The upgrades still don’t bring the seats to the level of the foreign competition. My advice: Work the partnerships and alliances for all they’re worth.

Yes, it was great to hear American, Delta, and United recently announce that new Business Class seats are on the way—even though the latter two can't tell us when the seats will actually arrive. In fact, only American is close enough to implementation (beginning any time now) to release seat sketches; United and Delta have only verbal descriptions. American says installation will be completed by early 2007 on its B767s. The rollout will then start on its 777s and is supposed to be completed by the end of the year. While the airline won't release the seat's specifications until the National Business Travel Association's (NBTA) annual convention, July 16-19, as you can see at the right, seats app

ear to extend nicely—but at a fairly steep angle.
‍And that’s the problem: American is taking a half step, not a giant leap. It’s still leaning on its loyalty program to compete with foreign carriers rather than offering a competitive—lie (horizontally) flat—product. While I haven't seen renderings of United and Delta’s seats, I would say the odds are 50-50 that they’re going to go down the same dead-end road AA is taking. Click here for more on AA's seats.

Six years ago BA launched its new Business Class cabin with lie-flat seats, which set the industry standard. BA will announce another upgrade any day now, and the seats they will introduce will be better than AA's. The American carriers are two laps behind and fading.

How did this happen? For the past few years the US carriers have been distracted by competition with the low-cost (I say “low-service”) carriers. US carriers abandoned their full-service business model and the chance to please the high-yield traveler, who, after all, produces the bulk of the revenue—40% to 60%, according to some sources—as well as the profit. Without profits an airline can’t invest in new seats. Yet it’s also true that new seats contribute to the bottom line. Iberia Airlines claims that only eight months after introducing new Business Class seats it has had a 20% lift in sales. BA and Virgin have had similar results from their Business Class cabin investments.

Everyone’s doin’ it Air Canada and Air New Zealand are buying new Business Class seats that are nearly identical to Virgin Atlantic's trendsetting ones. LAN Chile just received its first aircraft equipped with 180-degree reclining seats. (It may soon be the best airline to fly to South America; get two-fers via Amex IAP at (800)801-6564.) Finnair and Thai Airways are in the middle of new rollouts. Even Alitalia, Austrian, and SAS are coming out with new seats.

It points up the maxim of the airline business today: It's all about premium service. Premium Economy is the new economy, and all-Business Class (EOS, KLM, Lufthansa, MaxJet and SWISS) is the trend. Singapore Airlines doesn't have economy class on two flights to its home base, and even United's domestic p.s. service is Economy Plus or better. Further evidence that the demand for premium seats is spiraling upward comes from Continental and Delta, which are jacking up the cost of premium “anytime” mileage awards by up to 40%, and Air Canada and United beginning to install First Class seats on regional jets. No one wants to settle for coach if they don’t have to.

The silver lining Given their inferior product, US carriers will be forced to continue discounting, unlike BA and Virgin, who often get away with charging $1,000 and more on the same routes. Here are some of the other ways that the US carriers’ inferior (though improved) seats may benefit you:

• If you're flying with them already, you'll be getting a better seat, likely for the same money as before. In other words, you won't feel so bad paying $2,500 for these seats.
 
• If you normally use miles for Business Class travel, you'll be getting more for them than before. Credit card programs that have numerous mileage partners will be even more valuable as seat quality improves overall.

The Big Payoff is when foreign carriers are forced to match the US carriers’ deeply discounted fares. It’s already happening. Take Air France, a Sky Team and code-share partner with Delta, for example. It has to discount on code-share routes because Delta does. But Air France’s new wide—Delta's nowhere close. SWISS is another good airline to keep in mind because it often matches US carriers’ fares—and its seats recline to 170 on its LAX-Zurich service, and can be as much as 3 inches wider depending on the aircraft.In other words, the gems will be the foreign carriers with good seats who match the US carriers' fares.

The Biggest Payoff A mileage upgrade or free award seat on one of these foreign carriers.

Meanwhile, what else can you do? Check your patriotism at the gate. If you currently use an American carrier to go abroad, it’s time to make new connections. Here’s the practical side of dealing with the seat disparities.

• If your company requires you to fly a domestic carrier, look for code-share flights operated by a premium foreign carrier. Example: Between New York and Paris, Air France flights operated with B-777s (specifically the "77W") have new 180-degree flat seats; its partner, Delta, operates fights on the route with seats reclining to only 160. With some of the "DL" coded flights operated by Air France, you can buy Delta but actually realize its partner's comfort.Both airlines sell seats for the same money.
 
• If you're married to a US program, remember that you can often still earn miles when flying on an international alliance partner. Example: Flying SWISS earns miles and elite credit on United, as it joins the Star Alliance April 1.
 
• If you're just joining a loyalty program, think of it as actually joining an alliance (e.g. One world, Sky Team, or Star Alliance) rather than a single carrier.
 
• The sleeper: Keep an eye on Air Canada: If you have to make a connection, the airline’s seat upgrades should make it worthwhile doing so in Canada. (See FCF Dec. 2005 for more on AC seats.)

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