On Transcontinental Routes

Delta Air Lines, an Atlanta-based carrier, decided not to proceed with its Safran Vue seats on its new Airbus A321NEO aircraft. This aircraft is used on premium heavy routes with many business travelers. This is a problem for Delta because its profits come from being the most premium airline for business travelers and from its credit card spend. Delta now lags American and United in premium product for their transcontinental routes. These flights are key to airline profits, with destinations including the following cities: Phoenix, Los Angeles, San Faransisco, Orange County, San Diego, Salt Lake City, and Seattle, to Miami, Orlando, Atlanta, Boston, New York, Philadelphia, Washington, DC, etc. New York and Los Angeles are the largest credit card markets; therefore, this will likely be a profitability problem. Flights between California and the East Coast are among the most profitable routes because of the premium-ticket opportunity, and the older aircraft Delta uses aren’t equipped with competitive, up-to-date seats. Additionally, the older planes do not have enough premium seats to sell. Even if this gets fixed, it will take years to catch up and get those aircraft allowed to operate. Delta has been lagging in its investments in customer experience; the CEO Ed Bastian is famous for promoting “the customer comes first” and investing in the customer.  Delta cheaped out on Amazon Wi-Fi over Starlink, cutting food and beverages in-flight, and struggling with operational performance where it matters, with internal memos leaked pointing it out. (link below). If Delta continues its cost-cutting, it will likely face profitability problems due to a decrease in premium and credit card revenue, just as American Airlines did, and it has been fighting for years to regain market share. 

learn more about the profitability of these routes at https://www.bts.gov/topics/airlines-and-airports/origin-and-destination-survey-data

https://x.com/xJonNYC/status/2060144323820241142?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E2060144323820241142%7Ctwgr%5E1efb2e718b1a8fe6435af5c4dee216d4b6db9c0b%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fviewfromthewing.com%2Fdelta-raises-alarm-in-pilot-memo-jfk-lax-is-failing-the-customers-it-can-least-afford-to-lose%2F

American Airlines Announces Starlink Wi-Fi On Board

American Airlines Announces Starlink Wi-Fi On Board

American Airlines, a Fort Worth-based carrier, announces a new partnership with Starlink for onboard Wi-Fi across over 500 aircraft. American plans to upgrade its Starlink Wi-Fi on over 500 mainline aircraft. This will likely be all of their Airbus aircraft. This includes A319, A320, and A321 family aircraft. The operation is scheduled to be complete for Q1, 2027. What I don’t understand is why this seems to go to these aircraft but not to their Boeing 737 aircraft, which are the root of their Chicago hub, one of their most competitive markets.

This is still a huge customer experience expansion. The airline has continued to invest in the customer experience following a lag in profitability relative to competitors, but both its long-haul aircraft and the Boeing 737 family should also be upgraded.

Competitionally speaking, this is a big win for American. This falls short of United, which upgraded Starlink across its whole fleet, but it beats Delta, which also only put a Wi-Fi upgrade on some of its fleet and used Amazon instead of Starlink to cut costs. Many airlines have announced. These airlines have already announced Starlink: IAG airlines (e.g. Aer Lingus, British Airways, Iberia); Lufthansa Group airlines (e.g. Lufthansa, SWISS, Austrian Airlines, Brussels Airlines, ITA Airways); Hanjin Group carriers (Korean Air, Asiana Airlines, Jin Air, Air Busan, Air Seoul); airBaltic, Air France, Air New Zealand, Alaska Airlines; Emirates; flydubai; Gulf Air; Qatar Airways; SAS; Virgin Atlantic; Southwest Airlines; WestJet; ZIPAIR. From a competitive standpoint for global U.S. airlines, American is catching up to United and Delta through increased reliability and customer investment. Delta is slipping due to cost cuts on Starlink, decreased reliability, and the use of older aircraft on long routes, which are starting to show their age. United’s CEO Scott Kirby’s remarks about there being two global airlines, United and Delta, but I would question if American is starting to offer a better experience than Delta and has more strategic partnerships. American has invested and improved so much in the past year.

United Airlines to enhance JetBlue partnership and new flights to Japan, JetBlue to fly to Milan

United Airlines, a Chicago-based carrier, announces new global network enhancements and a reciprocal benefits agreement with JetBlue. Benefits include seat selection, boarding, baggage, and standby priorities.

United will now fly nonstop from Chicago O’Hare (ORD) to Tokyo Narita(NRT) daily on their 787-10 aircraft. This is United’s second nonstop to Tokyo from Chicago, but the first to Narita. The goal for this route is not because their is demand for a second flight to Tokyo, but United see’s the demand of connecting people to their mini hub operation at Narita where they have connecting flights from the U.S. to Cebu, Philippines (CEB), Kaohsiung, Taiwan (KHH), Ulaanbaatar, Mongolia (UBN) Koror, Palau (ROR), and Saipan (SPN). United has a huge competitive advantage in the demand of American customers because Americans like flying American carriers, and United is the only carrier that offers that. Customers will pay a premium for American carriers, and United, being the only one in that market, will be able to charge high fares.

Starting December 11, United will launch three times weekly winter seasonal service between San Francisco (SFO) and Sapporo (CTS), marking the first nonstop flights between the continental U.S. and Sapporo. Sapporo is popular for tourism and skiing, a snow festival, and world-renowned cuisine. United now offers service to four Japanese airports compared to their competitors’ two. Again, being the only carrier in a market allows it to charge high fares, which is a major profitability driver.

The United and JetBlue partnership, called Blue Sky, is growing rapidly. United now offers reciprocal benefits for frequent fliers, minus upgrades and lounges. This partnership was established less than a year ago; for non-alliance partnerships to expand this quickly is rare. These benefits will be helpful for frequent fliers’ journeys, with reciprocal benefits including complimentary seat selection, priority boarding, complimentary and priority baggage, and standby priorities. Forward-looking, this could be a hint at an incoming merger. Although the Department of Transportation denied JetBlue and American's merger, United has been donating millions to the Department and will be more likely to succeed, though it's not very likely. My theory is that United claimed potential mergers with American Airlines as a cover-up to make the government allow JetBlue to merge with United.

JetBlue announces a new flight from Boston to Milan daily for the coming summer. fares are available starting at $399 in core, $649 in EvenMore and $2199 in Mint for Boston-originating travelers, and from €449 in core, €659 in EvenMore and €1799 in Mint for Milan-originating travelers. JetBlue is the only carrier with the new service.

Spirit Airlines Officially Closes and What This Means For Everyone

Spirit Airlines announced it would close and liquidate all assets effective 3 AM Friday, May 1st. Following loads of mismanagement and multiple bankruptcies, the airline couldn’t continue operations. This is problematic because Spirit was a dominant budget carrier; furthermore, budget carriers are in short supply and will need to raise fares.

Corporally, Spirit's loss is a good thing for U.S. airlines; there is less competition, slots in key markets for sale, and aircraft for sale at low prices(aircraft orders are commonly on backorder until the 2030s). For consumers, this is bad; fares will rise, loyalty programs will worsen, and there will be fewer nonstop flights.

Spirit’s liquidation left 34,000 professionals jobless with no notice, while other airlines have faced labor shortages and offer higher pay. Alternative airlines now offer emergency fares for customers whose flights were canceled in the next two weeks. Due to demand shortages, alternative airlines have empty seats, which is driving extra revenue, with some emergency fares higher than some revenue fares. This leaves me with true optimism for other airlines because it leaves open gates in New York and Florida which means that competition in already competitive markets will increase. This can also help save JetBlue, a competitor based primarily in New York, Boston, and Fort Lauderdale, which has also been surfacing required liquidations within the next year. JetBlue came and went following Spirit’s announcement by operating many of Spirit's old routes that were profitable. These include  Fort Lauderdale to Barranquilla (BAQ), Baltimore (BWI), Cali (CLO), Charlotte (CLT), Columbus (CMH), Indianapolis (IND), Nashville (BNA), Detroit (DTW), Chicago (ORD), Houston (IAH), and Ponce (PSE); seasonally, 1 daily BAQ from October 1: 3 daily to BWI, CLT, BNA, IAH from July 9, 1 daily CMH, IND from November 2, 2 daily ORD, DTW from July 9, and 1 daily PSE from July 9. JetBlue hasn’t made money in six years, but they project this is the save they needed.

For consumers, this is a problem. Following the supply/demand chain, other airlines can now fill more seats and raise costs because supply decreased without affecting demand. In any form, that forecasts fare increases. Additionally, anyone with Spirit points lost all of them. If you have status, JetBlue, Southwest, and Avelo are offering status matches.

American Airlines Upper Management Delivers Business Run Down

American Airlines, a Fort Worth-based carrier, has its upper management deliver a rundown on its business. A lot is coming, and management is finally starting to get it; they are taking a step in the right direction.

They are investing in a competitive experience. They adjusted their headquarters in Dallas to move from 9 heavy peaks of flights arriving at the same time and then departing at the same time to 13 smaller peaks throughout the day. This significantly reduces missed connections, delays, and lost baggage. Although this operation was expensive, the benefits are saving them money and improving customer experience, which is their goal. Spreading out this operation reduces gate stress, ramp crews, baggage systems, customer service agents, taxiways, crew connections, and the ability to recover during irregular operations. In hopes of looking forward to the hub, CEO Robert Isom added that “A lot of people are going to ask why we did not do this earlier. As you grow a hub, you think of different ways to produce revenue and improve the customer experience. We are going to grow DFW to be the largest single-carrier hub in the world. When Terminal F opens, we will have the capacity to run 1,100 flights. It is really important that we get this right.” They are also investing in aircraft maintenance. Chief Customer Experience Officer Heather Garboden explains that “I see this myself when I fly, is that we have too many broken seats. We have too many IFE systems that do not work. We have duct tape where we should not have duct tape. I am excited that we have created a team within Tech Ops whose sole focus will be making sure our aircraft interiors look the way they should for our customers. We are just starting to build that up, and by the end of the summer, I expect we will see significant improvements in our aircraft interiors.” The airline also is looking at adding IFE screens and faster complimentary internet to flights.

They are refocusing on key markets such as Chicago, Miami, NYC, Los Angeles, Phoenix, and Philadelphia. Chief Customer Officer Nat Pieper, who oversees strategy, emphasized the need to grow back in Philadelphia, Phoenix, and Miami to regain market share. This matters primarily because of credit card revenue, but this can also affect flight revenue. Additionally, he is focusing on the loyalty program, customer experience, and premium seats. Those who pay for those premiums generally have strong card spend. He also shares that “Customers in our hubs are our highest-yielding customers. They are the most loyal. They are the ones who want to fly American Airlines and have our credit cards. We are going to generate the most premium revenue from those customers, so of course, that is where we should grow. Philadelphia, Phoenix, and Miami are the places we will grow. We will grow other hubs too, but those are the three hubs where we lost market share over the past six or seven years, and we are going to march right back in and take it. By the way, who backfilled us in those markets? Delta, United, and Southwest. That traffic should be ours, and we are going back to take it.” This is great and hits all the points an analyst would want to hear, but it doesn't focus on Chicago, New York, or Los Angeles. These are the biggest markets, and if they were really trying to see strong revenue, those are the best places to expand; those are the three biggest credit card markets, and they cover so much of the competition in the airlines. They rewon market share in Chicago, but have so much more to win. These cities have so much potential, yet they are ignoring the idea of rapid expansion after the DOT partially capped Chicago departures. In Los Angeles, they have gone from one of the biggest to one of the smallest hub carrier operations; in New York, they fall behind Delta, and they put no effort into building their hub after their JetBlue merger exploded. They are banking on secondary cities, which are for sure huge, but a majority share in one of these cities is so much bigger.

The airline's CEO, Robert Isom, also announced that they might buy assets from Spirit Airlines if Spirit decides to liquidate and shut down.

To summarize, the company is focusing on a much better strategy; I believe Pieper is implementing it to achieve a successful outcome.  While expansions from Chicago, New York, and Los Angeles are lacking, they are really focusing on the majority of their key markets. The continued investment in customer experience is a necessity, and they should see it in their financial results, which Pieper has shared a true understanding of. I find profitability slim in the coming months due to fuel costs, but performance will be much better. They are setting themselves up for a better year compared to competitors.

The Corporate Disaster coming to U.S. aviation

United States-based airlines, including United, Delta, American, JetBlue, Spirit, and more, are falling apart. Due to fuel price volatility, airlines are projecting billions of dollars in losses this quarter and next, and some airlines internally project bankruptcy. Spirit filed for bankruptcy for a second time and is likely to liquidate its assets soon. All other carriers are projecting similar, and this disaster is costing consumers. Fuel surcharges, bag costs, fares, and seat selection rates are increasing while the airlines are reducing mileage earning.

This is shown for JetBlue when watchdog JonNYC shares, “You know, JetBlue’s in a really tough spot. They really are. They, you know, I think I told you this last week, but when Jamie Baker, who’s an analyst for JP Morgan, came out with his estimates for all the airlines based on 450 fuel, two bucks, it showed JetBlue losing $1.3 billion this year. That would probably put them, you know, into bankruptcy, I would assume.” Baker is widely regarded in the industry, and her projection reasonably reflects the surcharges implemented. United Airlines CEO Scott Kirby has made his desire to acquire JetBlue very clear. He is waiting for greater certainty before buying JetBlue and is rumored to be buying American Airlines(which will be touched on later in this article). In the meantime, he is trying to influence government officials not to stop him when it is time to buy JetBlue. JetBlue founder Dave Neelman says that “[T]hat would also take them to $9 billion in debt. Today, they’re paying over 600 million in interest on that debt, bringing the total interest closer to $800 million. So that’d be tough. There’s some thought out there that United’s just doing this with American to clear the decks to buy JetBlue, but I know it from a pretty good source inside of United that they’re very concerned about JetBlue’s debt. And they’re not really interested in taking on that. So I think JetBlue has very few options,” and he also says, “I don’t think Southwest is interested in them. I know Alaska isn’t.” So their best hope, he thinks, is Spirit to go out of business and fuel to get back to $2.50 a gallon. That barely puts JetBlue’s “nose above the water.” United, American, Delta, and JetBlue are raising bag fees by $5-10 each due to rising fuel costs and lower demand.

Spirit Airlines is about to shut down, leaving many slots available at key markets. Bloomberg reports say that Spirit could be liquidated within the next week. They hold many aircraft, gates in Chicago, slots at LaGuardia, and 27% of 2025 capacity at Fort Lauderdale. This is bad for consumers because they will lose their points, and Frontier will be the main budget carrier, leading to higher fares.

United is continuing to make aggressive changes and using manipulation tactics as its strategy. United introduced new premium fares without miles earning and lounge access, and is launching new products, as I covered earlier this month. United is continuing its pattern of manipulation by claiming to buy American Airlines to pressure government officials to buy out or merge with JetBlue. There is zero possibility that American and United could legally merge, and it is unlikely but possible for United to merge with JetBlue. Kirby will try to buy American, fail under antitrust law, then merge with JetBlue, and government officials will be less likely to claim antitrust because they already did it once and don't want to be seen as targeting United. American was rejected for a merger with JetBlue a few years ago, and United will likely be as well.

All airlines are increasing baggage fee costs. Differences are $5-10 granted fuel cost increases. Fares are rising due to fuel costs, and fuel surcharges are being added to tickets.

U.S. Airlines To Offer In-Flight Internet

Delta Airlines, an Atlanta-based carrier, announces in-flight Internet. Delta announced a partnership with Amazon, AWS, to offer internet on 500 mainline aircraft by 2028. Delta is using Amazon over Starlink because it was cheaper, they tell shareholders. This is a huge improvement from the complimentary internet offered in 2023, and should be better than American Airlines Viasat internet, though it is surprising to me that Delta is putting this in 500 aircraft, not the whole fleet.

United Airlines, a Chicago-based carrier, announced complimentary Starlink Wifi and the possibility of in-flight calls. Starlink, the top internet service, is coming to the whole fleet by 2027. I find it unlikely because there is so little time to install it. If done, this will be the fastest be a big win for customers.

American Airlines, a Fort Worth-based carrier, has yet to announce anything since the complimentary internet rollout in January, yet it needs to do something. Their complimentary internet will be the slowest, and they do not have in-flight entertainment screens like their competitors. American removed screens to cut costs, but due to blowback, is reportedly considering re-installing them. American is also reportedly talking to Starlink and Amazon to provide premium internet on board its aircraft. American has had some blowback, but if they implement those potential enhancements and improve punctuality, they will be far ahead; right now, they are behind. American has the top loyalty program.

U.S. Airlines To Announce New Fare Types

United Airlines, a Chicago-based carrier, announces a new fare system for Polaris Business and Premium Economy seats. The airline will now offer three ticketing tiers for those ticket types. To view, click here. The airline is trying to sell benefits for an upchrge that were originally included. The airline claims this can lower fares, but I find that extremely unlikely, and rather, they will take a tailwind. My guess is United Basic fares will be the same as the old rates, and flexible fares will be an upcharge. Truthfully, I don’t like this from a customer perspective because this takes away change and benefits unless you pay a premium, but from a corporate perspective, I cherish this because limiting change will reduce last-minute changes, and those who change travel plans are corporate customers who are their large spenders that have close to no budget and it is like printing extra money for United. This drives a bigger question: Delta was the first to announce this to come, but hasn’t released specifics like this, will all of the other U.S. carriers follow United's lead or stick to the likely passenger preferred offering.

United Airlines CEO Makes Conflicting Financial Projections

United Airlines, a Chicago based carrier, announces some network changes. Recently, the airlines CEO Scott Kirby announced that the airline will be cutting up to 5% of its services due to a rise in fuel/oil costs. The Iranian tensions have caused a surge in oil costs. Following this, he, in contrast, made announcements of over 200 aircraft on order. In addition to this, United is announcing a new configuration for some of its aircraft and a new product where 3 coach seats make a bed. What is incredibly clear is he is betting on expensive fares to offset his costs, and the high fuel costs will not last long.

On March 20th, Kirby publicly warned that “our plans assume oil goes to $175/barrel and doesn't get back down to $100/barrel until the end of 2027,”  and “If prices stayed at this level, it would mean an extra $11B in annual expense just for jet fuel. For perspective, in United’s best year ever, we made less than $5B.” (United Newsroom). United announced a 5% schedule cut. Although he is predicting financial problems, Kirby doesn't seem concerned. In the letter, he claims that this is an opportunity for long-term focus, focus on investment opportunities, nimbly manage schedule, and capitalize competitive dynamics. 

Following Kirby’s schedule reduction, United announced the order of 250+ mainline aircraft, new premium products, and the reconfiguration of aircraft. On March 24th, United held a press conference in Los Angeles, showcasing its new premium heavy 787-9,  and announcing:  “Coastliner” A321NEO, A321XLR,  and CRJ 450 aircrafts. United has its premium configuration 787-9 launching April 22nd out of San Francisco. This contains its new suites, and the most premium configuration used on a 787 from any airline. The aircraft will fly to Singapore and temporarily Houston for crew familiarity. Following this, United announced that they will now have “"Coastliner" Airbus A321neo will fly between West Coast hubs in Los Angeles and San Francisco and Newark/New York starting later this summer – includes all-aisle access lie-flat United Polaris® business class seat and United Polaris lounge access, a first for United's domestic travelers.” This came without surprise given that competitors American and Delta already offer lie-flat seats and lounge access to travelers on coast-to-coast routes, and United will do anything to compete in a business travel-heavy route for premium customers. New York and Los Angeles are the two biggest markets in the United States. To replace the aging Boeing 757, United announced the new Airbus A321XLR. This will be seen on South America and shorter European routes. It features a lot of premium seats for a small plane, 20 business class seats and 12 premium economy to be exact. United announced its CRJ 450 aircraft to come into place as well. These will replace its older Bombardier aircraft, with a reduction in seats of only 41 from a standard 50, but will also feature a 9-seat first class cabin. Though the seat reduction is because they are adding luggage lockers in the front of the plane instead of overhead bins to promote comfort. Finally, United announces a new “Relax Row” feature onboard its long-haul 787/777 aircraft. Launching in 2027, they will take 3 dedicated rows and make them transformable to a bed. “This new, dedicated row of three seats is outfitted with individually adjustable leg rests that fold up at a 90-degree angle to create a more room to sleep, stretch out or watch a movie. The United Relax Row is ideal for families traveling with small children, solo travelers and couples who want the value of United Economy but with a little extra comfort. Customers traveling in United Relax Row will receive additional amenities for their flight including a custom-fitted mattress pad, a specially sized plush blanket, two additional pillows, as well as a plush toy and Children's Travel Kit for families.” (United Newsroom). Following Air New Zealand’s successful launch of this product, United is clearly making an attempt to fill its empty spaces with at least partial revenue. 

United has made some highly conflicting statements, and there is not much of a clear direction. It conflicts because they are talking about reducing operations, but buying more aircraft and expanding.  My interpretation of this is that United is going to have some heavy losses due to fuel, but they are optimistic that following a return to normal fuel costs, travel demand(particularly premium demand) will continue stronger than ever before, and with its new aircraft, there will be better revenue produced.

Delta To Add New Routes From Austin, What Does This Mean

Delta Airlines, an Atlanta-based carrier, is adding daily flights from Austin to Phoenix. While this sounds like normal expansions, this means a lot more. They are coming to American Airlines' mini hub and have been adding routes to Seoul, and over 30 other daily departures. Already, Delta has added a flight attendant base in Austin. They’re talking about offering up to 150 daily flights from the city. In the fall, on an earnings call, Delta explained how Austin is great for credit card revenue. Austin is now a turf war dominated by Delta.

FAA to put a line in the sand on the Chicago Airlines Turf War

Chicago O’Hare International Airport, one of the world's busiest airports, has reached maximum capacity. American and United Airlines both own hubs and have been competing for market share. Both have been adding routes to earn gate space. To manipulate American out of Chicago, United’s CEO told analysts that American was losing nearly a billion dollars annually. His plan did not go as expected, and analysts did not force American out of Chicago. Following this, American’s CFO reported that from credit card revenue, American actually made money from Chicago, and they are going to keep expanding. Both carriers were scheduling random flights to one-up each other, and in the end, the FAA said enough. The FAA forced the airlines not to add those flights, but rather to return to their prior schedules.  This means there will be new forms of competition in Chicago. Examples will be bonus miles for card spending and rate decreases.

Airlines Announce New Premium Catering

American Airlines, a Fort Worth-based carrier, has experienced catering issues at London Heathrow. A mouse was found in the catering. In replacement of the problem, the carrier upgraded the catering this week. I will link internal memos below. Following this, competitor United Airlines announces new catering as well. Effective August 1st, United is teaming up with Chef's Table, the brand behind the award-winning Netflix series, to introduce 10 new, exclusive meal experiences to its Polaris international business class menu. The airline has enlisted 11 world-renowned chefs from four continents – representing United's seven U.S. hub cities and key international gateways in London, Tokyo, and São Paulo – to curate regionally-inspired meals. This was overdue for United, having flown Polaris, it is lacking. Catering was burnt, they ran out of options, and it takes a while to make.

https://x.com/xJonNYC/status/2031173160876265485/photo/1