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United CEO: Integration Focus Is In the Rear-View Mirror

@denschaal

Jan 23, 2014 12:00 pm

Skift Take

If United officials truly believe the carrier’s merger woes are yesterday’s problem, then their problems are truly much larger than imagined.

— Dennis Schaal

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Toru Hanai  / Reuters

A United Airlines' Boeing 787 Dreamliner approaches Tokyo International Airport In Narita, Japan. Toru Hanai / Reuters


When you listen to United Airlines officials tout the carrier’s 2013 accomplishments, you wonder why there is such a disconnect between their views and what’s reported in the media.

Despite tons of passenger gripes about delays, cancellations and operational woes, along with sporadic technical glitches, officials said today that they have managed to produce a reliable airline and one with soaring customer satisfaction scores.

Speaking during the company’s fourth quarter earnings call, CEO Jeff Smisek said United has “moved past integration” can can now focus on being an even better airline, and Jim Compton, chief revenue officer, said United offered a “consistently reliable operation in 2013.”

Their assessment diverges sharply from that of Wall Street Journal columnist Scott McCartney who, in reviewing the Best (and Worst) Airlines of 2013, cited United and American as among the worst, although he notes that United has mounted some improvements.

“Those two have occupied the bottom rungs of the industry ladder for past three years,” McCartney writes. “Both had flight cancellation rates at least three times higher than Delta’s.”

“United and American both promised big improvement in 2013 after major problems in prior years,” McCartney adds. “And both saw some improvement–but not enough to catch rivals, even as their service declined.”

In news to come out of the earnings call, Compton of United said:

  • The airline would be adding slimmer seats in Economy in 2014 as one of the elements in modestly increasing capacity, which has declined for the past three years. So Economy passengers flying United can expect to do a lot more elbow-rubbing with their seat mates.
  • United’s ancillary revenue increased 18% in the fourth quarter of 2013, and on a per-seat basis, Economy Plus seats revenue jumped 36%.
  • Business travelers will be able to book Economy Plus seats through their companies’ travel management companies because United in 2014 will give travel agencies tied into all three global distribution systems the ability to offer Economy Plus. The pricing will be “dynamic,” based on demand, length of the flight, and other factors.

CEO Smisek noted in 2014:

  • United plans to install power hubs and power bars at the gates in all of United’s domestic hubs.
  • With Wi-Fi installed on 170 aircraft, United will outfit one new aircraft with satellite-based Wi-Fi per day.
  • United launched a well-received iOS app in 2013, and will launch an Android app in the Spring, along with a redesigned United.com in the second quarter of 2014.

 

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