Quick Take: Buckle Up and Enjoy a Latte

Flying on a regional jet can be a cramped, unfriendly, please-get-this-over-with experience. But UAL (Nasdaq: UAUA  ) subsidiary United Airlines might be poised to change that.

United's new regional jet terminal in Denver, set to open in late April, will feature several high-end services for passengers, including a Starbucks, an upscale deli, and a Belgian brewpub. Call it a touch of first class for the second class.

The timing seems appropriate. From 2000 to 2006, UAL has increased regional jet capacity by roughly 50%, thanks to more flights and larger jets, including Embraer's (NYSE: ERJ  ) line of regional models.

Meanwhile, United's "explus" service -- which offers a first-class cabin and more spacious seating for the sardine set -- appears to be performing well. Management, for its part, has said that explus is more profitable than what it replaced.

But United isn't alone in its zeal for profits in the smaller skies. Northwest, for example, is shrinking its mainline fleet to accommodate more regional jets. And US Airways (NYSE: LCC  ) plans to install a first-class cabin on its newest Embraer E190s.

Could that signal an industrywide shift to smaller jets? Don't be too sure. Airbus recently completed the first intercontinental flights of its superjumbo A380 jet. Meanwhile, creeping globalization virtually ensures that we'll want to travel farther, faster in the future.

Still, if there's one thing all airlines like, it's money. If United finds a way to make more of it by catering to the upscale tastes of its most frequent small-jet flyers, you can bet the rest of the industry will notice -- and seek to capitalize.

Do you agree? Disagree? Let me know.

Fool contributor Tim Beyers doesn't usually fly regional jets, but he'll take a latte wherever he can get one. Tim didn't own shares in any of the companies mentioned in this article at the time of publication. Embraer and Starbucks are Stock Advisor picks. The Motley Fool's disclosure policy prefers a double decaffeinated half-caf, with a twist of lemon.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 524754, ~/Articles/ArticleHandler.aspx, 9/22/2014 4:47:17 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement