Following the lead being set by the low-cost competition, the US majors are reconsidering their economy-class products, focusing in particular on seat pitch

While carriers have traditionally trained much of their time, effort and expense on the premium cabin, a new US battleground is emerging in economy class. Small wonder. A growing number of business travellers, spurred by falling corporate travel budgets and the rise of low-cost alternatives to the network majors, have been forsaking business class for the economy cabin. And the outlook is for more travel cutbacks.

IATA's latest corporate air travel survey, released in November, found that one-third of all business travellers had used a low-cost airline in the past 12 months, mainly to save costs, and 37% had used video conferencing to save travel time and money. The US National Business Travel Association says it expects corporations to direct more employee travel next year to low-fare carriers like JetBlue Airways, Frontier and Southwest Airlines. The trend could accelerate with the new penalties major US carriers have put on non-refundable tickets, such as a charge of $100-150 for standing by for an earlier flight.

Low-cost attractions

Travellers who now find themselves in the economy cabin are finding both the lower fares their companies seek and, in many cases, surprisingly good amenities on low-fare carriers. Among those setting the pace is JetBlue, just approaching its third anniversary in the air.

Although JetBlue offers just snacks instead of airline meals even on cross-country flights, it has equipped its new, single-class Airbus A320 fleet with leather seats and offers passengers free, live satellite television programming. It also has 32in (81cm) of seat pitch, against the 31in generally offered on comparable aircraft operated by United and Northwest Airlines. Frontier's new A319 aircraft go further with 33in pitch and Southwest, with its new Boeing 737-700s takes the average pitch a fraction higher, including its unique backward-facing seats.

Last year, JetBlue acquired LiveTV, the provider of the satellite TV programming it uses, when the opportunity arose because the service has been "incredibly important to our customers", says Tom Anderson, JetBlue vice-president of technical operations and aircraft. He says 90% of JetBlue passengers use the system, and it consistently ranks number two or three in surveys asking why people fly the carrier, alongside low fares and customer service.

JetBlue could also provide LiveTV service to network carriers but has not yet been asked. "If a major wants a fleet-wide agreement, we're all ears," he says. "If it wants to do a subset of fleet to attack JetBlue, we're not interested."

Anderson says there are "quite a lot of opportunities" outside the USA and there have been informal discussions with a variety of airlines, although there are no takers to date.

So far, the only other carrier offering passengers live satellite television programming is another low-fare start-up, Denver-based Frontier. It has just begun to offer its passengers DIRECTV programming on its new Airbus A319 fleet, which will be fully equipped by the spring. Frontier plans to charge passengers $5 for the programming, expecting the fees and advertising revenue to offset operating costs.

JetBlue has used the LiveTV infrastructure for its cabin surveillance system and Anderson says the open standards of the system offer "nearly endless options", including Internet connectivity, with some system modifications.

"The question is what functionality do we want, and what is the business case for additional functionality?" says Anderson. "We've been focused on doing things that are beneficial to a high number of customers." Major carriers may try to pull the high-yield business traveller into a premium cabin by offering connectivity, he says, "but we're not playing that game".

Most major US airlines rely on movies shown on screens and audio programming, with some prepared news content, in economy sections for domestic flights. Recently, most carriers have dropped the $5 charge for movies on longer-haul domestic flights, offering passengers headsets they can use and take home for a $2 charge and allowing them to bring their own.

The change is saving American Airlines $6 million a year because headsets no longer need to be sorted and refurbished.

Another cost saving effort from American has involved the suspension of telephone service from domestic aircraft. Most aircraft were fitted with one phone for every three seats, but with the advent and increasing use of mobile phones, there was substantial decline in their usage. Average use was less than three calls a day per aircraft, says American. The service ended last year and the removal of the telephones will reduce weight.

But while American and others are eliminating telephones, Frontier is taking part in a new trial of an airborne cellular telephone system by AirCell. The system provides a state-of-the-art, onboard air-to-ground telephone service using wireless handsets that can be used throughout the aircraft. AirCell, the only cellular technology approved by the FAA and Federal Communications Commission, is being installed in an Airbus A319 and will be evaluated for fleet-wide implementation.

The most important economy seating initiative in the USA in recent years has been the "More Room in Coach" programme from American Airlines. Under this, the carrier pulled out more than 7,200 seats from its domestic and international aircraft, representing 6.4% of capacity, to provide greater legroom for economy passengers. Seat pitch was increased from 31-32in to predominantly 33-35in throughout.

Passenger surveys and anecdotal evidence indicate the change has been well received. Skytrax Research, a UK-based consultancy that monitors product quality for the airline and business travel markets, has recommended American for transatlantic flights because of its new economy layout. In fact, American is virtually alone among the transatlantic carriers rated by Skytrax in winning four out of a possible five stars for its long-haul economy cabin - ahead of British Airways.

The American seating programme was in contrast to United's Economy Plus programme which extended legroom by up to 5in but only for a limited number of travellers. United designated the first six to 11 rows of the economy cabin, depending on the fleet type, for Economy Plus on both domestic and many international flights.

The programme is designed primarily for United's most frequent flyers or those travelling on a full-fare economy ticket for whom an upgrade is not available. Depending on the aircraft, the legroom increases from 31-32in of pitch to 34-36in.

The long and the broad

No other US carrier has matched the American and United moves. Continental Airlines says it weighed the question of more legroom, but its customers have indicated they would rather have an empty middle seat next to them than more legroom.

Continental's view is supported by data collected by Boeing. Klaus Brauer, Boeing's project director for passenger revenue development, says a key finding was that passengers wanted additional "space", with width and length essentially equal. An empty adjacent seat was considered crucial, which is why there is a preference for three-three-three seating on widebodies rather than a two-five-two seating arrangement, he says.

The poor economic condition of most big US carriers has led to the deferral of any new seat programmes or even major refurbishments that might have been in the works. This development is only too apparent to seat-makers such as B/E Aerospace, which has responded to the fall-off in demand by reducing jobs and revenue expectations.

Another change in the economy cabins of US carriers is the reinstatement of a charge for alcoholic drinks on international flights. American, Delta and Continental are among the carriers that have been phasing in a $4 charge for wine, beer or spirits in the main cabin. Ostensibly being done "to standardise charges" with domestic policy, carrier officials admit privately that the move is to raise revenue. An unexpected benefit has been an apparent reduction in air rage incidents due to drunkenness.

With revenues remaining under constant pressure and corporations showing few signs of revising their travel budgets, these moves are perhaps just the first shots in a contest to differentiate service at the back end of the aircraft too. n


Source: Airline Business