Upcoming Changes at the Post-Merger United, Outsourced Blog Post Edition

Matthew details comments about upcoming changes to United’s products and the future of their business model. One thing’s for sure, Jeff Smisek certainly seems to know more about the airline’s operations than his predecessor Glenn Tilton.

  • “Differential offerings for each customer” through specially-tailored options for each users based on “advanced” software that tracks what customers needs, leading to substantial revenue increases for United.
  • Employee morale – not about classroom training, it’s about trust of management
  • Poked fun at Delta – says UA will have a lot more lie-flat seats than “that carrier from Atlanta”
  • Economy Plus is a moneymaker–upselling is gaining traction
  • Wouldn’t share details about new mileage program, but promised customers and bean counters would love the new product.
  • Again, emphasized specifically tailored travel options–specifically mentions holding fares.
  • Airline clubs will be enhanced.
  • Ability to toggle between United and Continental on Easy Check-In Machines at airports coming.
  • Commitment to A350 and 787 program, though UA can “downsize” if necessary.
  • “We’ll have the 787 years before any of our competitors have it” (and the A350 as well).
  • “Mixed fleet for a considerable period of time” – No final decision yet on whether United will keep the three-cabin model.
  • Premium Service (p.s. – LAX/SFO-JFK) service interiors will be upgraded – lie-flat seats will be added (no confirmation that three-cabin service would be removed, but this was during the discussion of three vs. two cabin service)
  • Repeatedly refers to front-line staff as his “co-workers” not his employees.
  • Would like to simplify fleet over time, though that’s a “decade long” project. Wants a fuel-efficient fleet.
  • Must be disciplined in capacity – “We don’t have anything to prove in terms of size–we’re the world’s largest airline now…but we’re here to make money…We’re very focused on making money.”

I don’t like to hear the CEO making comments about a new mileage program that satisfies the bean counters, because comments about satisfying the customers then usually relies on surveys by marketing groups who manage to find ill-informed flyers to say good things about the marketing firm’s client’s ideas. But the moves so far since the Continental folks have taken charge (though the President of Mileage Plus is actually a United guy) have been pretty uniformly positive.

The bet on the future of United’s “p.s.” service between New York and Los Angeles/San Francisco is that it goes two-cabin, rather than the current three-cabin, but that it gets Continental’s new international business class seats which are superior to United’s and American’s first class seats on the route. The biggest issue, though, is that they’ll probably have fewer premium seats on the aircraft once this switch is made than they do now.

Matthew also details plans to install wireless internet across the Continental domestic fleet “starting in 2012” which is a long time to wait considering the extent to which internet is already available on the Delta, American, and Alaska Airlines fleets. And consdering that there’s still apparently no plans to install internet across the existing United fleet.

Finally, since Smisek is talking about improving the club lounges (and since he’s talking about employee morale, all he’d have to do is find good employees for the Red Carpet Clubs at Dulles and he’d hit the goal, that and remove the rats…). Well, Lucky details a somewhat less expensive way to buy lounge access with United and Continental: partner US Airways reduced its price for club members to $259 for all membres (first-time joiners pay a $50 initiation fee). US Airways no longer adds a surcharge to access partner lounges, or provides a discount to elites. The $259 price shows up the same for everyone on the page. Presumably this is a short-lived offer, but it doesn’t show up that way as “valid through” but rather just shows up as a lower price.

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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Comments

  1. Gary,

    I am glad to hear you say that you find of the post-merger changes to be positive. From a lot of what I have read, there seem to be more people complaining than praising – and I keep wondering what it is that I am missing.

    I know that there is hand-wringing and “I’m taking my business elsewhere” harumphing going on from both Continental and United elites, but in my view it has seemed louder from the United folks. Is the paint scheme that important? 🙂

    Anyway, I have always liked flying CO and my experiences on UA have not always been positive ones, but I’m going to at least see how this plays out before I start kicking and screaming too loudly – but, as you say, MOST of the changes that have come along so far, don’t seem all that bad.

  2. Totally off topic, but I got an email this morning from BMI saying that they would not be honoring my recent instant silver sign-up and would be downgrading my account with them. Something about it being a targeted link that I wasn’t supposed to be able to use.

  3. I’m guessing the bean counters don’t like that you can buy a $158 transcon and get $100+ value back in miles.
    I think we can safely assume there will be a devaluation in the mileage program, if not for current balance then in earning ability going forward.
    There seems to be a rush to switch to revenue based programs, which in my opinion favor occasional business travelers and offer little in value to the frequent flier.
    Well I guess we can always switch to USAir.

  4. Perhaps they’ll just be adding in additional paths to status through revenue? Premier for $5k in spend, Premier Exec for $10k, 1K for $20k?

  5. The change sounds a lot like the new Rapid Rewards (or TrueBlue or Virgin America’s Elevate). Those programs exterminate the “buy low, redeem high” tactic. They generously reward “buy high, redeem low”, actually increasing the old programs’ value for high-fare customers.

    With most of the gaming opportunities gone, these programs are boring. Expert or neophyte, you will get pretty much the same value out of them. That’s a huge change.

  6. You wrote:
    One thing’s for sure, Jeff Smisek certainly seems to know more about the airline’s operations than his predecessor Glenn Tilton.

    I write:
    I do believe that is what Joe Branatelli has said about United and Glenn Tilton since, oh, 2004. AS he has pointed out for years, what’s been wrong with United is MANAGEMENT, not the customers or the employees. Too bad it took so many of the rest of you “experts” so long to realize what was obvious to at least one smart business traveler since the beginning.

  7. @CynSere when did I ever defend Tilton? That said, I don’t think that is the ONLY thing wrong with United. But Smisek should be able to right the ship and bring service up to median US standards at least. There ARE some great employees but they are not the norm or at least universal, and United’s employees are NOT as good as at many carriers. Sure, some of that is management but not all…

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