Opulence option returning to the skies

A handful of main-line, traditional carriers are reprising the strategy of configuring airplanes to cater to upscale and business-class passengers, the bread and butter of the industry, by turning commercial jets into more than just sky-bound buses.

“It is the Holy Grail of the airline industry,” said Richard Aboulafia, an aviation industry analyst with the Teal Group in Fairfax, Va.

The idea is to collect a premium fare -- up to $3,500 one way -- for a flight with fewer passengers, better entertainment, laptop connections, higher-quality food and seats that allow comfortable sleep. These amenities are intended to help a business executive make a transcontinental or international flight and arrive ready for a full day of work.

United Airlines, one of the oldest and largest carriers, has adopted this approach on flights from New York’s JFK to both Los Angeles and San Francisco as it tries to stop the flow of business travelers to rival airlines.

Elsewhere, German long-haul carrier Lufthansa and Basel’s Swiss International Airlines have launched premium transatlantic flights.

So far, these airlines are offering less than a dozen of these flights daily, a tiny percentage of domestic air travel and flights into and out of the country.

But if these offerings prove successful, analysts expect other carriers to jump in.

“There has to be a way to take advantage of the premium traveler,” said Aboulafia, “but no one has figured it out. The history has been riddled with failure.”

Regent Air, Legend Air and MGM Grand Air -- all aviation relics from the past -- once tried similar services. These premium-class commercial carriers could not survive the incessant economic turbulence that plagues the nation’s airline industry.

But current carriers are determined to give it a go. Chicago-based United, which is struggling to climb out of bankruptcy, has rebuilt the interiors of 13 Boeing 757s, taking out 70 of the 180 seats, adding leg room, wireless phone connections and power outlets for laptops.

The result is a 110-seat aircraft that offers lie-flat seats for first-class passengers, deep recliners in the business-class section and 34 inches of legroom in the “Economy Plus” cabin.

First- and business-class customers get noise reduction headsets, hand-held DVD players, special cocktails, chocolates and upgraded meals.

One-way fares start at $254 for an Economy Plus seat and run to $2,230 for a first-class ticket on one of the 13 scheduled coast-to-coast flights weekly.

John Tague, the United executive vice president in charge of the service, concedes that in a sky that includes JetBlue and Southwest Airlines, there aren’t many domestic opportunities for such airplanes.

The routes between JFK and LAX and SFO, however, “have a lot of volume and very low prices but nonetheless remain a strong market for true, high-yield premium-class business,” Tague said.

Executives from three industries -- entertainment, investment banking and technology -- are the main customers, Tague said. And what success MGM Grand Air had during its run during the 1990s grew out of the demand by Hollywood for exclusive, first-class treatment.

Tague said United was pleased with the passenger loads on the premium service flights, which began in October and expanded to San Francisco in December. He said a higher percentage of passengers were purchasing “full-revenue” tickets on those flights compared with the same route a year ago, when United was using multiple-class, aging Boeing 767s. He declined to say whether the service was earning the carrier a profit.

The fractious labor relations and uneven customer service that have plagued United on its other routes remain a problem even for the upgraded service, some customers say.

Roberta D’Alois, who has flown the SFO-JFK route three times, said her experience varied widely.

Her first trip, flown in the “Economy Plus” section, could have been in the economy section of any domestic carrier, she said. The next time, D’Alois tried the business cabin and experienced “one of the worst service flights I have ever been on.”

The flight crew was surly. After serving drinks before takeoff -- a premium service standard -- flight attendants failed to collect the cups and other trash.

When D’Alois asked for a DVD player, “they just threw it at me, with the cord wadded up and knotted and then got mad when I asked for help to make it play,” she said.

“It turned out that they had not even given me the adapter it needs to work.”

D’Alois, a loyal United customer, tried the flight again in February, and this time she called it “a pleasure.”

“The flight crew was more engaged, and those business-class seats are a real plus,” she said. “You can sleep.”

Still, D’Alois said she was “underwhelmed” by the food and unimpressed with the selections from United’s onboard DVD library.

Others also have found the service uneven.

Joe Brancatelli, publisher of the Joe Sent Me website for business travelers (biztravelife.com /m/jsm.htm), said the business-class service on these flights was better than any first-class seat on any domestic carrier, including United’s other routes.

Yet service on the major U.S. long-haul carriers has fallen so low that’s not a high hurdle to jump, said Brancatelli, who flies thousands of miles annually evaluating business travel.

And even this upgraded service is not without glitches.

Brancatelli said on a recent flight, United was quick to serve a late-night meal no one wanted after the jet took off from New York. At the other end, the carrier failed to serve a breakfast or even distribute coffee as the aircraft was nearing the West Coast in the early morning.

“These are the kind of small details that really differentiate service,” Brancatelli said.

United, however, says it constantly asks customers about service on the flights and that “the results have been phenomenal,” said Robin Urbanski, a spokeswoman for the airline.

“Any problems are isolated instances,” Urbanski said. “If someone wants coffee on the red eye, all they have to do is hit the call button; otherwise we have found that passengers would rather sleep.”

It’s questionable whether there will be enough demand for domestic premium-class service to make a go of United’s upgraded service, said Jerry Chandler, a contributing editor to Frequent Flyer Magazine.

“United is flying against the wind,” Chandler said. “Corporate boardrooms right now are more attuned to budgets than giving their executives perks and amenities on airplane flights.”

For a transcontinental flight, many executives find that JetBlue has enough seat room for comfort and represents a better value, he said.

Lufthansa and Swiss International have taken a different approach to the premium market. Both airlines have outsourced the business to PrivatAir, a small Geneva-based carrier that has purchased specially built Boeing and Airbus jets for the routes.

The Lufthansa flights, which go from Dusseldorf and Munich to Newark, N.J., and Chicago, use 48-seat Airbus and Boeing planes. There is one premium cabin, which PrivatAir Chief Executive Greg Thomas said is an advantage over mixed-class seating.

“MGM Grand Air worked when it was just a V.I.P. service,” Thomas said. “Things started to go wrong when they added a business-class cabin and ended the exclusivity their best customers wanted.”

The Swiss International Airlines flights -- from Zurich to Newark -- use specially configured 56-seat Boeing 737s. Both the Airbus and Boeing planes have extra fuel tanks and other equipment to enhance their performance on long routes, Thomas said.

Although the tickets are sold through the respective airlines, and customers get full frequent-flier mileage credit and the use of exclusive lounges and other amenities, the aircraft and flight crews all feature PrivatAir crews. PrivatAir is filling 70% to 90% of the seats, depending on the route, Thomas said. Tickets are about $3,500 one way, but exchange rates cause prices to vary.

Thomas concedes that the flights so far represent “just a tiny portion of the transatlantic business traffic each day.”

But his private company, which has about $180 million in annual revenue and is profitable, will take delivery of nine new aircraft in the next three years and is in talks to provide single-class, premium flights for other airlines.

Such a go-slow approach, picking off specific routes where there is less competition, just might work, Aboulafia said.

“You have to get the market right,” he said, “and you need the magic route.”