United Airlines have unveiled initiatives to improve network connectivity and revenue management, broaden product segmentation and introduce additional customer enhancements expected to generate US$4.8 billion in earnings improvement by 2020.
One of the carrier’s first moves was to create a new Basic Economy Fare, offering customers the option of paying the lowest fares to their destinations, while still receiving the same standard economy experience, including food, beverage, Wi-Fi and personal device entertainment – but a few key differences.
One major difference is the ban on overhead baggage, instead Basic Economy customers will only be allowed to bring one carry-on that must fit under their seat.
Basic Economy customers will also only be assigned seats on the day of departure, and be assigned to boarding group five.
According to United, the new offering provides the added benefit for customers and employees of simplifying the boarding process, as fewer customers will bring overhead bags on board.
“By offering low fares while also offering the experience of traveling on our outstanding network, with a variety of onboard amenities and great customer service, we are giving our customers an additional travel option from what United offers today,” Executive vice president and chief commercial officer, Julia Haywood, said.
United will continue to offer economy, Economy Plus and domestic first class, and it remains on track to introduce its reimagined international premium travel experience, United Polaris, on December 1. The company is evaluating a new premium economy experience for domestic and international markets.
The company also announced plans to fully optimise its network potential by continuing to leverage its leading international position while strengthening its domestic network and further improving both schedules and product in top business markets.
The company will continue rigorous cost management program and expects 2017 unit costs to grow 3.5% to 4.5% excluding fuel. The company expects 2018-2020 unit costs excluding fuel to grow less than 1% per year due in part to its plan to remove $700 million of costs by 2020, as compared to 2015 levels.