Dan Reed writes in Forbes that the decline in international 3-cabin first class amongst US airlines is the result of low price competition from the big Gulf airlines.
The Gulf carriers are not dramatic low price/low frills discount carriers along the lines of U.S. low price carriers like Spirit, Allegiant or even Southwest. In fact all three get extremely high marks for the quality of their inflight services. But they consciously are keeping downward pressure on the price of premium class international fares.
…The new United now offers upgraded “United Global First” service on some really long, high-demand international flights but only “United BusinessFirst,” on other international flights. Similarly Delta has introduced what it calls DeltaOne as a new-and-improved version of its former hybrid premium product called “BusinessElite.” But neither carriers offers what can rightly be called a conventional first class seating product.
In fact, among the big U.S. carriers, only American retains a conventional first class section on its international flights. And in light of the growing price competition for international premium class travelers one has to wonder how long it can afford to retain that expensive form of differentiation? The question takes on even more weight in light of the fact that American now is being run by the top managers of US Airways, who engineered the deal that merged the two carriers in late 2013. US Airways never had much in the way of international service, but the few international flights they offered only a hybrid premium section called “Envoy Class.”
US airlines do not offer a true competitive international first class because
- Very few US markets support it, the way that some European and Asian hubs do. US businesses don’t pay for it. Hollywood studio contracts now allow for business class. There’s simply a changed landscape in the US.
- US airlines aren’t capable of delivering the kind of quality international first class that foreign competitors do. Even with comparable hard product (which neither United nor American has had in 15 years), they cannot deliver the same level of service their competitors do. And they haven’t offered comparable food and amenities in 20 years.
United Global First Seat
United first class
Remember that Delta killed their international first class decades ago. Contra the suggestion in Reed’s piece, US Airways eliminated their 3-cabin international first class service prior to being acquired by America West.
United has a first class seat on legacy United 777s and 747s. But it’s a 10-year old seat that wasn’t state of the art when it was installed, with food/service/amenities that are closer to business class. That’s been the case since before the ME3 started growing rapidly to the US.
He writes that “among the big U.S. carriers, only American retains a conventional first class section on its international flights” but United has just as much a first class as American does, albeit one they’ve planned to eliminate.
Indeed, American’s plan for the past several years has been to eliminate first class on all but their 777-300ER aircraft. They only have so many first class seats left because the 777-200 reconfiguration project has been so slow (Zodiac seat delays).
American says they do sell their international first class seats on Dallas – Hong Kong. One problem over the past year was they were running aircraft with a first class cabin to Sao Paulo … something they’ve rectified with the economy cratering in Brazil.
The US-Hong Kong market is high revenue
It’s the high quality first class of Emirates and Etihad that creates a halo effect over the rest of the product and makes us think they’re fantastic. Remember that Emirates offers angled business class seats (!) on all but their A380s, and 10-abreast seating coach on their 777s (like American’s new product but unlike United so far or Delta).
Emirates A380 First Class Shower
American, Delta, and United are nearly fully flat in business on international routes (sans those still-unreconfigured planes at American….). Their Middle East competitors are not. At American it’s lie flat, all aisle access.
Indeed, while passengers used to avoid flying American in favor of BA to London, American now offers the far better business class product.
Discounting by Delta in business class hardly signals the end of international first class. That’s been a changing market segment for a long time. Lufthansa has downsized the portion of their fleet with first. BA has slightly. Cathay Pacific runs long haul flights without first, and has only 6 first class seats on the planes that offer it. It’s a niche product throughout the world, though still a profitable one in some places, airlines have just gotten better at making money by deploying the right products and right-sized products in the right markets.
Cathay Pacific First Class
There’s nothing nefarious there. US airlines shouldn’t be trying to deliver a product that their customers don’t buy in most markets and that they aren’t capable of delivering. They’re making money hand over fist, but competition is heating up as a result of low fuel prices and a tough revenue environment.
Like Maslow said, let’s not try to fit every aviation development into the US3 vs ME3 box. (“I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.”)