Path forward for United?

United’s January 31 presentation to its creditors committee makes for some (long) interesting reading.

It gives a fairly detailed look into where United sees itself and the rest of the industry, and makes its case for:
* cutting back mainline flying
* growing the regional jet fleet
* cutting fees paid to regional partner airlines
* starting up a low-cost carrier

United believes they are the ultimate Road Warrior airline, but that the Road Warrior segment (high fares, wants First Class) is deteriorating rapidly. United also believes that they are poorly positioned for leisure traffic. A low-cost carrier on leisure routes is their solution.

Now, I do see some problems.

First, they give away a bit of their myopia when they offer a slide blaming their problems on the Internet. (Customers know price options, spurs competition. Shame!)

Mostly, though, they seem to think that starting up a new airline in the current environment is a good investment… and that they can leverage the low cost airline to help make the mainline more profitable without deterioriating their existing brand. Some trick!

I admit, I’m skeptical. But fascinating reading nonetheless.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community Milepoint.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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