Why Is There No All-Business-Class Jet Service Within the U.S.?

I was in Canada much of last week, and happened to run into an off-duty Air Canada pilot. I had flown Air Canada a few times in the previous days, and told him that the experience was significantly better than on any U.S. airline. He grimaced. “Oh, it’s terrible for us, too,” he said. Then he talked about all the ways in which flying has become so much more unpleasant, even for pilots, in recent years — overcrowded planes, impossible schedules, unpleasant conditions, etc.

So I asked him, if he were king for a day, what’s the first thing he’d do to improve Air Canada?

“That’s easy,” he said. “Change the class of the people who fly.”

We both laughed, but he wasn’t kidding. His complaint was that airline fares have gotten so cheap that there’s simply not enough revenue being generated to run an airline as it should be run, leaving everyone — employees included — pretty unhappy. (For further evidence of airline employee dissatisfication dissatisfaction, see the articles on this subject in today’s New York Times and Wall Street Journal.)

All of which made me wonder: Why is there no all-business-class jet service within the U.S.? Eos Airlines, Maxjet, and Silverjet thought it worthwhile to start all-business-class New York-to-London service at fares well below the typical business class ticket. What would happen if a U.S. airline, startup or otherwise, offered all-business-class service between, say, 10 or 20 U.S. cities including N.Y.C., Chicago, Washington, L.A., Dallas, San Francisco, Miami, Boston, Atlanta, etc.?

I find it hard to believe that there aren’t enough customers to fill those planes in a heartbeat. For all I know, there may be regulations that stand in the way. Or perhaps someone is building such an airline as I type. Steven Udvar-Hazy would surely know.

If so, I know a pilot in Canada who is ready to be your Employee No. 1.

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  1. Molechaser says:

    I may be mistaken, but I suspect there wouldn’t be as large a market for all-business class service (at higher than current market fares) as you might think.

    Most of the potential flyers would be business people flying to meet clients, transact business, and so on. And most of those people either operate under corporate policies that require coach-class travel or bill their travel costs to clients who require the same (although paying for upgrades using your own money or frequent flyer points is generally acceptable).

    For instance, I used to work for a very large corporation, where we had travel rules that specified that most flights within the U.S. had to be booked as coach class, but that flights over a certain length (6 hours? 8 hours? I don’t remember) or overseas could be booked as business class. In my jobs working for an engineering contractor and a law firm, it has been made clear that our clients do not pay for anything better than coach class. Rules like these may provide an explanation for the existence of a business-class-only market for transatlantic travel but the lack of a similar market for domestic flights.

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  2. Molechaser says:

    I may be mistaken, but I suspect there wouldn’t be as large a market for all-business class service (at higher than current market fares) as you might think.

    Most of the potential flyers would be business people flying to meet clients, transact business, and so on. And most of those people either operate under corporate policies that require coach-class travel or bill their travel costs to clients who require the same (although paying for upgrades using your own money or frequent flyer points is generally acceptable).

    For instance, I used to work for a very large corporation, where we had travel rules that specified that most flights within the U.S. had to be booked as coach class, but that flights over a certain length (6 hours? 8 hours? I don’t remember) or overseas could be booked as business class. In my jobs working for an engineering contractor and a law firm, it has been made clear that our clients do not pay for anything better than coach class. Rules like these may provide an explanation for the existence of a business-class-only market for transatlantic travel but the lack of a similar market for domestic flights.

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  3. dcdan says:

    There is something pretty close Midwest Airlines, they have all first class seating and until all airlines stopped serving free food, they had nice meals as well and free drinks. They were started out of the fleet used for Kimberly-Clark executives.

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  4. dcdan says:

    There is something pretty close Midwest Airlines, they have all first class seating and until all airlines stopped serving free food, they had nice meals as well and free drinks. They were started out of the fleet used for Kimberly-Clark executives.

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  5. dhaines32 says:

    A couple of points

    First, I don’t know if they are still in business, but Midwest Express use to offer “One Class” service that was essentially a business class throughout the plane concept. However, I think I had heard that they were recently bought but I’m not clear on the details.

    Second, corporate travel policies may give a transatlantic all-business-class airline an advantage that a similar domestic model wouldn’t have. Many companies allow employees traveling on business to fly business class only on extended trips (i.e. flights of more than five or six hours). These kind of policies would necessarily limit the pool of available customers for premium domestic airlines with shorter routes.

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  6. dhaines32 says:

    A couple of points

    First, I don’t know if they are still in business, but Midwest Express use to offer “One Class” service that was essentially a business class throughout the plane concept. However, I think I had heard that they were recently bought but I’m not clear on the details.

    Second, corporate travel policies may give a transatlantic all-business-class airline an advantage that a similar domestic model wouldn’t have. Many companies allow employees traveling on business to fly business class only on extended trips (i.e. flights of more than five or six hours). These kind of policies would necessarily limit the pool of available customers for premium domestic airlines with shorter routes.

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  7. pendulum says:

    Surely the low cost of air fares is the market reacting to the influx in low cost competition that has increased in the years, forcing the industry to what may be considered allocative efficiency.

    Albiet the price of flights is arguably not reflective of the social cost with global warming becoming an increasing worry, surely we limit the mobility of the population by increasing the price they must bear.

    However with reference to the point you actually make,
    Maybe the demand to fill an entire flight, and every flight with consumers willing to pay more than they need to – as surely most are willing to accept getting from A to B quickly regardless of the luxuries.

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  8. pendulum says:

    Surely the low cost of air fares is the market reacting to the influx in low cost competition that has increased in the years, forcing the industry to what may be considered allocative efficiency.

    Albiet the price of flights is arguably not reflective of the social cost with global warming becoming an increasing worry, surely we limit the mobility of the population by increasing the price they must bear.

    However with reference to the point you actually make,
    Maybe the demand to fill an entire flight, and every flight with consumers willing to pay more than they need to – as surely most are willing to accept getting from A to B quickly regardless of the luxuries.

    Thumb up 0 Thumb down 0