In response to Baw and Britair, I think it would probably not be advisable for US network carriers to replace their current domestic First class with a European-style business class for the following reasons:
1. US Business passengers are used to, and expect, high comfort 2+2 seating. They are also used to service that is marginally better than that in coach but not awe-inspiring either.
2. The distances involved in US domestic journeys are longer than those on intra-European flights, I would guess the average stage length is twice as long. I imagine bearing the average stage length in mind, the average US business traveler would greatly prefer the enhanced comfort of typical American domestic first class products to the enhanced service of the standard European business class.
3. Transitioning from the current product to a European style one would be expensive, and a risk that I don't think any US airline wants to take at the moment.
I would guess that overall the revenue generated by US domestic first class is on a par with that of intra-European business class, with the US domestic first generating more revenue with fewer seats. I would also guess that having a large US-style domestic first cabin does actually offer more revenue-generating potential than the European-style business class, in the unlikely event that every seat sells out at the high fares charged, but then again having a large first class cabin would also potentially detract from coach revenue.
I think what Continental is doing is quite possibly the best course of action. Reduce the domestic First Class cabins to what has a chance of selling on a given flight, yet maintain free upgrades so that in the event that a seat doesn't sell it will be available to frequent flyers at no charge. However, considering the excellence of Continental's domestic first class product compared to that of say, Delta or United, the likelihood of actually having to offer free upgrades is diminished.
This reduction in First Class on the 737-500 may be unpopular with business travelers, but it's a great business move overall. Considering that this reduction is only being applied to the smallest aircraft in the CO
mainline fleet, one which tends to operate shorter stage lengths where the comforts of business class are less necessary, I don't think the overall effect of this adjustment will have any profoundly negative effect on Continental at all. Some frequent flyers might be a little bit peeved, but I seriously doubt this would be enough to push them over the edge and cause them to switch their allegiance to another carrier (especially when you factor in the extremely attractive nature of the new CO
Basically, to sum it up, I think what CO
is doing here is reducing overcapacity in the First Class cabin on an aircraft that operates routes where the added comfort of First Class is less relevant. I predict this will result in improved revenues for the airline.