While traveling with United Airlines, fliers might have noticed that its airfares are more expensive than those of other US-based air operators. Although the services, customer support, onboard experiences, etc. are quite appreciable, the overall travel is costly.
One of the reasons why United Airlines is so expensive is its pricey tickets, as it majorly counts on business travelers. Additionally, there is no such ‘low-cost fare’ policy. Besides, there are several other reasons why this carrier may constantly increase airfares.
A closer look at these can help understand whether this carrier has cost-effective or expensive services and how worthy these are.
Common Reasons that Explain Why United is So Expensive
Behind the increased airfares of United, there are several reasons to observe. The carrier counts on business and corporate passengers more than others. In order to retain them, it offers luxurious and extremely comfortable travel experiences through its services. As a result, the ticket prices go up. Though the rates are competitive for these passengers, others will find the same expensive.
Here are other common reasons that make United an expensive carrier.
1. Excessive Dependency on Luxury Travelers
A major reason why United flights are so expensive is that it mostly depends on luxury travelers who are higher-paying. Such flyers, particularly in the Business Class and First Class, tend to pay more to get additional services, flexibility, and excessive convenience. This results in higher prices as the carrier focuses more on fulfilling their expectations and demands.
2. Revenue Share of Leisure/Business Fliers
United counts on business/corporate fliers as a huge part of its total revenue is collected through these. As per some industry reports, approximately 60% of the entire revenue is generated from business fliers. It means leisure travelers only have a share of 40%. These stats allow the airline to set high fares so that it can maximize its profits.
3. Prioritizing Corporate Accounts and Business Routes
This is a crucial reason that hints at why United is so expensive. When you see its coverage or route network, you will realize that it focuses more on major business routes such as New Zealand, Singapore, Rome, etc. Along with this, it manages corporate accounts with big market leaders.
Such market leaders enjoy traveling with United as it offers special discounts and preferential services. While this approach benefits corporate and business passengers, it results in higher airfares for others for similar destinations.
4. Last-Minute Travel Needs and Higher Fares
It is an obvious fact that bookings done fewer days before travel will cost flyers more. Since United majorly serves business and corporate flyers, their demand for last-minute travel needs to attend events, meetings, or any official trips can drive up increased fares.
This carrier makes the best use of this last-minute travel demand and increases ticket prices. Hence, United Airlines flights are very expensive.
5. A Lack of ‘Low-Cost’ Airfare Norms
Most airlines that offer reasonable air travel experiences often have low-cost airfares. However, this is something that is missing with United Airlines. With this operator, a flier may not find benefits like affordability.
Along with this, most affordable airlines offer Basic Economy with limited to no additional services so that every flier can enjoy the air travel experience. This is not the case with this major American carrier. It does have Economy/Premium Economy tickets though but on limited routes only. But even if cheap fares are not observed, cost-effectiveness is ensured.
6. Absence of Basic Economy on Some Routes
The US-based airline has Basic Economy fares available on only selected routes. Thus, it is hard for it to compete in such a cut-throat competition wherein every carrier is offering lucrative benefits and special discounts.
Since Basic Economy means comparatively low airfares, its absence on major destinations automatically puts pressure on other cabin classes. This also ends up with increased fees.
Please note that this airline has Economy and Economy Plus options on all routes that are more affordable than premium cabins. However, due to the in-flight facilities offered, United is still so expensive.
7. Limited Partnership with Low-Cost Airlines
Most airlines share partnerships with other carriers so that they can offer maximum benefits to their travelers. United Airlines only has a limited number of partnerships with low-cost carriers. This restricts cheaper fares for passengers too.
Since inexpensive air travel partners can add more value by offering economical fares, without them United struggles when it comes to offering affordable tickets.
8. Higher Fees for Flight Changes and Cancellations
A budget-constraint traveler who has traveled with United Airlines will know that it charges more to modify or revoke a reservation. This makes people with limited travel budgets find it difficult to change/cancel tickets.
As soon as a flier manages his/her reservation, the applicable fees are added up immediately. For the same, charges with other air operators are quite lenient.
Is United Expensive due to Reduction in Seats and Flight Consolidation?
Seat reduction and flight consolidation are the factors contributing to high-fare flights with United. Why are United flights so expensive is also possible because of the merger with Continental Airlines, resulting in such fares.
Below are some more reasons that cause seat reduction and flight mergers:
1. Merger with Continental Airlines
In 2010, United Airlines and Continental Airlines were merged. As a result, a limited number of flights are available now. Even though mergers are meant to serve a wider network of routes, this consolidation streamlined the services but routes became limited. With limited flights, the airfares automatically increased.
2. Use of Jets on Certain Routes
To improve profitability and optimize operations, United Airlines has replaced mainline planes with jets on some routes. Although it is more like a strategic step by the operator, from the passengers’ viewpoint – seats are reduced on those routes, resulting in increased airfares. During peak periods of travel, the flight tickets for these routes are hard to get.
3. Crowded/Overbooked Planes with Limited Supply
There is a basic formula of economics to determine the upsurge and drop in the price of something and that is – an imbalance in the demand and supply. With United Airlines, you will see a huge gap between these price determinants.
For some routes, there is a reduced number of planes and the peak in demand causes them to be crowded. This is why United is so expensive, especially during the peak season.
Why has United Increased its Airfares?
Inefficiencies associated with operations are yet another reason that makes ticket prices of United Air higher than others. Higher maintenance, poorly designed cost structure, etc., are some contributing factors.
Here is detailed information in relation to such price hikes and operational inefficiencies:
1. Use of Old-style Planes
The fleet of United Airlines consists of 950+ aircraft. Some of the planes are quite old. To operate them safely and securely, regular yet expensive maintenance is needed. For instance, Boeing 767-300ER is nearly a 32-year-old aircraft in its fleet.
Since such planes cannot be operated without proper maintenance, the overall cost goes up. To manage its profits and revenue, the same is possibly collected from travelers in the form of higher airfares, indicating why United Airlines is so expensive.
2. An Inadequately Designed Cost Structure
For any carrier, fuel costs, labor wages, employees’ benefits, etc., are some important expenses. Since the cost of fuel fluctuates a lot, the profitability can greatly be affected. This is where a smartly constructed cost structure plays a leading role.
However, United Airlines struggles a bit in this aspect even after being a popular and old air operator. As simple as that, when a carrier has difficulties relating to its cost structure, it will end up with higher fares.
United Airlines is so expensive but it aims to provide better value for each penny spent by the passengers. Its exceptional in-flight services and world-class travel experiences are cost-effective. Though it is working to minimize operational inefficiencies and factors that cause price hikes, currently, it is more suitable for luxury travelers.
