Earlier this week, Breeze rolled out its first A220-300. With all the speculation about flat beds and what else might be on the airplane, the reality feels pretty tame. There is, however, one thing that stands out. There are a LOT of premium seats on this airplane. Let’s do the math to see if this makes sense. (Spoiler alert: It does not.)
The A220-300 is roughly a 737-700 sized aircraft. Delta, for example, puts 12 First Class, 30 Comfort+, and 88 coach seats onboard for a total of 130 seats. Without extra legroom seating, Air Canada fits 137 seats onboard with 12 of those in First Class. Korean has 140 with no true First Class onboard, and airBaltic puts 145. With that context, it’s somewhat surprising to hear that Breeze will have less density than all of them with only 126 seats onboard.
The breakdown is very, very premium-heavy. There are a whopping 36 “Nicest” seats — which look a lot like domestic First Class — filling up the entire cabin in front of the wing with 39 inches of pitch in each row. There are then 10 “Nicer” seats spread over two rows at the overwing exit. Those have 33 inches of pitch, though it looks like one row has more than that. Then in the back, there are 80 “Nice” seats with the first row at 31 inches of pitch and the remaining 15 at 30 inches.
This all feels very standard behind the wing, but up front, it’s pretty shocking. Can they really justify having 36 First Class-style seats? Let’s do some math.
Here’s a look at the actual layout and then a proposed alternative.
The front half of the airplane has nine rows with four abreast at 39 inches of pitch. In theory, that means it could instead have 10 rows with 32 inch pitch and 1 row with 31 inch pitch instead. With a normal five abreast configuration, that means instead of 36 seats, it could have 55 seats, an increase of 19 making for a total onboard of 145.
Breeze needs those 36 Nicest seats to generate the same amount of revenue that 55 Nice seats would generate. That means requiring a more than 50 percent premium over the regular Nice fare to breakeven, and that seems highly unlikely.
Of course, that configuration may not be realistic. Airlines have been bullish on extra legroom seating, so maybe Breeze feels that calling as well. Let’s say it opts for 10 rows of Nicer seating with 35 inch pitch. That means there are 50 seats instead of the 36 Nicest seats, and that means there’s a necessary 39 percent premium over the Nice fare to justify this. Again, that’s a lot, though it would be a lot worse on a 737 or A320 where you’d need to drop from six to four abreast instead of the more favorable five to four abreast on this airplane.
Not all of these seats will be filled; we know that. So that further brings down the premium required if you just assume that you don’t need that many seats on an airplane. Exactly what that looks like is hard to know in advance, but it would have some impact. Maybe Breeze just assumes it can’t fill 145 seats, so it might as well go low and gain range so it can connect some of these far-flung destinations that CEO David Neeleman likes to talk about. But that still requires fares to be high enough.
The thing is, the big issue here isn’t around the number of extra legroom seats onboard but rather the percentage of total seats that require an upsell. On the surface, it may not sound crazy. After all, look at the Breeze layout compared to a United 737-700.
The percentage of premium seats is virtually the same, but this is a very, very different story. First and most glaring is the difference in extra legroom seats vs First Class-style seats. Breeze has 28.6 percent of seats in First Class while United has 9.3 percent. Extra legroom seats take up far less space and require a much smaller upsell. But beyond that, United uses its extra legroom seats as a giveaway for its elite members, so there is added value outside of a pure transaction. Breeze does not have that.
A better comparison here is JetBlue which happens to fly the exact same aircraft type.
JetBlue has no First Class (er, Mint) on these airplanes, and only a fifth of the seats are extra legroom upsells. JetBlue does give free upgrades to Mosaic elites on the day of travel only, so that helps give an nice perk which also fills the seats if they can’t be sold, but ultimately it’s not a huge number of extra legroom seats anyway as a percent of total. Breeze is in a totally different world on this.
On this airplane, JetBlue has 4 rows of 35 inch pitch and 7 rows of 32 inch pitch. If they wanted to add another row, they’d have to go down to 30 inch pitch and that would still only gain 5 more seats while compromising the airline’s core product. Having extra legroom options make perfect sense here, and it doesn’t sacrifice much.
For Breeze, it’s different, so you’d think the airline would need a much higher upsell to justify the configuration. That, however, seems to be the opposite of what David said at the rollout, suggesting that people will pay an extra $50 or so to sit up front. That math doesn’t make sense.
Yes, these airplanes will focus on longer haul/transcon flights, but we don’t know routes yet. And sure, there is more demand for upgraded seats on a longer flight, and the fact that Breeze won’t install AC power outlets in the cheap seats might be incentive enough — it will have USB power, but that doesn’t help my laptop — but I don’t see how the $50 upsell works financially. For $50 to be a worthwhile upsell, Breeze would have to have low standard fares of around $100 or a bit higher, and that isn’t sustainable for a long-haul anyway.
Breeze did tell reporters that it can convert configurations if it wants to replace Nicest with Nice/Nicer seats, but this is no quick change. It takes a day or two to do it, and that’s a lot of time for that airplane not to be flying. Remember, unlike the Embraers, the A220s are not cheap to acquire. Those things need to be in the air often and they can’t be changed frequently. Think once or twice a year as opposed to once or twice a week, if the configurations change at all.
Don’t get me wrong. It’s a nice-looking product will that blue mood lighting that seems like a nod to David’s blue past lives. There will be demand to buy-up, but when you have more than a third of your aircraft requiring people to pay more, you run into trouble unless you’re flying a super premium route like NYC-LA or London. And in those cases, the product is woefully inadequate compared to the flat beds that ply the skies. It’s also not the airline’s stated mission.
I am never willing to count a David Neeleman airline out, but on this decision, I just don’t see how it makes sense. The good news is… when it doesn’t work, the airline can easily reconfigure the airplane with fewer Nicest seats.
29 comments on “Doing the Math on the Premium-Heavy Breeze A220s”
This is offtopic to the whole Breeze thing, but honestly I’m surprised you didn’t write an article about Alitalia finally ending operations and ITA launching. I’m aware that you did write an article about ITA when it was first announced, I just thought you’d write an Alitalia article to coincide with the death of your favorite airline.
I may be wrong, but I get the sense that Brett views Alitalia/ITA as a bit of a phoenix, in that it never seems to really “die” (at least not in practice, only in name), but is instead reborn from the ashes of its predecessors.
While we’re on the topic of relating Greek mythology to Italy’s national airline, the story of Sisyphus may feel especially relevant to managers at the airline, but I digress. :-)
Not a phoenix, more like a vampire that someone drives a stake through but then someone else pulls the stake back out and it comes back to life. An undead monster.
Kilroy – That’s right. I really should write a post on it, but as far as I’m concerned, this is still Alitalia. It’s just the Italian government doing everything it was forced to do by the EC to make it look like it wasn’t. But Alitalia will never die!
Give it a few months to see what differences actually stick between ITA and Alitalia.
Very interesting analysis.
Another way to look at it is that ~40% of the square footage of Breeze planes’ passenger compartments is dedicated to the “Nicest” seats at 2×2 configuration with a 39″ pitch. That’s a lot for any plane, but especially for a plane flown mostly domestically by a start-up airline. It will definitely be a fun experiment to watch.
That configuration might make a bit more sense for planes meant to (say) fly charters for large sports teams (put most of the players in the more spacious seats, coaches/support staff/media in the tighter seats in the back), but these planes are too new and too expensive to be used for that any time soon, and even if charters were a part of Breeze’s business model (which I don’t believe they are).
That said, I’m salivating at the opportunity to fly in an A220 as a passenger, especially if the market forces Breeze to offer the spacious seats at a relatively cheap premium to the seats in the back.
Kilroy – it’s funny you mentioned sports charters, as that’s exactly what I thought as well!
A relative of mine was once flying JFK-SEA (I think) on Delta, and something happened where they had a mechanical and the only available aircraft was a 757 or 767 (I believe) that was normally used for sports charters. As the number of people that needed to be accommodated was within the aircraft’s capacity, they subbed it in after a couple of hours’ delay. Needless to say, it was very premium-heavy, and essentially I think anyone with any kind of SkyMiles status got a first class seat. (This was a few years ago, but it may have already been the Delta One pods…I would need to check to confirm…)
Interesting analysis, Mr. Cranky!
As they go into longer routes, I can see having a “Nicest” seat up front, if nothing else similar to Spirit’s “Big Front Seat” which on transcon flights can be a really good deal – I paid $50 extra on a $99 fare from TPA to LAS and really appreciated the comfort on an early morning departure.
But NK only had two rows of BFS while Breeze is dedicating a lot of real estate to the product, and it puts them in the position of having a “Nice” product with a 30″ pitch. Takes a lot of chutzpah to call that “nice”.
Maybe as they expand into longer flights and more vacation-oriented destinations they’ll find more passengers willing to splurge?
I flew Breeze in July round-trip from Tampa to Fayetteville, Ark. I bought Nicest one way and sat first row window. Cabin service was identical on each segment. Cabin attendants were all new and partly foreign. For several, English was not their first language. There were 5 attendants…2 were on their first flights and in training. Uniforms were dull colored, casual, untucked and looked very cheap. Gate agents also were new to airline and airport work. It was not unpleasant at all but somewhat amateurish for lack of a better term. I hope they succeed. Each flight was on time and/or early. But a long flight in a Nicest seat will need a better cabin service than a bag potato chips.
If the price is right, why would you are about having a better soft product in Nicest vs. in the cheaper seats? Something like a decade ago I would upgrade 100% of the time Frontier flew an E90 on a route because their $25 Stretch seats were ex-Midwest Domestic F (1×2). I didn’t care that the service was identical to Economy because the upcharge was minimal.
Then on top of that Breeze can add fare bundles to add a level of service that gets a little closer to Domestic F, though my bet is that they won’t go all the way there because they won’t find 36 customers per flight who’ll care.
Stephen – You would have flown in Nicer seats. The Nicest seats don’t exist on the current Embraer fleet.
Thanks Cranky. I was not fully aware of the Nicest seat gradients at that time and still find this a bit confusing. But what surprises me is the willingness to confuse the product from day one. That will require more hand holding by staff unlike the Southwest model of same seat and service for everyone. This will add to costs and consumer confusion early on.
Yes, I tend to agree with Cranky’s assertion here. Beautiful looking interior but with an excessive number of “nicest” seats. It seems to me that you could axe half of them and replace them with “nicer” seating and do a whole lot better revenuewise. In fact, I’d encourage all airlines to have lots of extra legroom economy seating at a reasonable upcharge. People will happily pay for the extra space, as long as the upcharge isn’t unreasonable. And, others will be extra loyal to you in order to maintain status and the ability to upgrade into the extra space economy section. Speaking for myself, it’s one of the main reasons I make sure to maintain at least silver on UA. I’m 6’5″ and my company will not pay for domestic first/business class (in fact, the minimum flight time to qualify is 8 hours). So, this is a matter of survival for me when I fly. And I’m sure not alone.
Thing is, Breeze doesn’t even have an elite program, and will never have the network to truly support one. So every premium seat in the plane is either additional revenue or luck of the draw on check-in, with modest upcharges for the former (the upcharge for extra legroom seats on existing Breeze flights is like $20 over a seat assignment at all). So “take seats out to pamper elites” isn’t in Breeze’s calculus here.
I’m not an expert on airline revenue management, so I’ll forgo a comment on that specific issue. But I do want to make the observation that this configuration is reminiscent of the late Midwest Express/Midwest Airlines in its later years. All Breeze needs to do is add the baked onboard chocolate chip cookies. I flew Midwest to Milwaukee a number of times and really liked it. It was one of the few reasonably comfortable rides I’ve ever had on an aircraft.
To satisfy my curiosity, I’m going to check out how Delta is configuring its A220-300s, since that should provide more of an apples-to-apples comparison. And since Delta is perfectly run, at least to one individual who regularly weighs in here, it’ll be an interesting comparison, especially since a perfect airline’s configuration can’t possibly be flawed. But then again, maybe I’m being a bit too sarcastic.
I should clarify that I’m going to check out a seat map of Delta’s A220-300s.
I also remember MidwestExpress and was thinking the exact same thing. They were great. The planes were old (DC-9-10s/30s, and a few MD-80s), but they were a secret little gem.
Give everyone a “nicest” type in flight experience, and you can let the other airlines take the lowest fare travellers with their Basic Economy 30″ middle non recline seats.
I find it quite interesting that there’s only a 4 seat difference between Breeze’s configuration and Delta’s.
I was thinking the same thing about Midwest. Take a 5-across airplane (MD-80s and relatives in Midwest’s case) and configure a lot of it with a domestic first class-like seat in a 2×2 configuration. I lived in Madison in their later years and either took the 18 minute MSN-MKE hop or just drove to MKE for a nonstop several times (and even flew through their short-lived MCI hub once or twice); obviously a nice way to travel. But they couldn’t make it work with post-9/11 travel trends, rising fuel costs, and a Milwaukee hub. I would pay a small premium to fly Midwest, but not the ?50% premium that is proportional to the extra floor space of one of those seats.
Cranky, although the planes serve a different purpose I can’t help but see similarities to United’s CRJ550’s. Do you have any data on First LF’s and yields for that experiment, compared to coach?
It does seem like a very premium heavy cabin, but anecdotally first always seems to be sold out now. If the rise of “premium leisure” is a real thing, you could see this being successful at soooome times of the year on Florida/Hawaii/Mexico flights, or Colorado ski destinations. Year round… seems like a stretch.
RFG – Hmm, I don’t think I can break down load factor by class of service.
But then again, this airplane only really operated for a couple months before the pandemic, so it hasn’t really proven itself.
This is very different because United has an artificial restraint through its pilot contract. If it wants to fly more regional aircraft, they have to have 50 seats or less. So this is United doing it because it thinks there’s enough demand. It would absolutely fly these at CRJ-700s if it was allowed to do so. But since it can’t, it might as well go more premium since it has the space.
The real question, as CF noted, is the routes the A220-300s will fly. The A220-300 has the best per seat economics of any commercial aircraft under 160 seats, bested only by the A321NEO and the largest 737MAXs. It will be a good while before there are alot of them in service relative to A320 and B737 family aircraft so the airlines that have them will have an advantage.
The A220 has long legs so a premium configuration could command a premium on transcon plus flights if Breeze uses the aircraft for those types of routes. The question is the airports that could be involved and the size of the demand on those city pairs.
Neeleman proved he can create a new level of demand by going premium and low-cost. The indications are that he is planning to take that model to another level w/ Breeze.
Of note, Breeze’s E90s are even more premium heavy, at 48/108 Nicer seats. Now, the remaining 60 seats are a bit of a crunch, and the E95s are significantly lower-premium (6 rows out of 30-32 I think?), but there’s precedent here, particularly if Breeze wants to explicitly go after routes where even after demand stimulation they’re only at ~120 passengers per flight.
This might actually be a range play too for international. These seats are comparable to/better than both Domestic F and most international Premium Economy by pitch and width, so Breeze could market the seats up front similarly to Norwegian (RIP’s) 787 premium class, albeit on 6-7 hour flights rather than longer ones. They can connect pairs that no one else has a plane to hit, and if the cost structure is right, they can undercut competitors’ premium economy and fill the seats. Or fly where competitors have a gulf between expensive Domestic F and extra-legroom economy (so, narrowbody-accessible South America) and price a little above other airlines’ extra legroom economy to guarantee a nice(st) seat. Seems like it could work.
Heck, this could absolutely increase SAT’s catchment area compared to AUS, depending on where Breeze throws planes.
Does Breeze have an ETOPS certification yet?
I think a more realistic branding for the seats would be Nice, Decent and Terrible. Might also increase the upsell rate.
The X factor here (in my limited experience on 2 Breeze flights) is that they price the upsell exactly right.
In both cases “nicer” was $5-$10 more than unbundled “nice” + seat assignment + carry on. I’m not usually one for paying more for premium economy, but if you’re giving me the two things I’d buy unbundled PLUS extra legroom, priority boarding, and a checked bag for only an extra $5? Yeah I’ll actually take that deal and presto, Breeze sells a premium seat, they get a few more bucks from me than they would have otherwise gotten, and I’m happy about it!
The app was an unmitigated disaster though. Maybe I’m being too harsh. Who needs to know what time the plane lands anyway?
If Breeze didn’t have David Neeleman at its helm, I think we would all be rolling our eyes at this launch as the latest in a long line of new airline failures.
This reminds me of what Lamar Muse did when he came back to try and save Muse Air (failing, ultimately selling it to Southwest). He reconfigured the MD-80s and DC-9s by putting first class seats from the wing to the nose. But he charged a premium initially of only $3 on some routes. The experiment still failed (going head-to-head with Southwest didn’t help and was a dumb idea for the airline to begin with–in those days, WN was actually a good airline).
I think there’s no puzzle here, the math checks out. Cranky’s analysis is very insightful as always, but it depends on the assumption that it is feasible to serve the same market with an alternative, more dense configuration. In that case, every premium seat should earn the same revenue per floor space as an economy class seat to make economic sense.
But for direct long range transatlantic flights from the US to Europe, the math is different. The A220 doesn’t have enough range to serve relevant direct flights between the East Coast and Europe with full payload, especially on westbound flights. The plane will anyways have to remain somewhat more lightly loaded to avoid having to make a fuel stop in Gander. Going premium heavy is the best way to reduce the payload to acceptable levels for long range / TATL service, which is what this seat configuration is hinting at.
It will be true that a premium seat on a long and thin TATL A220 route like LUX-NYC will fail to yield the same $ revenue per square foot of cabin space as an economy seat (which is the opposite of normal long range flight pricing), but that’s irrelevant in some sense. The only alternative would be to deploy an aircraft of greater range and much higher trip cost like the A321LR or even A330neo. With its higher structural weight and dated aerodynamics, I guess that it wouldn’t beat the CASM of a premium-heavy A220. And on the revenue side it would be a disaster to have to sell all these additional seats into a quickly saturated market.
In short, the math totally checks out provided that the A220s are going to be deployed on 8h+ flights right at their range limits. In some sense the seat map is already telling us what Neeleman is up to because for <7h flights the configuration indeed wouldn't make much economic sense.