It is now official: United Airlines will retrofit its remaining Boeing 767-300ERs with a dedicated international premium economy and offer the product onboard all of its upcoming Airbus A321XLR aircraft. Andrew Nocella, Chief Commercial Officer at United, revealed this on the carrier’s third-quarter earnings call. The reason for this is simple: United is seeing a lot of premium leisure demand and wants to capitalize on that.
United plans premium economy on more jets
United Airlines has 14 Boeing 767-300ERs that have not yet undergone retrofits to feature the new Polaris business class hard product. The already retrofitted 767s are in two configurations, one featuring a premium economy product and one that only offers an extra-legroom economy product – both featuring the new Polaris product. On the 14 unretrofitted jets, United will be ensuring those planes have the dedicated international premium economy cabin, branded as United Premium Plus. While configurations are not out, United is expected to put a fair number of seats in this cabin.
Secondly, United has confirmed that it will be putting the cabin onboard its upcoming Airbus A321XLR aircraft. These long-range narrowbody jets are set to enter service in 2024. Specifically, Mr. Nocella stated the following on the call:
“We’ve made the decision to outfit our 14 remaining 767-300s with our new mid-tier Premium Plus product…We can also confirm that we will offer this separate mid-tier cabin on future deliveries of the Airbus A321XLR due in 2024.”
United’s premium economy cabin
United’s Premium Plus product is a mid-tier premium cabin that is primarily found on long-haul international routes. This cabin offers a seat that is similar to a domestic recliner-style first class cabin with upgraded amenities. It is an upgraded experience compared to economy class, though a few steps shy of the lie-flat seating with direct aisle access that can be found in the Polaris cabin.
Also, on the call, Mr. Nocella stated that 50% of United’s revenue in the transatlantic leisure market came from premium cabins, which was a 13-point improvement compared to 2019. United has a lot of transatlantic exposure, so a result like this is huge for the carrier’s financials and sets it on a course to continue to perform well, especially in an anticipated record-breaking 2022 across the Atlantic, even if business travel comes back late or is structurally impaired to a more considerable degree than forecasted.
United, in general, offers a fairly premium footprint on many of its aircraft. For example, the 767-300ER fleet includes a sub fleet of lightly loaded planes featuring 46 business class seats, 22 premium economy seats, 43 extra-legroom economy seats, and just 56 standard economy seats. The other retrofitted 767-300ERS feature 30 business class seats, 46 extra-legroom economy seats, and 138 standard economy seats.
Compared to Delta’s 767-300ERs, retrofitted 767s feature 26 business class seats, only 18 premium economy seats, 21 extra-legroom economy seats, and 151 standard economy seats. Delta has similarly been making a renewed push for more premium economy seats.
United will likely be putting somewhere in the neighborhood of 20-25 premium economy seats on the 767s. Historically, it has not sought to cannibalize business class capacity with more premium economy seats, but it could come at the cost of some extra-legroom economy seats.
Premium economy on the A321XLRs
The Airbus A321XLR is going to be a massive deal for United’s international fleet. Allowing for the retirement of the 757-200, these planes are set for a largely transatlantic deployment to some thinner markets, like an Edinburgh or a recently-announced Bergen. United has 50 of the jets on order.
Offering a dedicated premium economy on these routes indicates that United is looking to offer a little lighter footprint, as it will definitely be offering a lie-flat product at the front of the plane. It would not be surprising to see United add around 12-16 premium economy seats, ith 12-16 business class seats, and 100-130 economy class seats, just as an example, to get to a load of somewhere around 150-160 passengers.
United’s addition of this cabin onboard its newest aircraft will likely push other airlines to add premium economy on their A321XLRs. This would, namely, put pressure on American Airlines, which has also hinted that such a cabin could be found on the A321XLR, though it has not confirmed anything just yet.
Moreover, this shows that United is continuing to offer a standardized international product consisting of a lie-flat business class, dedicated premium economy, extra-legroom economy, and a standard economy offering. While it may come at the expense of seats on planes, the premium economy cabin has a lot of potential to grow yields compared to what an extra-legroom or standard economy cabin can bring in.
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