I think it is smart position to say that no decision is needed unless that decision can directly attribute to significant cost reductions. For example, what DL did to retire all 777's is tangible to reduce complexity in the company.
If UA feels they won't retire ALL of the same fleet type is there really any reason to make that decision now? Not really, if UA is going to keep any sub-fleet then they should wait to make any decision.
I do wonder, what the costs are for storage? I now the largest cost is any lease or payments for the aircraft themselves, if present, but I wonder if the cost of putting in storage, maintaining them in storage and then returning to service is significant in the decisions or is it a rounding error in the decision process?.
We are not talking about retiring any particular fleet type we are talking about reducing the number of premium seats on the 76L subfleet.
As I stated I agree premium or business travel will not return until there is an effective therapeutic and/or a vaccine. The question or concern raised was was does UA have to many premium seats on our premium heavy 76Ls and quite frankly across our entire widebody fleet? Without having a clear picture of how and when business travel will recover an argument could be made in favor of removing some premium seats and adding more seats in coach. However the wait and see approach also has its merits because UA does not have a clear picture. Removing business class seats and adding coach seats may seem like a no brainer now, but is it the right decision long term? Again in my opinion it all comes down to finances, does UA have the liquidity to wait for corporate travel to resume? Looking at leisure markets the recovery has begun, however business or corporate travel is still on hold and probably will remain on hold until we have an effective vaccine.
The best example I can think of is UA's pre-Covid EWR-LHR route. Pre-COVID UA made it clear their focus on this route was premium traffic with 5x daily flights UA had 230 lie flat Polaris seats in the air daily on our EWR-LHR route. Before UA switched this route over to all 76Ls we operated 4x daily 763s and 1x daily 764 for a total of 937 seats in coach
. After the switch was made UA daily overall coach availability drop down to 605 seats on 5x daily 76Ls. However we went from 159 business class seats to 230 lie flat Polaris seats. In a post COVID world what Kirby and his team have to figure out is should UA reverse coarse? Should UA now (meaning in 2021) target leisure travelers in this market? Should UA begin increasing the number of seats in coach to prepare for when Europe is fully reopen (which should be in time for the IATA summer 2021 season), or should UA stay the course and wait for a clearer picture on corporate travel recovery?
The conundrum is this once UA pulls business class seats off the aircraft they will not put them back on should corporate travel recover at a faster than expected rate. Whatever decision UA makes, whichever way they decide to go UA is stuck with that decision until a all new Polaris business class seat debuts
, which probably won't happened in my opinion until 2030 at the earliest. I don't see UA pulling business class seats off now and replacing them with additional coach seats only to reverse course put the business class seats back on in 2-4 years time should corporate travel recover more robustly than we think.
My opinion is UA should wait and see but do we have enough liquidity to take the wait and see approach. Neither decision is not without risk, either decision could end up costing UA a lot of money. Until there is a vaccine or a therapeutic any decision is more like a shot in the dark without night vision goggles.