United-Continental "would strongly prefer" to upgrade the economy class product on its Boeing 747-400 fleet by the time its first Airbus A350 XWB aircraft arrives in 2016, United-Continental holdings chief executive Jeff Smisek says in Sydney.

"The back of the product on the 747 that United flies is not an acceptable level of product. I know that," Smisek says. "But United didn't have the money to invest in that product. Well it does now."

The 747 upgrade and other product enhancements will be made possible by the $1.2 billion annual savings, mostly in revenue, from the merger of Continental Airlines and United Airlines, Smisek says.

"We can re-allocate aircraft to a much greater depth and drive significant additional revenue," he says. "You have to invest. There is a price for not investing: you lose people."

Earlier this year Delta Air Lines announced plans to upgrade its business and economy products on its fleet of 16 747-400 aircraft. Retrofits will begin next summer and continue through 2012.

Smisek declines to specify a more detailed timeframe or what the product enhancements will entail.

United has 25 747-400 aircraft in service, according to Flightglobal's ACAS database.

Source: Air Transport Intelligence news