• United Airlines is investing in a revolutionary new aircraft type.
• The head of its latest venture, a jet with one big wing, said it will be like a "living room in the sky."
• The 'blended-wing body' plane built by startup JetZero could replace United's older Boeing jets.

United Airlines is investing billions of dollars in funky new aircraft, including electric air taxis and a supersonic jet. Up next? A plane that's essentially one giant wing.

The airline on Thursday unveiled a plan to buy up to 200 of the 'blended-wing body' aircraft from California-based aerospace startup JetZero. The startup wants to compete with Airbus and Boeing by creating a plane that burns half the fuel of a similarly sized, traditional tube-and-wing plane.

The 250-passenger "Z4" aircraft is not yet certified, but the company is aiming for a 2030 commercial launch and successfully flew a subscale prototype in 2024.

Andrew Chang, the managing director of United Airlines Ventures, the division that funds these innovation-focused investments, told Business Insider the Z4's oversized wing could create a "living room in the sky."

"Everything around the customer travel experience — how they sit in the plane, board, and deplane, and how [crewmembers] serve them — can be reinvented around the new space within this new aircraft design," he said.

Chang added that the conditional purchase agreement relies on JetZero's ability to prove its revolutionary design with a full-sized demonstrator by 2027 and meet United's operational and business requirements on things like cost, fuel burn, and safety.

But he was confident JetZero, which the US Air Force has also backed, could deliver: "If you look at the management team, there's a lot of institutional experience and knowledge there from companies like Airbus and Boeing."

More wing means more cabin real estate

JetZero's futuristic plane combines the wings and fuselage into a single lifting surface. This unique airframe dramatically widens the cabin, allowing United to accommodate over a dozen seats per row.

Widebody passenger aircraft today max out at 10-abreast rows. The densest configuration ever proposed was 11 seats across on the world's largest commercial airliner, the Airbus A380 — though no carriers signed on.

The Z4 will be shorter than traditional dual-aisle planes. Chang said that instead of 20 or 30 rows of seats, there may be only 10 or 15.

There would also be more aisles for navigating the cabin, and up to four entry doors, improving boarding and deplaning efficiency.

Chang added that there would be economy and premium seats with Starlink WiFi and media to create a living-room-like vibe and likely some reimagined spaces: "Every square foot of real estate, you want to have revenue passengers on it," he said.

It's unclear what new spaces United could develop, but JetZero competitor Natilus has some ideas for its in-development 200-person blended-wing aircraft design called Horizon.

Speaking to BI in October, Natilus CEO Aleksey Matyushev said Horizon could accommodate lounge or playroom areas. He added that this could offset the possible complaint of the longer rows reducing the number of window seats.

Delta Air Lines is also working with JetZero as a partner developer. It said the cabin could accommodate accessible seats and lavatories, and dedicated overhead bin space for every passenger.

Alaska Airlines' investment, which also has the option for plane orders, said the airframe would provide a quieter flying experience.

JetZero could replace some of United's old Boeing planes

JetZero said its Z4 plane's better lift and lower drag could cut fuel burn by up to 50% per passenger mile while still flying up to about 5,750 miles nonstop. It would use conventional jet engines and run on traditional or sustainable aviation fuel.

Chang said this efficiency and subsequent cost cuts could make the new jet a replacement for midsize airplanes like the Boeing 757 and the Boeing 767. United plans to retire these older aircraft by 2026 and 2030, respectively.

For example, United said in a press release that a flight from Newark, New Jersey, to Palma de Mallorca, Spain, would use up to 45% less fuel than the twin-aisle aircraft flying the route today.

United's Boeing 767 operates that summer seasonal transatlantic trek. JetZero's new aircraft could take over, and it would fit into the existing airport infrastructure on both sides of the pond.

JetZero's expected commercialization is years away. United plans to take on next-generation aircraft like the Airbus A321XLR and the Boeing 787 Dreamliner as more immediate and reliable replacements for the 757 and 767.

If certified, JetZero's aircraft would provide United with another high-range, high-capacity, and cost-effective fleet option that could comfortably sit in between.

It would have more range and capacity than the A321XLR but less than United's 787-9 and 787-10. The Z4 could hold a handful more people than the airline's smallest Dreamliner variant, the 787-8.

"We believe [JetZero] is a game changer; this is a different way to reinvent aviation," Chang said.

• Major airlines say premium cabins and international demand are key amid economic uncertainty.
• Budget carriers have historically lacked premium seats in favor of cheaper no-frills cabins.
• Frontier, Spirit, and Southwest are all deploying new premium strategies to generate more revenue.

Major airlines continue to prove the importance of premium cabins as budget carriers play catch-up.

First-quarter earnings from American Airlines, Delta Air Lines, and United Airlines showed slowed growth and planned capacity cuts amid economic uncertainty and diminishing demand. Less government travel and fewer US-bound tourists didn't help.

Only one carrier, United, offered any financial guidance for the rest of the year, and warned a recession could cut profits by a third.

One thing all major carriers reporting results so far can agree on is that premium and international demand are helping to keep things afloat, even as share prices crater. That's something budget carriers have only recently begun to invest heavily in.

Without first-class or business seats to offer flyers, Frontier Airlines, Spirit Airlines, and Southwest Airlines have fewer ways to compensate for decreased demand and capacity cuts.

"We anticipate softness in the domestic main cabin to continue," American CFO Devon May said in the airline's Thursday earnings call. "To partially offset this, we expect long-haul, international, and premium bookings to outperform year over year."

Delta and United said economy cabin travelers tend to be more price sensitive and may delay travel plans amid the downturn, while premium economy, business class, and first-class seats are a more resilient and significant portion of their revenue.

New premium strategies announced by a slew of budget airlines last year, like plusher seats and luxury amenities, could help generate more revenue in the long run, but installing them on planes will take time.

Mainline carriers are cashing in on premium demand

All three major carriers reported year-over-year premium revenue growth in their first-quarter earnings. American saw a 3% rise, Delta's was 7%, while United increased by 9.2%.

"I don't think we've ever had premium as a larger percent of our total revenues as we do right now," Delta president Glen Hauenstein said in the airline's April earnings call. "It's sitting very resilient."

Executives attributed this to affluent travelers still willing to pay for premium seats despite the economic environment, especially long-haul flights to Europe and Asia.

They said as much as 75% to 80% of their international revenue originates in the US, and bookings remain strong through the summer compared to the comparatively lower domestic demand.

On the other hand, low-cost airlines' historically all-economy airplanes do not have swanky first or business-class cabins and do not fly long-haul to popular international markets like London and Japan.

Budget carriers' limited revenue streams and lower profit margin offerings make it harder to account for their losses as they cut thousands of flights this year. Mainline flight reductions can be more easily offset.

Budget carriers want a piece of the premium pie

Frontier, Spirit, and Southwest started bucking their historically no-frills trend in 2024. These add-ons come at a cost and would help the budget carriers collect more revenue.

For example, Spirit revamped its premium "Big Front Seat" bundle with more perks like free snacks, alcohol, Wi-Fi, and priority check-in. Frontier added a "business-class-like" cabin where the middle seat is blocked.

Southwest plans to deploy new premium extra legroom and front row seats in 2026. It will also start charging for checked bags in May for the first time in its 50-year history, though loyalty and elite status holders will still keep the perk. Those investments likely won't show up until at least the third-quarter results, analysts said.

"There was a better way to maximize the revenue per square foot in the aircraft, which is the whole game here," Southwest CEO Bob Jordan said in Thursday's earnings call on adding premium seating.

Delta earned $5.4 billion in revenue from its economy seats and $4.7 billion from its premium cabins during the first quarter. That means its premium cabin revenue was equal to 88% of the economy class revenue despite taking up much less real estate inside the plane.

Those are the types of returns the low-cost airlines and their investors hope to get a taste of.

Expected second-quarter revenue from Delta and American ranges from down 2% to up 2%, while Southwest expects flat performance or a decrease of as much as 4% year-over-year.

Frontier's stock is down about 55% year to date, and Southwest is down 21%, outpacing the broader market. Both have pulled their full-year guidance.

Spirit shares will begin trading again on April 29 after the airline emerged from Chapter 11 bankruptcy in March.