United To Shrink by 10 Percent

I have to say that I’m completely shocked. It looks like United CEO Glenn Tilton, now without any merger options left, has actually decided to run an airline. There are some extremely painful cuts in here, and it’s tough to see as someone who used to work for the airline and still has friends there. But, I have to say, it seems like the right thing to do. This seems to go deeper than American’s previous round of cuts, and I wouldn’t be surprised to see more follow from around the industry. (US Airways?)

So what exactly is happening? Well, to sum it up, domestic mainline flying bears the brunt of the pain. It will be down a mind-numbing 17 to 18% (in terms of available seat miles) by the end of 2009. This will come from the combination of all 94 737s being retired (the 30 737-500s were already planned) and the death of Ted, which will see First Class seats return, and therefore, fewer seats onboard. International will take a hit as 6 747s head to the desert. Express, however, will be up. So in the end, we get domestic capacity down 12.5% to 13.5% and systemwide capacity down 9 to 10%. The airline says that most of the cuts will be in the form of reduced frequencies and smaller planes, but there will also be some market exits (as we’ve already seen with Anchorage).

So, we know the basics here. Fuel goes up, fares need to go up. How do you do that? Pull capacity out. United is doing the right thing, but of course, it will mean higher fares for you. Let’s focus on what’s good for the customer here.

Those ratty old 737s will be grounded

If you’ve been on a United 737, you know they are in rough shape on the inside. Those things have needed to be refurbished for years. They still have the old oven-less Shuttle by United configuration on some of them, so First Class service wasn’t consistent at all. By the end of 2009, they’ll all be gone, and you’ll be on much more comfortable Airbuses as well as 70 seat regionals which are all nicer than the 737s they fly today.

You’re less likely to be on the 747, the worst plane in United’s fleet

With 6 747s disappearing, that means when you fly internationally you have less of a chance of getting stuck on one of the most uncomfortable planes in the sky. Those 747s are relics from a previous age. There are not even personal screens onboard, so forget about audio/video on-demand. And the upcoming reconfiguration with the new Business Class will add a much greater percentage of Economy Minus seats than on the other aircraft types. The fewer the better.

Floridians and desert rats can fly First Class once again

Oh Ted, I can’t even begin to express how happy I am to see you go. 08_06_04 tedsdeadAnd actually, I’ll be devoting a separate post to Ted’s demise, but let’s just say that I’ve waited for this day for a long time. This change will mean that United will offer more consistent service throughout its fleet (well, its fleet of aircraft with 70 seats and higher). Europeans flying in a premium cabin through Dulles to Vegas can now get a premium cabin the whole way through. People living in Phoenix and Florida will again be able to fly long distances in First if they so desire. The downside here? Right now, with 156 seats, Ted has four flight attendants dedicated to coach. That will clearly change after the reconfiguration.

I have to say it again. These changes are encouraging. It’s better for the customer, even if it does mean higher fares. I only wish it didn’t mean so many job losses. What do you guys think?

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