Tuesday, October 30, 2012

Future United: IAH (Premier Upgrade edition)

Back in August I opined on the future of United Airlines at IAH and what changes were coming from a capacity standpoint.  As more and more flights formerly serviced by former Continental's relatively new(ish) 737 fleet get moved away to Denver and Chicago the A319's that are going to be a mainstay at IAH are starting to show up on an increasing number of routes.

Besides diminished capacity, what exactly does this mean?

For one, the hard product is going to be much less than it was in the 738's and 739's.  The A319 is not the same plane from a comfort standpoint (in my opinion) as Boeing's workhorse.

From a MileagePlus Premier standpoint it's going to mean significantly reduced upgrade capacity.

Here are a few screenshots from SeatGuru.com to illustrate:

Previous service:

737-900 v.1

737-900 v.2
 Future State:

As you can see, in many cases domestic flights out of IAH will be losing 2-3 rows of BusinessFirst seating, making complimentary upgrades for mid to lower tier (silver, gold, and in many cases Platinum) Premier passengers a thing of the past.  What will increase is the opportunity for economy plus upgrades, but that's a severe step down in the value of Premier status.

The decline is even more pronounced when you realize that, in many cases, the "current" 737 service is already a downsize, on some routes, from 757 service:

Taking into account this scenario most United Premier passengers, flying a domestic leg out of IAH, are facing a 66% reduction in the possibility that a complimentary BusinessFirst upgrade is going greet them at the gate.  This is a HUGE reduction in value for mid-to-low level United Mileage Plus customers flying out of IAH. 

Now, before the conspiracy theorists out there start running with this, I do NOT think this is a situation where United is trying to "get" Houston.  While Houston travellers (especially those still loyal to United) are going to see a reduction in their value, I really believe this is more of the continuing repositioning of the airline toward Chicago and Denver, and away from a suddenly not-very-profitable IAH.  And yes, some (not all) of this has to do with the projected inclusion of Southwest into the Latin American market from HOU.  A large piece is also due to the money-saving deal between DIA and United Airlines with a promise from UA to increase capacity there.  Not to mention the fact that Chicago is also looking for an increased share of the pie, and both cities have indicated a willingness to work with United in order to receive this.

Houston, meanwhile, has thrown it's hat squarely into SWA's ring and is hoping that the increased capacity at HOU will more than offset the coming decreases at IAH.  After getting a tongue lashing from City Council on the decision to keep United's corporate HQ in Chicago (where, again, the city had agreed to tax abatements to keep them there) and a laundry list of customer complaints (on slights real and imagined) United has obviously decided to de-emphasize it's Houston presence for the long term.

As I stated before, over time it's my expectation that IAH continues to be a key hub in the United system, but they're slowly crawling toward the moment in time where they're no longer the biggest, or most important hub.  Unfortunately the first people to feel the pinch are going to be the United Premier flyers out of IAH.

That's too bad.

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