Skift Take
United hasn’t been affected by the Boeing strikes so far, but it and other airlines will eventually need their planes.
United Airlines is the only carrier that charges passengers for a carry-on when they fly basic economy for domestic routes.
As other carriers have started including carry-ons into their basic economy fares, United chief commercial officer Andrew Nocella said the Chicago-based airline may reevaluate its policy in the future.
Nocella said the main reason why United still charges for basic economy carry-ons is overhead bin space.
“The issue here is the overhead bins onboard the aircraft were just not big enough to accommodate it all,” he said at the Skift Global Forum on Wednesday.
The United executive said the carrier is currently working to fix the issues with overhead bin space.
A lack of overhead bin space has been a years-long issue for airlines as carry-ons have become a more popular alternative for passengers hoping to avoid paying hefty checked baggage fees.
To solve the issue, carriers have slowly started adding bigger overhead bins to their fleets. For example, United plans to add larger overhead bins to some of its regional aircraft. Southwest Airlines announced in February that it would also add more overhead bin space to its Boeing 737 8 Maxes and -800s.
United Safe From Boeing Strikes — for Now
As Boeing machinists continue to be on strike, Nocella said that United hasn’t experienced any issues related to it.
He said the carrier had an insurance plan that was “so significant for this year” to compensate for any aircraft that don’t arrive on time. United initially expected to have 80 737 Max 10s for 2024, but revised its guidance partly due to certification delays for the aircraft.
The strikes have caused Boeing to furlough tens of thousands of workers, including U.S. executives and managers. Boeing chief financial officer Brian West said the company would also freeze hiring and pay to cut costs during the strike.
However, Nocella cautioned that if the strike continued for an extended period of time, it would have an impact on United. “We have plenty of aircraft available for flight schedules as planned for the time being, and hopefully Boeing and its people can resolve their issues as quickly as possible,” Nocella said.
United’s Ambitions to Offer Choice
United has been one of the carriers that’s been bullish on both basic economy and premium cabins.
The carrier has seen revenue for basic economy soar in recent years. During the fourth quarter of 2023, revenue for United’s basic economy was up 20%.
Nocella noted during a call with analysts last year that basic economy made up around 12% of United’s domestic passengers and he expected that number to grow as it creates more low-fare seating when it receives new deliveries.
The carrier also introduced refreshed first-class seats last summer for narrowbody domestic flights.
At the Skift Global Forum, Nocella said the offerings boiled down to choice.
“One of the first things that I talked about with [CEO Scott Kirby] was trying to move this airline in the direction of offering choice to our customers,” he said. “So if they wanted a basic economy experience we can deliver that, or if they wanted the most elevated experience, we could do that and everything in between. I think that’s just been a home run for our customers.”
