The Rebirth of the US Domestic Carriers
As 2016 comes to a close, I would like to reflect on some of the bigger changes we have seen with the domestic carriers this year as well as a preview on a few changes upcoming in 2017.
The most significant change with the US carriers has been a positive trend upgrading service levels to better compete with the international carriers. The US carriers are once again profitable and travelers are experiencing the benefits with enhanced amenities from upgraded Wi-Fi service, enhanced snacks, more comfort and overall improved inflight cabin service. The domestic carriers have all made financial commitments to improve the TSA process by investing in more lanes to move detained travelers to a different lane to keep the lines moving. Another historical change has been the return of US carriers flying to Cuba which started in December 2016.
In 2017, as their profitability continues to increase, the focus on service continues. The big 3, American, Delta and United, are all fighting to win the #1 spot for on time performance, baggage handling and inflight onboard services. Delta is currently leading the pact on all three categories but, United and American are quickly gaining.
Below, I’ll explain some of the enhancements that were introduced in 2016.
Delta introduced the new Comfort + cabin. Customers purchasing Delta Comfort+ will enjoy an upgraded experience including a seat toward the front of the plane with extra legroom, access to Sky Priority® boarding, dedicated overhead bin space, and superior snacks on longer flights. Delta introduced free inflight entertainment in July of 2016 and in Q4 Delta deployed Radio Frequency Identification (RFID) technology for baggage handling in the US, providing customers with improved real-time tracking of luggage throughout the travel experience. With this new technology, scanners use radio waves to capture highly accurate and consistent data stored on an RFID chip embedded in the luggage tag, driving superior tracking and increased transparency. With RFID, customers will see their bags on and off the aircraft during their journey via push notifications to the Fly Delta mobile app.
Delta has also enhanced the airport experience by bringing out food carts and toys in the boarding area to entertain travelers during flight delays while they wait. Delta Sky Clubs have upgraded their complimentary food service and many of the clubs have completed renovations with many still in progress.
American Airlines announced in 2016 that they would be reinventing their lounges with complete makeovers. This November, American introduced their new premium economy class of service on their 787-9 Dreamliner between Dallas and Madrid and between Dallas and Sao Paulo with expansion plans as new equipment arrives. Premium Economy offers leather seats with 38 inches of leg room and foot rests (more room than in Main Cabin), international Wi-Fi and noise reducing headphones for use inflight, personal on-demand entertainment systems with larger 12 inch touchscreens, amenity kits and an enhanced meal service with complimentary wine, beer and spirits. Travelers can also check one bag free of charge when they purchase premium economy. In flight American expanded their complimentary entertainment offerings on domestic flights with in-seat entertainment. Travelers can choose up to 40 movies, 60 TV shows and more than 300 albums. American also brought back snacks in the main cabin as well as a meal in the main cabin between Dallas and Hawaii. American also partnered with Cole Haan, 3LAB, C.O.Bigelow and Clark’s Botanicals to develop new amenity kits for First Class onboard their transcontinental flights between New York and Los Angeles; New York and San Francisco and Miami and Los Angeles. They also introduced new cotton pajamas for international First Class passengers.
United Airlines dedicated 2016 to upgrading their services. On the ground, they have been upgrading their airport lounges by upgrading the food and beverage services, complete refurbishing and complimentary Wi-Fi. United started its commitment to replace all 50 seat regional jets with larger aircraft featuring first class, expanded Economy Plus and Wi-Fi. United also brought back snacks in the main cabin serving Stroopwafels in the morning or an Asian-style snack mix or zesty ranch pretzel sticks, corn sticks and ranch soy nuts in the afternoon flights as well as upgraded their coffee serving Illy coffee. By mid-2016, United had Wi-Fi on 100% of their mainline aircraft and completed their regional jet service at the end of Q3 2016. In Q4 United introduced IPASS offering unlimited monthly subscriptions offering customers seamless Wi-Fi experience as they move from terminal to aircraft. The biggest update for United was the introduction of their new Polaris service, their new international business class that began in December of 2016. Polaris includes gourmet meal service, Saks Fifth Avenue bedding, Cowshed amenity kits, and the addition of a Bloody Mary cart and wine flights. December 1st marked the opening of the first United Polaris Lounge at Chicago O’Hare (ORD) bringing passengers the ultimate in pre-flight relaxation.
So much has happened in 2016 and yet there are more changes coming in 2017.
In 2017, United and American will be rolling out their version of Basic Economy fares. United’s basic economy will be for sale in late January for flights beginning in the spring. Like Delta, United will not allow seat assignments, no changes will be allowed to the reservation, upgrades are not allowed and travelers can’t accrue miles to reach elite levels. But, in addition to Delta, United Basic Economy fares will not allow travelers to carry on a bag that does not fit under the seat with the exception of their elite members. Non-elite members will board in group 5. American has not announced their implementation dates for their version of basic economy other than sometime in 2017.
Nine new United Polaris lounges are slated to open in 2017, including Houston, Los Angeles, New York/Newark, San Francisco, Washington Dulles, Hong Kong, London Heathrow and Tokyo Narita. The U.S. locations will open in 2017, and international locations opening in 2018. The new United Polaris business class seat will first be introduced on the 777-300ER, and will be rolling out throughout the year.
Delta has just announced new snacks in 2017. Pretzels will be replaced by larger offerings of Snyder’s of Hanover® pretzels, Squirrel Brand Honey Roasted peanuts and NatureBox Apple Cinnamon Yogurt Bars. To everyone’s delight, Biscoff cookies will remain in service. The complimentary snacks will be available in the Main Cabin on flights over 250 miles. Customers on shorter flights within North America – from 251 to 599 miles – will now receive a choice of Biscoff cookies or Snyder’s of Hanover® pretzels, whereas customers were only offered one choice previously. Flights over 600 miles will now offer four choices, instead of three. The most significant change for Delta in 2017 will be introducing suites with doors in international business class. This will be a phased in approach.
We will also see another merger completed between Virgin America and Alaska Airlines. Initially, there was the fear that fewer carriers would bring fewer options, less service and higher fares when in fact, it has raised the level of service and the airfares have been lower for all of 2016. Airlines have been increasing their profitability on ancillary services such as paid seats with more legroom and amenities, baggage fees, Wi-Fi fees as well as food and beverage for purchase. Low gas prices have also been a contributing factor.
The domestic carriers will continue to enhance their alliance partners to offer coverage globally as well as continue to upgrade their services to better compete with the “high end” carriers such as Emirates, Qatar, Etihad, Turkish, Singapore and Cathay Pacific.
In my opinion, travelers will continue to benefit from the renaissance of the domestic carriers. Traveling can be a stressful and an unenjoyable experience, but it has been refreshing to see the rebirth of enhanced services. I look forward to more future enhancements to bring more pleasure to our clients and hopefully to make travel fun again!
Vice President, Supplier Relations & Strategic Sourcing