United is now launch customer. They ordered 50 aircraft.

United’s response to scope choke. AAG is reactionary, lets see how many they order for the WOs. We know PSA will eventually get this aircraft.

https://hub.united.com/more-comfort-...628146859.html

https://globenewswire.com/news-relea...-Aircraft.html

https://airwaysmag.com/manufacturer/...ers-50-planes/

 

I don't know why we would see these flying with Eagle colors. AAG's small RJ scope is 65 seats. Not 50 like United's is. This is a ploy by United to try and make the best of their scope limitations and the fact that UALPA isn't giving an inch.

They can spin it how they want, but to me it sounds like United is now going to take a 65-70 seat jet and fly it with 50 people on it. And yes, I realize that they can sell a premium seat for a premium price. But lets be honest, half of the people who sit in first don't purchase those seats. They use points to upgrade into them. And they save maybe what? An average of $25 /hour by not having a second FA? I don't see it. Seems silly.

 

I see this as a money-losing aircraft. Why not get a E175 or CRJ-900 and configure it with 70 seats like Delta instead?

 

They did, when they gave Expressjet 25 E175SC's. To do so, they had to drop 25 70 seat aircraft, so rather than totally dumping them, they found a way to keep aircraft around.

 

I think one of two things could happen, possibly both.

1. They will place these on routes that are known to have more people actually paying for the premium seats compared to using their points or miles.

2. They’re also adding premium seats on up to 100 other aircraft including United mainline. Even if people are using points to upgrade, if there’s a better chance that they’ll be able to get first class they’ll be more likely to use United in general. A lot of frequent flyers have multiple loyalty programs so if they think there’s a better chance for an upgrade then they’ll be more likely to stick with that carrier. It’s similar to hotel points. I’m a Hilton and IHG member. I try to stick with Hilton because usually their hotels are a little nicer, and I also usually get upgraded to a better room more often than IHG.

Usually the money they gain from keeping or having a more frequent customer is worth more than the money lost giving away a free upgrade.

 

This. I also think that AAG can add as many small RJs as they would like.

 

United is behind the game on Premium Economy seats. This helps them catch up.

AAG has seen huge success domestically on premium economy seats.

If the route is selective to support mainline routes and range (CRJ700) and timed just right at peak travel season, this could be very profitable for United. AAG being a reactionary leadership/company might find this 3-cabin Bombardier configuration the way to expand premium economy on select routes. If demand, scale, and “the ability to compete” justifies it.