American is in the process of installing premium economy throughout their longhaul fleet. On the surface this seems like a good thing — economy seats keep getting smaller and business class seats keep getting bigger, so it’s nice to have an option inbetween the two.
The bad news is twofold:
- Premium economy is in some cases coming at the expense of business class seats, meaning that upgrades and award seats in business class will be tougher to come by, not to mention that on average people will have to pay more for business class seats (simple supply and demand)
- While this hasn’t happened yet, I could see upgrades eventually being restricted to one cabin, meaning it would only be possible to upgrade from economy to premium economy, and to upgrade from premium economy to business class, meaning that economy to business class upgrades would no longer be possible
American has already outlined how they plan on removing eight business class seats from some 777-200s as well as some 787-8s, and it looks like they’ve now finally loaded some of these 787s into the schedule.
American’s 787 business class seat
Historically American’s 787-8s have 28 business class seats, which is a decently sized business class cabin, though not huge.
As of May 2, 2019, most flights operated by American 787-8s feature just 20 business class seats, as well as 28 premium economy seats.
Keep in mind that on some longhaul flights, one of the business class seats is a pilot crew rest, meaning that in some cases there will be just 19 business class seats for sale.
It goes without saying that this will have a very negative impact on upgrades and award seats, since 20 business class seats really isn’t a lot.
How do American’s 20 business class seats on the 787-8 compare to other airlines? To compare them to the three other North American airlines operating the 787-8, Air Canada also has 20 business class seats, Aeromexico has 32 business class seats, and United has 36 business class seats. As you can see, American is on the lower end there, especially when one seat is used as a pilot crew rest.
How do you feel about American reconfiguring their 787-8s with premium economy and fewer business class seats?
(Tip of the hat to JonNYC)
What’s ruining American isn’t just their CEO
It’s called complexity
To many classes and to many elite tiers
Everything is complicated at American
getting a seat for a handicapped person
Getting a seat assignment when booking through another One World partner
Almost everything they do is unnecessarily complicated and making things
at every point and turn frustrating from an upgrade to a forever boarding process
Unfortunately I...
What’s ruining American isn’t just their CEO
It’s called complexity
To many classes and to many elite tiers
Everything is complicated at American
getting a seat for a handicapped person
Getting a seat assignment when booking through another One World partner
Almost everything they do is unnecessarily complicated and making things
at every point and turn frustrating from an upgrade to a forever boarding process
Unfortunately I left not long after their Titanic of a ceo ruined an airline ,a program and a fair enough business culture
@Xtina Don't take what you have now for granted. In few years the best you might get is D) Moving from a middle seat to an aisle or window seat. And yes please switch airlines, all legacy is probably the same by then. Legacy carriers are the new Spirit Airlines.
@Dave and Lucky - I got the same survey today about upgrades and what I would consider an "upgrade". There was definitely an undercurrent of commoditizing small service elements and it seemed like they were rethinking the 500 mile certificates. As mostly a domestic flier (Pt) on paid economy tickets, I got this surprising question:
Which of the following would you classify as an upgrade if it was offered to you?
A) Moving from...
@Dave and Lucky - I got the same survey today about upgrades and what I would consider an "upgrade". There was definitely an undercurrent of commoditizing small service elements and it seemed like they were rethinking the 500 mile certificates. As mostly a domestic flier (Pt) on paid economy tickets, I got this surprising question:
Which of the following would you classify as an upgrade if it was offered to you?
A) Moving from a regular Main Cabin seat to a Main Cabin Extra seat that has increased legroom, early boarding, and free alcohol.
B) Staying in the same cabin and seat, but being provided enhanced food offerings and alcoholic beverages.
C) Moving to a higher cabin (e.g. Main Cabin to First Class)
D) Moving from a middle seat to an aisle or window seat
E) None of the above.
I will drop my AA loyalty immediately if they think A, B, or D constitute an "upgrade". MCE is a minimum for those with status.
Demand for business class seats is not static. It varies by route, by day of week, by time of year, and by airline. Let's suppose that on a specific AA route, they can sell 24 J seats at normal J fares on Sundays, Mondays, Thursday, and Fridays, but only 18 on Tuesdays and Wednesdays, and only 16 on Saturdays. Should they size the cabin for the weakest demand or the strongest, or in between? If...
Demand for business class seats is not static. It varies by route, by day of week, by time of year, and by airline. Let's suppose that on a specific AA route, they can sell 24 J seats at normal J fares on Sundays, Mondays, Thursday, and Fridays, but only 18 on Tuesdays and Wednesdays, and only 16 on Saturdays. Should they size the cabin for the weakest demand or the strongest, or in between? If the cabin is too small for peak demand, AA is deliberately driving business class purchasers to other airlines, replacing them with Y/PE sales.
A seat used for an upgrade is not necessary a loss for the airline. If a frequent flyer regularly flies AA specifically because of status and upgrades, that represents multiple seats across multiple flights at usual coach fares (not basic economy) that otherwise might be purchased on a different airline.
Ryan - you should broaden your horizons. United still flies 2-4-2 seats in International business - great when introduced but outdated now. United and USdbaAA are flying brand new planes with no IFE, while Delta puts PTV's on newly delivered planes. USdbaAA plans to remove IFE on existing planes while Delta adds PTV's on its existing planes. As for fist class dining, quality varies on all airlines but most people believe USdbaAA has the worst...
Ryan - you should broaden your horizons. United still flies 2-4-2 seats in International business - great when introduced but outdated now. United and USdbaAA are flying brand new planes with no IFE, while Delta puts PTV's on newly delivered planes. USdbaAA plans to remove IFE on existing planes while Delta adds PTV's on its existing planes. As for fist class dining, quality varies on all airlines but most people believe USdbaAA has the worst First meals of the Big 3. USdbaAA gutted its frequent flyer program the past few years that it's now arguably worse than Delta.
Anthony - whats to like about Delta's product. Their planes are mostly old Sh** Boxes that and hey pump some sort of moth ball scent through all their aircraft ( has anyone else smelled it). They also have the worst First Class dining (if you would call it that) a barely-usable frequent flyer program and the worst International business class product from lack of lounges to a crappy onboard hard and soft product.
I'm an EXP with AA and have been for many years. Interestingly, I got an email survey invite from AA today that focused entirely on their upgrade program. I made it clear that I wouldn't be happy if upgrades from economy were into MCE or premium economy, but they're clearly taking a close look at their upgrade program for elites. Hopefully they take the customer responses seriously.
John - it's better to compete for business travelers on product (routes, service, plans, etc) rather than a frequent flier program. Delta has endlessly devalued its frequent flyer program, yet tends to beat other airlines (AA, United, B6, Southwest, whatever) in competitive markets because business travelers like the product.
What routes is American using the 787 for?
Premium economy seats aren't necessarily a bad thing if you can redeem them for fewer miles (or pay less in cash for them), particularly on westbound transatlantic flights. BA has long had a pretty successful premium economy cabin (obviously people here don't love BA, but it is what it is).
@Lucky - Ah, I see what you mean now. Unless willingness-to-pay also increases I wouldn't be too worried about it.
If you're buying a seat, why do you care how many seats are in the cabin around you? If you're not buying a seat, you're proving AA's point. Hate to break it to you but upgrades don't pay the bills.
@ KJ -- Well because you'll be paying *more* for a business class seat on average if there are fewer seats. Simple supply and demand. So do people paying for business class seats also not pay the bills and prove American's point?
The way this net reduction in J seats on 788s could play out is the retirement of older 332s. These changes closely mimic the current configuration of former US Airways aircraft and with further Dreamliner orders down the line the reconfigured ones may just replace the remainder of the ageing Airbus long haul fleet out of PHL and CLT ?
On the other hand this could just be me and they are indeed rightsizing their...
The way this net reduction in J seats on 788s could play out is the retirement of older 332s. These changes closely mimic the current configuration of former US Airways aircraft and with further Dreamliner orders down the line the reconfigured ones may just replace the remainder of the ageing Airbus long haul fleet out of PHL and CLT ?
On the other hand this could just be me and they are indeed rightsizing their fleet to actual demands they can fill revenue seats with.
@Ryan, @The nice Paul
Agree to both of you. From a personal and not corporate view, it is expensive to have status BUT status do have diminishing return after a certain cutoff. If you pay for a $10,000 first class ticket you could either earn MAX 75,000 or A LOT MORE somewhere else. Same as status miles, EQM exceeding EXP is almost just for chasing the another marketing gimmick MM/SWU and to most isn't worth...
@Ryan, @The nice Paul
Agree to both of you. From a personal and not corporate view, it is expensive to have status BUT status do have diminishing return after a certain cutoff. If you pay for a $10,000 first class ticket you could either earn MAX 75,000 or A LOT MORE somewhere else. Same as status miles, EQM exceeding EXP is almost just for chasing the another marketing gimmick MM/SWU and to most isn't worth a lot and hard to reach.
While having the mythical status such as concierge key or GS or DL360 can help you from time to time, they don't really PAY exceptionally to keep my business. Never heard anyone got a private jet for IRROPS nor waiving the 15th bag fee from all the shopping spree. I do know about a one DL360 getting stuck in middle seat for an almost last minute travel, yes those full Y fare and DL doesn't even move (kick/bump) someone out of an aisle/window seat for him. I don't think his company use DL that much since and DL doesn't care.
@ Ryan
“Status is VERY expensive. If you want to be loyal to one airline, you cannot price shop.”
Maybe. I travel so much for work that I qualify for OWE status within 2, 3 or 4 months of the year starting. Avios are too tiresome to have any practical benefit for me, so there is literally no incentive for me to stick to oneworld (or one airline) for the rest of the year. Next...
@ Ryan
“Status is VERY expensive. If you want to be loyal to one airline, you cannot price shop.”
Maybe. I travel so much for work that I qualify for OWE status within 2, 3 or 4 months of the year starting. Avios are too tiresome to have any practical benefit for me, so there is literally no incentive for me to stick to oneworld (or one airline) for the rest of the year. Next week I’ve got a quick trip to Montreal from the UK - and Air Canada has that business. It’s a nicer product than BA, and, for once, AC’s J fares were massively less than BA’s.
Where qualifying for status is marginal, people will likely stick to one airline; where, like me, your employer is spending gazillions on travel and therefore attaining status is near-automatic, there’s not much incentive for loyalty.
I have seen no figures about the actual value of FF programmes to airlines, other than avgeek assertions that they are profitable and make billions. I’m much more sceptical.
Retrofitted seats will be B/E Super Diamonds.
AA survived for decades on loyalty from business travelers, generated almost entirely with an excellent frequent flyer program. Since the US takeover, they've largely destroyed the value of AAdvantage for award redemptions by flooding the market with credit card miles, raising the price of redemptions, and dramatically reducing award inventory. In the last year US/AA has taken its axe to the main benefit of elite status, reducing the number of premium seats and offering discounted...
AA survived for decades on loyalty from business travelers, generated almost entirely with an excellent frequent flyer program. Since the US takeover, they've largely destroyed the value of AAdvantage for award redemptions by flooding the market with credit card miles, raising the price of redemptions, and dramatically reducing award inventory. In the last year US/AA has taken its axe to the main benefit of elite status, reducing the number of premium seats and offering discounted premium fares (that unfortunately most business travelers can't use due to corporate limitations on paid premium travel) so that upgrades are becoming difficult. The "bone" they throw their most frequent customers now is main cabin extra/premium economy. I don't think it will be successful and in the short term it will hurt them in markets where they have a lot of competition, like international routes, where non-US carriers do a better job and frequent business travelers no longer have much incentive to be loyal. In the long term, US/AA will struggle to get that customer loyalty back when the economy takes a downswing and passenger traffic drops off, as it always has and always will in the very cyclical airline business. By then, of course, the current management will be gone and it will the problem for the next management team.
Just posted this on FT too, but pretty sure this is coming at the expense of the # of MCE rows as well. I don't think they can stuff four rows of PE into the current J mini cabin. The Y seat seems to indicate something has changed too.
Does anyone know what percentage of long haul J class seats are being purchased and/or what percentage are awards and upgrades?
Personally, I am all for it. Upgrades and awards are are not sound business practices. The ordinary consumer cannot compete with the business owner who can charge hundreds of thousands of dollars each month and earn miles.
What’s needed are reasonable business class fares for those who wish to purchase them.
Dan = its sustainable. There are no "free" seats. the airlines sell their miles. They make billions off those business class cabins, even if their are some "free" giveaways due to miles and status.
Status is VERY expensive. If you want to be loyal to one airline, you cannot price shop.
The airlines are telling you... DONT bother with status....shop by price. Its all a bait and switch operation. Its hard to fathom...
Dan = its sustainable. There are no "free" seats. the airlines sell their miles. They make billions off those business class cabins, even if their are some "free" giveaways due to miles and status.
Status is VERY expensive. If you want to be loyal to one airline, you cannot price shop.
The airlines are telling you... DONT bother with status....shop by price. Its all a bait and switch operation. Its hard to fathom business making billions should cut their premium services and send their elite members price shopping
Cathay already only allows upgrade to premium economy from economy where it is available, which is most long-haul flights. Of course that is the direction they are going in. Agree United is much more attractive for chances of an upgrade.
Crew rest is too small to 'relax' hell yeah, all hail the Union.
Now for the issue of 20J
PAX: WTF we need more J for UG and awards.
Doug: STFU homies, I was trying keep your royal 28 seats by giving peasants a 29 pitch with the cattles. But NOOOO, you royal homies gotta defend the cattles.
PAX: I will NEVER fly AA again. Even Spirit is better.
Doug: Yeah,...
Crew rest is too small to 'relax' hell yeah, all hail the Union.
Now for the issue of 20J
PAX: WTF we need more J for UG and awards.
Doug: STFU homies, I was trying keep your royal 28 seats by giving peasants a 29 pitch with the cattles. But NOOOO, you royal homies gotta defend the cattles.
PAX: I will NEVER fly AA again. Even Spirit is better.
Doug: Yeah, go away. Spirit and Frontier will always take your $$$$$$$. And remember, I wrecked US Airways. AA is gonna be the new Spirit airlines. You'll be back before you even know it.
Less J seats = reduced offer.
Reduced offer @ constant/increasing level of demand = Higher prices.
Higher prices = Higher margins => More money.
In addition to that, they'll be shifting an number of Y passengers to Y+, that are interested in booking something superior to Y but aren't quite ready to pay the fare difference to J. The reduced award availability is just the icing on the cake.
Mind you, a...
Less J seats = reduced offer.
Reduced offer @ constant/increasing level of demand = Higher prices.
Higher prices = Higher margins => More money.
In addition to that, they'll be shifting an number of Y passengers to Y+, that are interested in booking something superior to Y but aren't quite ready to pay the fare difference to J. The reduced award availability is just the icing on the cake.
Mind you, a smaller J cabin isn't necessarily bad. I dislike large J cabins. LH has a tendency to have huge J cabins (some reaching nearly 100 seats) and service can suffer...
Totally driven by yield management for the route and aircraft utilization. AA is not worried about your inability to upgrade. You want you buy.
Ben, could you provide some more insight into what AA is thinking. I thought airlines historically made most profits from business class travelers....?
Is that no longer true as they are getting better at segmenting the market with products like premium economy and the large number of ancillary fees?
I guess one trend led by Delta but now seemingly being followed by AA is they want to increase the percentage of people paying for a...
Ben, could you provide some more insight into what AA is thinking. I thought airlines historically made most profits from business class travelers....?
Is that no longer true as they are getting better at segmenting the market with products like premium economy and the large number of ancillary fees?
I guess one trend led by Delta but now seemingly being followed by AA is they want to increase the percentage of people paying for a premium seat and reducing the percentage upgrading into it.....Reducing the total number of premium seats per plane is one way to do that.
@Rob your totally wrong on this UA fits the same amount of 1-2-1 Polaris seats as 2-2-2 seats on the 777 in the same space. The seating capacity has nothing to do with configuration and everything to do with management choices. American has been poorly run for the past two years poor RASM(revenue per available seat mile) and poor outlook compared to peers. Just look at its stock delta and united have 11-12x P/E valuation...
@Rob your totally wrong on this UA fits the same amount of 1-2-1 Polaris seats as 2-2-2 seats on the 777 in the same space. The seating capacity has nothing to do with configuration and everything to do with management choices. American has been poorly run for the past two years poor RASM(revenue per available seat mile) and poor outlook compared to peers. Just look at its stock delta and united have 11-12x P/E valuation while American only has 9x P/E, people don’t believe in American management
Sorry guys, the move makes business sense.
It's not just that AA would rather sell business seats than give away for free. When business class is expected to run out, out they sell a lot of the seats at higher prices than when people think there is space for upgrades.
I’m glad you mentioned that UA & AM both has 2-2-2 in business class, hence the reason for the extra seats.
This is a sad comment about AA's ability to sell business class seats. Rather than downsize the cabin, they ought to be addressing their inability to sell the seats.
Saver award seats are never available on AA anyway so this is no loss other than to upgrades.
While I’ve enjoyed this hobby as much as anybody, I could never figure out how this stuff is sustainable in the long run. Even in the short run, if mileage seats are what would otherwise be breakage or shrink, that means there’s either too much supply or they’re pricing the product wrong.
It's mental that the pilots need the crew rest area AND a J class seat, especially as the pilot crew rest area has a comfy seat enabled with IFE in addition to the two bunks.
At BA the pilots are entitled to the same rest seat on aircraft where the crew rest compartment doesn't contain a seat (ie some 777's and the 747). But on those aircraft with a crew rest compartment that does contain...
It's mental that the pilots need the crew rest area AND a J class seat, especially as the pilot crew rest area has a comfy seat enabled with IFE in addition to the two bunks.
At BA the pilots are entitled to the same rest seat on aircraft where the crew rest compartment doesn't contain a seat (ie some 777's and the 747). But on those aircraft with a crew rest compartment that does contain a seat that is IFE equipped that is considered as their rest seat.
A J class seat taken out of the inventory on every three man tech crew is a LOT of lost revenue. It's for exactly this reason that on newer aircraft (such as the 787) the flight crew rest area has a self contained rest seat.
I expect a 30% reduction in J seats will make upgrades and awards all but impossible for this aircraft -- like the 8F A319's. I wonder if there's a point where even current AA management will decide they've hacked status benefits too far? As it stands, Plat, Plat Pro, and Exec Plat are effectively the same status. It's just a matter of how close you are to the top of the upgrade list when your board and take your coach seat.
Stupid move by AA. Doug Parker is an idiot.
From a business perspective AA is run by a circus clown. He’s a moron. He even claimed the industry would never recess again. What kind of idiot says something like that. He also has multiple DUIs, can’t even get a $10 job at his company with his record. None of the airlines are run by good people , but ATL east United still has massive business class cabins .... for now.
Can’t really be to upset with this. If AA consistently sold all 27 J seats they would chop Econ for Premium Econ. From a business perspective this is entirely sensible.
Looks like United is going to win over a lot of top tier elites ... they already won me over. United topples , crushes, destroys , obliterates American
Any idea if business class will remain Zodiac or go to Super Diamond?
Surprising about blocking a seat for pilot rest. The 787 flight crew rest has an old style business/first recliner that is actually quite comfortable that airlines can fit with IFE. Wonder if AA didn't install the IFE and as such has to block a cabin seat
Stopped relying or hoping for upgrades long time ago. Buy what I want on the airline I want, but I do price compare.
In the case of AA, either order special meal or skip it altogether.
It's interesting that the 788 will have 28 PEY seats while the 332, 772 and 789 have 21 PEY seats.
Dont think AA uses biz seats for crew rest on any 787s. The aircraft have pair of bunks up in the crown above the center overhead bins.
@ james -- They do have crew rests, but the contract requires that pilots have a place to rest and relax, and the bunks on the 787 are apparently too small to qualify for "relaxing." So they have to block a business seat as well for them, so they have somewhere to be when they're not sleeping. At least that's what the policy used to be.
I thought the 787 had an upstairs crew rest area which reduces the overhead bin space in the front of the plane. Do pilots really use a business class seat for rest?
Did they change the business class seats from the zodiac ones to the new reverse herringbone ones found on the 787-9?
@ Jake -- They haven't, and don't plan to, as far as I know.
Really surprised they are dropping it down so low although the layout of the plane really comes into play. Hard to have a one row mini cabin. I am yet to see PE full of anything but non revs. Still scratching my head with how gung-ho all the airlines are out on it.
"As you can see, United is on the lower end there, especially when one seat is used as a pilot crew rest."
It is supposed to be American.
@ BX @ DN -- My mistake, fixed, thanks!
Quick note: in your second-to-last paragraph, you state that United is on the lower end. Don't you mean AA with only 20 seats?
oops... my own mistake
should have said Honors, High Pass, Pass, Marginal Pass, Fail. (5 levels)
in essence what has happened is that we've simply changed nomenclature
in years past there was
First, Business, and Economy.
now we have
Business, Premium Economy, and Economy.
Reminds me of when my school decided to do away with grades
instead of A,B,C,D,F. (5 levels)
we had Honors, High Pass, Pass, Marginal Pass. (5 levels)
also: you have a typo: "As you can see, United is on the lower end there,...
in essence what has happened is that we've simply changed nomenclature
in years past there was
First, Business, and Economy.
now we have
Business, Premium Economy, and Economy.
Reminds me of when my school decided to do away with grades
instead of A,B,C,D,F. (5 levels)
we had Honors, High Pass, Pass, Marginal Pass. (5 levels)
also: you have a typo: "As you can see, United is on the lower end there, especially when one seat is used as a pilot crew rest."
should be American.