United Airlines makes plea to win back straying business travelers

Skift Take

Corporate accounts will have to ensure that United is really over its problems before they return and sign new corporate agreements. United's reputation wasn't too attractive before the merger with Continental, and it nosedived as cancellations and delays became rampant.

-Dennis Schaal

Is it going to be too little, too late?

As United Airlines officials discussed fourth quarter financial results with skeptical analysts today, they pleaded with corporate accounts to return to the fold, arguing that the airline has left its operational woes of the summer in the rear-view mirror.

That invitation occurred as the airline revealed it trimmed its senior officer ranks by 7% in December, and plans to reduce management and administrative staff by 6% starting in February.

CEO Jeff Smisek, conceding that corporate customers “took a detour,” argued that the airline has momentum, and will win back straying business travelers.

Officials noted that United achieved an 80% on-time performance rate during the fourth quarter, and Smisek said a customer service training program for flight attendants and call center agents, and a broad-based bonus initiative will help woo back corporate customers.

Jim Compton, United’s chief revenue officer, noted that United’s sales team, which interfaces with travel managers and corporate customers, was stressed-out last year.

“The conversation was a little different than we had hoped for,” Compton said.

He said those conversations are reverting to discussions about the value of United’s route network for business travelers.

Other highlights from the conference call include:

  • United plans on having satellite-based Wi-Fi installed on 300 mainline aircraft by the end of 2013, and installations will continue through 2014.
  • Smisek said that United, which plans to take delivery of two additional Boeing 787 Dreamliners during the second half of 2013, has confidence that Boeing will be able to fix the aircraft’s problems in cooperation with the FAA, as Boeing has done in the past with other aircraft types.
  • United’s mishandled bag numbers improved 10% during the fourth quarter compared with the summer.
  • Ancillary revenue increased 2% in the fourth quarter, and United is introducing a fee for second-checked bags on U.S.-Japan flights.

  • FriendlySkies

    I used to be a very loyal United customer – loyal (and apparently profitable) enough to earn its “Global Services” status. However, United’s lag in installing essential onboard tools, like in-seat power and Wi-Fi, made the airline less relevant than other airlines. It didn’t help that United chose not to renew my Global Services status, despite my having flown >50,000 “full fare” miles in the preceding year. 2012 was clearly not United’s year. For the sake of its various stakeholders, especially its employees and passengers, let’s hope 2013 is better.

  • AllinMillss

    UAL could be so much better , but they always seem to be behind the curve in amenities

  • Swampy

    More Houston, less Chicago

  • HMC

    The operational woes is not what pushed customers away. It was the massive system downgrade in March 2012 to Continental’s computer systems, and related frustrations that has caused. Frequent travelers do not have the time necessary to spend dealing with UA. What used to take United a minute or two takes the new Untied 20 because the system is archaic. You can trace all their financial problems back to one fateful day — March 3, 2012.

  • http://www.facebook.com/kelani.kamonouli Kelani Kamonouli

    United just doesn’t get it . It’s the upgrades stupid, if we are going to sit in the back when we can purchase cheap seats, why would we give them our full fare last minute flights and business and first international tickets. I am happy to say we took our 50+ million plus AUA would have received and signed a contract with AA instead.

  • http://twitter.com/MilesFmBlighty MilesFromBlighty

    I am afraid Uniteds management brought this on themselves. They told their elite flyers that they were ‘over-entitled’, sold their upgrades from under them to infrequent flyers for a few dollars and took away ‘perks’, like hotel rooms during irregular operations, like weather. Global Services has created a group of people, important to United, but often not frequent travellers. The poor 100,000 mile flyers (1Ks) are the squeezed middle – no longer important to United but doomed to fly them.

  • crash025

    Living in Charlotte, one thing that prevents me from using United is the lack of a consistent schedule and presence. Its very difficult to ever get a flight that connects me through Chicago. Most of the time its IAD, and rarely if ever EWR. Also, they tend to be a bit costly.

  • TakeTheATrain

    Smisek has been so out of touch with reality. Doesn’t he notice that he is alienating his elites? The boarding process is chaos (GS, 1K, Plat, Global First, and BusinessFirst all in Group?!), upgrades are nearly impossible, and they are basically sending the message that they don’t care about their elite members anymore. I think the biggest insult towards elite members was equating people who fly 50k-74.99k a year on United to a credit card holder. f If it weren’t for Star Alliance, I would have switched to AA.

  • UrbaneGent

    Smisek has alienated every single person of UA/CO frequent flyer program, except GS. It’s not about how much have you spent on UA over the past five years, it’s about how much have you spent on this ticket for today’s flight. Look at what he did to the Pre-merger UA Million Mile Flyers! Hello?! Your most loyal customers for DECADES and they have taken UA to federal court just to fight for the “lifetime” benefits they were promised?! Then Smisek says, “we need you back?!”

    “It’s the customer, stupid”- you don’t call them over-entitled! Any custoner-service company would had fired the person who said this.

  • Gordon Bloom

    United would rather be a credit card bank than an airline. They treat their credit card holders better than customers that have flown a million miles with them.

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