United's CRJ-550 is a small jet that goes big on first class

From the outside, the newest member of United Airlines' fleet looks like every other Bombardier CRJ-700, a 70-seat workhorse flown widely across the regional airline industry.

Inside, however, the plane is a brand new type, called a CRJ-550, from which United has removed 20 seats – a counter-intuitive move in an era when airlines are eagerly stuffing more seats on their airplanes to help reduce costs and goose profits.

Further, ten of those 50 seats are in the first class cabin. By putting premium perches on a small regional jet, United hopes to close an amenities gap for a highly competitive group of travelers from smaller cities to its Chicago and Newark, New Jersey hubs.

The first class cabin of the new United CRJ-550 regional jet.

“It’s kind of an out-of-the-box project,” said Ankit Gupta, United’s domestic network vice president, conceding that he was skeptical at first due to the lost revenue from flying with fewer seats. “Your immediate gut reaction is ‘it’s going to be difficult but you say let’s go through and give it a fair shot.’”

On the CRJ-550, United has installed four sizable luggage closets and positioned a self-serve refreshment center for the 10 passengers riding in first class. (Forget about grabbing your own booze: alcohol distribution remains the flight attendant’s purview.)

There’s Gogo WiFi - albeit the slower air-to-ground version – and 20 extra-legroom seats in addition to 20 economy seats in the back. The plane also has larger overhead bins to hold roller bags.

A self-serve snack area is available for first class passengers.

The goal of the new jet is to connect international passengers who prefer to fly first class all the way from home, say if they live in Grand Rapids, Michigan, or Tulsa, Oklahoma, and not just when they board their connecting flight at a United hub.

For many of its short regional routes, United has been flying a far larger quantity of single-class 50-seat jets than American and Delta. Many of these smaller cities will soon see the CRJ-550, including Allentown, Pennsylvania and Bentonville, Arkansas.

United sees the luggage closets as a key feature to lure business travelers, because the new plane means the end of gate checking your bags.

Sarah Murphy, a senior vice president who manages United Express, said multiple tests “with actual people with bags and a stroller and car seats” have shown the CRJ-550’s ability to quash that dreaded jetway inconvenience.

Luggage closets near the Premium Plus section.

“Every bag is going to get on,” Murphy said. “It’s going to create that moment where you go ‘Ah, even with a tight connection I’m going to be able to go with my bag and not wait for the bag to come up.’”

United plans to take on a fleet of 54 CRJ-550s into 2021, and is targeting an initial 26 markets with the plane, growing over time to as many as 35. At first, the new jets will fly between 15 smaller cities and O’Hare, later expanding to six more through early January.

Service at Newark starts in February, offering flights between the New Jersey hub and four markets. United’s Washington-Dulles airport will also see a few CRJ-550 flights, with the longest route for the new jet scheduled thus far between that hub and St Louis.

The aircraft has larger overhead bins to hold roller bags.

The new plane has generated speculation that it may be United’s response to a labor contract with pilots that limits how many larger regional jets United can fly—and its pilots’ unwillingness to yield on the issue. Contractual restrictions on regional “scope” limit how many jets with more than 76 seats United can operate. (This is also why United is buying Embraer SA 175 jets with only 70 seats for its ExpressJet Airlines Inc. regional carrier.)

But the CRJ-550 is a critical addition regardless of the contract, Gupta said, because many cities with premium demand, such as Cedar Rapids, Iowa, aren’t suited to a 76-seat jet.

“We would definitely be flying this product with or without the scope clause changes,” he said. About 56% of United’s 580-jet regional fleet consists of older 50-seat models without a premium cabin, a far higher percentage than its two main rivals.

A spokesman for United’s pilot union, Captain Greg Everhard, described the CRJ-550 as “a pretty smart competitive response” because the airline lacked premium seats in many smaller cities. “We thought the [older] 50-seaters were terrible and this is a better product, so good on them.”

The CRJ-550 will also feature Gogo WiFi.

The CRJ-550 project began in mid-2018 when Richard Leach, chief executive of United regional carrier Trans States Airlines, suggested that with a gut renovation the CRJ-700s in his GoJet subsidiary’s fleet could command higher revenues. That would also help close the product gap with American Airlines and Delta Air Lines.

The proposal led to a detailed financial analysis, Gupta said. Losing 20 seats would increase the jets’ unit costs by almost 10%, but adding 10 premium berths, luggage closets and other amenities would garner a revenue premium. “The aspect of customer experience is tightly linked to financial performance,” Gupta said.

The CRJ-550 refit is similar to work United began early this year when it reconfigured almost two dozen of its trans-Atlantic Boeing 767-300ERs to make room for 46 new business-class seats and 22 premium economy seats, leaving only 99 in economy class.

United flies that fleet mainly between Newark and London. Unit costs on those 767s rose 25% due to the reduction to only 167 seats, a decision that was made “knowing we’re going to get it back” in terms of the planes’ unit revenues, United’s chief commercial officer, Andrew Nocella, told analysts last week.

The United CRJ-550 sits at a gate at O'Hare International Airport.

U.S. and Canadian aviation regulators had to certify the CRJ-550 as a new aircraft because of the extensive interior modifications, which affected the aircraft’s weight and other performance metrics.

Because all bags are stowed in the cabin, United says the jet will spend less time at the gate than others in its 50-seat regional fleets, saving time – and costs – each day.

“We operate in a world of minutes, and a minute matters,” Murphy said. “Even when you tell a customer ‘your bag’s not going to fit on board’ people like to try. And that is hard when you have to then swim upstream during boarding. So eliminating some of those pain-points is really important.”

Businessweek