The Real Reason You’re Flying on a United Regional Jet With a Bar

Imagine this: you’re sitting in a direct-aisle-access,
first-class seat with a lovely view over Chicago. You’ve got
legroom for days. There’s fast Wi-Fi, and the plane is so fancy
your roll-aboard is stashed in a closet rather than an overhead
bin. Flight attendants are bending over backward to bring you
snacks and drinks, but you’re more interested in serving yourself
at the walk-up bar.

Emirates A380… or a vision of your future regional jet? (Photo by
Nick Ellis / The Points Guy)

The newest in transcontinental premium? Not quite. It’s
actually what you will see soon from Arkansas to O’Hare. United
recently introduced one of the stranger aircraft we’ve seen: an

over-the-top premium regional jet
that seats just 50
passengers, with a full 20% of the cabin devoted to first class and
another 40% to Economy Plus. The CRJ550, based
on the existing Bombardier CRJ700, will be used on premium
regional routes of up to 900 miles, replacing current 50-seat
aircraft such as the Embraer 145.

So far, United confirmed only that this blinged-out regional jet
will fly between Chicago (ORD) and Walmart’s headquarters in
Bentonville, Arkansas (XNA). More flights out of O’Hare will
follow this summer, with sightings in Newark (EWR) not far behind.
But here’s the $64,000 question: Why?

Scope Clause

To really understand why United is serving up a regional
aircraft with top-tier amenities, you need to understand a bit of
legalese. The scope clause in United’s contract with the Air
Line Pilots Association (ALPA) limits it to “255 large regional
aircraft.” Those are aircraft with up to 76 seats. Per its latest
fleet plan, United is up against that 255 figure, which puts it in
a real bind. With an inability to add more 76-seaters, the options
are somewhat limited when it comes to competing with Delta and
American Airlines. It can add larger mainline jets, where it would
need to pay pilots 2x-3x than the going rate for regional operators
flying for United. like GoJet, or it can add more 50-seaters.

Delta Airbus A220 C Series CS100 Preview at ATL - zoomThe
cockpit of Delta’s new A220 (Photo by Darren Murph / The Points

While the airline hopes to renegotiate with pilots and push that
255 cap higher, it has decided to take a plane designed for 76
passengers (the CRJ700) and creatively put it into service with
just 50 seats as a workaround.

Will It Work?

United is marketing the CRJ550 as a premium product, but
industry analysts I spoke with agree that this is merely a
short-term play to become attractive to business travelers with a
two-class product in regions that are already enjoying two-class
comforts from Delta and American.

existing CRJ700 cabin (Photo courtesy of United Airlines)

When I asked Brett Snyder, president of Cranky Flier, whether he thought
Delta or American would follow suit with fancified 50-seaters of
their own, he was unambiguous: “I don’t expect that American or
Delta would follow this move anytime soon. They have enough more
efficient aircraft in the regional fleet to serve the markets where
they want a premium cabin. The only reason [for] American or Delta
[to follow suit] is if the 50-seaters all age out of the fleet and
they can’t find anything else to replace them. But that’s not
an immediate issue.”

He also said that he would expect United to quickly change
course and put more seats into these CRJ550s (essentially
converting them back to CRJ700s) if a new scope clause allows for
more large regional jets. “United doesn’t want to fly these
planes with only 50 seats,” said Snyder. “It just has no other
choice as of now. If that changes, I can’t imagine United opting
not to put more seats back on.”

Helane Becker, managing director and senior research analyst at
Cowen, flatly told me that the
CRJ550 would not exist if not for United’s current scope clause.
“American has room for 320 regional jets, while Delta has room
for 325,” she said. “United’s cap of 255 puts it at a
disadvantage in the peer group.” While Delta is adding 90
with 109 seats each, it’s also willing to pay a starting rate for
first-year first officers of $92 per hour. Meanwhile, the starting
rate for regional operator SkyWest is $45 per hour, while GoJet is
$37 per hour. United’s pilots have thus far responded to contract
negotiations by saying that they’d happily fly 76 seat regional
jets, but only if they are allowed to fly them (as opposed to
lower-paid regional pilots).

Becker also reiterated that United seems bent on not adding
further complexity into its aircraft mix. “United already has a
complex fleet,” she said. “The more complexity you add with
respect to catering, gates, maintenance, etc., the greater the
likelihood you won’t get your planes out on time.”

Hunter Keay, managing director, airlines and A&D at Wolfe Research, pointed out that
United “thinks more premium revenue will cover the incremental
CASMx headwinds from fewer seats on the planes.” That’s a bit
of jargon referring to “cost per available seat-mile.” In other
words: With fewer seats on the same plane, costs go up, but because
those seats are bigger and better and sold for higher fares, the
airline rakes in more money. However, the introduction of the
CRJ550 indicates that the airline “doesn’t expect scope clause
change anytime soon,” Keay said.

What It Means for You

If you’re a United loyalist based in a market that drives
premium connecting revenue through Chicago (ORD) and Newark (EWR),
this is excellent news. You’ll soon see single-class regional
jets replaced with CRJ550s, offering by far the most elegant
experience to date in a 50-seater. It’ll make things far more
pleasant for you when connecting to United’s larger hubs for
onward travel. Unfortunately, the CRJ550 will be a rare sight
outside of Chicago (ORD), Newark (EWR) and perhaps Houston
(IAH). Given that the CRJ550 has a 900-mile restriction, you
won’t be able to fly this bird on longer routes.

If you’re a Delta or American flyer, this won’t have any
significant impact on you unless it’s enough to make you
reconsider your loyalty. The CRJ550 is United’s attempt to catch
up with two-class aircraft from AA and Delta, which it views as
superior. The CRJ550 coming to town may have a small impact on how
Delta and AA price their tickets, but it’s not apt to trigger
substantial change.

Overall, it is encouraging to see airlines appreciating demand
for premium seats in regional flying. After years of racing to the
bottom in the space, Delta has introduced the widest
economy seats in its entire fleet on the A220
and United is
repurposing CRJ700s to provide more luxurious flights to just 50
passengers. We hope that these are signs of even more positive
change ahead for the passenger experience.

Featured image of an Emirates A380 by Nick Ellis / The Points

Source: FS – All-Travel destinations-News2
The Real Reason You’re Flying on a United Regional Jet With a Bar