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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.
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.