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What's The Difference Between UA And TED In Coach?  
User currently offlineRichard28 From United Kingdom, joined Aug 2003, 1618 posts, RR: 6
Posted (10 years 9 months 3 days 4 hours ago) and read 5255 times:

With Ted, the Low cost off-shoot of United launching soon, I'm wondering, how are they going to differentiate the "Ted" product from the "United" product (other than the routes that they fly of course).

With most short-haul flights offering no food service, and a beverage service that you pay for on both United and Ted, what is the difference for coach pax?

The only one I can think of is frequent flyer mileage (unless Ted will offer that??)

LCC's have revolutionised flying, however I can't help but think that United must either jump fully on the LCC bandwagon, and make all of United fit an LCC criteria, or stay a full price airline, with "lower prices, but still the frills" in a similar was that BA have successfully done in the UK.

To have one foot on the "LCC" path, and one foot firmly placed on the "major" path seems like an absurd business plan that can only end in tears - either for Ted or United - both cannot survive in their current format.

I'm struggling to understand the board's objective in this (and the same arguments can of course apply to Delta/Song).

Convince me there is a solid, sensible, practical, long term business plan here!



18 replies: All unread, jump to last
 
User currently offlineCOEWRNJ From United States of America, joined Oct 2003, 1064 posts, RR: 19
Reply 1, posted (10 years 9 months 3 days 3 hours ago) and read 5216 times:

I'm probably wrong but to me TED is just a glorified ad campaign for UA. The fares on flights that I have looked at are far from "low fare" and the only difference I can see is that you have to now pay for the food on the flights and instead of having First Class they will have Econ+. But what I here is you can not reserve Econ+ you have to be Premier otherwise you get the oh so comfortable standard pitch seat. I see TED ending in disaster for UA. They really should just stick to what they at one point or another were good at and try and improve it drastically. Otherwise UA is going to end up like Pan Am, TWA and all the others. All TED is, is a mask for UA. Passengers for the most part aren't crazy about UA so they make a new product and are basically putting a band-aid over their bleeding wounds.

User currently offlineDLKAPA From , joined Dec 1969, posts, RR:
Reply 2, posted (10 years 9 months 3 days 3 hours ago) and read 5210 times:

TED: Tilton's Extreme Dilusion

:D

DLKAPA


User currently offlineCOEWRNJ From United States of America, joined Oct 2003, 1064 posts, RR: 19
Reply 3, posted (10 years 9 months 3 days 3 hours ago) and read 5209 times:

DLKAPA
Nicely Put.. You could not be more correct..


User currently offlineMattnrsa From United States of America, joined Dec 2002, 393 posts, RR: 1
Reply 4, posted (10 years 9 months 3 days 1 hour ago) and read 5043 times:

I haven't heard too many specifics, but it seems like they will be similar. I think the Buy Onboard program will be available for food, in addition to some additional video/audio programming selections. The main difference will be larger economy and economy plus sections, allowing more passengers to be carried. The load factors on Ted routes are very high, so the additonal capacity wll come in handy.

User currently offlineZrs70 From United States of America, joined Dec 2000, 3166 posts, RR: 9
Reply 5, posted (10 years 9 months 2 days 22 hours ago) and read 4989 times:

I think the only thing people have against Ted is the name.


14 year airliners.net vet! 2000-2013
User currently offlineFA4UA From United States of America, joined Nov 2003, 812 posts, RR: 20
Reply 6, posted (10 years 9 months 2 days 20 hours ago) and read 4945 times:

Now before we start another thread bashing UA and TED, I will have to once again get on my soapbox...

From the internal publications I've read from UA the passengers will not notice too much change from a mainline economy experience to a Ted economy experience. Same beverages, same buy-onboard, some new colors of course and different (more hip and younger) video programming (comedies and music video).


Why Ted? Why offer an only-economy seating branch of a premium carrier?

The very essence of Ted is something like this:
(this is a condensed copy of what I have on another thread similar to this one)

The facts are that UA is targeting about 8.5 to 8.8 for their post-Ch. 11 CASM. UA's internal publications all say that's a reality due to the enormous wage and cost concessions we've gone through over the past two years.

The reason Shuttle wasn't an effective competitor on the West Coast against it's main target, WN, was that it was operated like mainline only with faster turns. That doesn't lower the CASM enough. The steps UA has gone through over the past two years: wage concessions, renegotiated and rejected leases and other cost cutting measures, THAT LOWERS CASM!

By offering 156 seats on the A320 it takes UA's lowered post ch-11 CASM and lowers it further for that division of the company. If the CASM is in the 8.5 region we can affectively compete against Frontier, B6 or WN in a number of markets, especially if you take into account our HUGE advantage of the rest of our own global network, the Star Alliance and our award winning Mileage Plus program.


Let's talk numbers!

  • Let's talk about the fastest growing segment of the flying public being the leisure traveler.


  • Let's talk about UA's former bread and butter, the "road warrior, million mile flier" and their recent tendency to spend less on travel or cut back in travel all together.


  • Let's also talk about UA's disproportionate exposure to LCC's compared with the other network carriers


  • Let's talk about a responsible answer to this ever-changing market environment!


  • Call it Ted, call it Mystery Mobile, JetOrange (or as LastBaron might say: Jet in the RED), just call it responsive to market conditions!

    If Nordstrom can react to changing retail market forces (the widening of the income gap between rich and poor) by opening the Nordstrom Rack, why can't a premium carrier with a competitive CASM reach for the LCC market successfully? Same logic! The market is changing, the company is reacting.

    The focus of Ted is to reach new leisure markets that we weren't affectively able to compete in. The focus is also to be on the offensive in the LCC world. UA has great reach into the business centers of the globe but not the premiere leisure markets. The Ted branch will enable us to cheaply and affectively reach those markets someday.

    It's designed to catch the savvy shopper who on Saturday goes to Neiman Marcus to pick up a few nice things and then Sunday goes to Target to buy their household staples because they know a good deal when they see it!

    OK, I'll get off my soap box

    FA4UA



    The debate continues... Starwood or Hyatt... which is better
    User currently offlineAviaction From Germany, joined Nov 2003, 256 posts, RR: 2
    Reply 7, posted (10 years 9 months 2 days 19 hours ago) and read 4901 times:

    With Ted, the Low cost off-shoot of United launching soon, I'm wondering, how are they going to differentiate the "Ted" product from the "United" product (other than the routes that they fly of course).

    With most short-haul flights offering no food service, and a beverage service that you pay for on both United and Ted, what is the difference for coach pax?


    Yes, it is a very valid question. Same as FA4UA (who has made many very accurate statements), I take the liberty of quoting myself. It was a post, by the way, which hasn't triggered a single reaction. Perhaps I should have joined the group of Ted-bashers, then at least I would have received a few "I agree" messenges.

    "The potential is there. As I said in a previous post, I am convinced a very suitable name has been chosen. It gives this airline a very distinct flavor. All current marketing activities add very strongly to this flavor, overall creating a distinctive product. Or rather a very "humane" product, ideally placed for the leisure traveller.

    However, and this is were I see the biggest problem, will United manage in "inhale" life into Ted? Will staff (on the ground and the air) carry the message? Will they be able (and WILLING) to create a Ted experience? Or will it for them only be a very "regular" UA flight ... just operated by a plane that has Ted written on it? This is my prime concern. With a crew of newly hired people, people you can mold, it would be much easier to create this special Ted image, from check-in to landing."

    Just my humble opinion.
    Humane flying for all of us  Smile/happy/getting dizzy
    Aviaction



    German by nationality, European by heart!
    User currently offlinePiedmontGirl From United States of America, joined Nov 2003, 1124 posts, RR: 13
    Reply 8, posted (10 years 9 months 2 days 18 hours ago) and read 4864 times:

    With 156 all coach seats on a 320 and 4 F/As, the service should be very, very good. There's not really any reason for it not to be.

    If UA will provide these F/As with the tools they need to do their TED thing, there should be little problem.

    In fact, if I were a UA F/A, I would be looking forward to working TED flights. Whatever it is that makes a "TED experience" should be simple to do. There are attitudes and behaviors that are part of good service, and there attitudes and behaviors that are part of bad service.

    As for hiring a bunch of new people for this: In order to do this, they would have to let people who are already working for UA go. This would mean having these people fired for absolutely no reason. UA already has a ton of people on furlough.

    The other thing is that the pilot and F/A contracts in this country generally contain what are called Scope Clauses. What this means is that airplanes owned directly by the company or leased by the company are to be operated by the employees of that company. Without these clauses, the airline could simply repaint the entire fleet with a new name and just fire all of the employees.

    See, when DL did Song, they just took 75s out of their fleet, repainted and reconfigured them, and called it Song. United is doing the same thing with TED. Neither one of these airlines have enough money to buy a bunch of new planes for this. UA is still in bankruptcy court and DL is bleeding money.


    User currently offlineAviaction From Germany, joined Nov 2003, 256 posts, RR: 2
    Reply 9, posted (10 years 9 months 2 days 18 hours ago) and read 4830 times:

    PiedmontGirl
    Good to have you "onboard" again. It is a pleasure.

    And, once again, you've summed it up nicely:

    "If UA will provide these F/As with the tools they need to do their TED thing, there should be little problem".

    Will provide UA these tools? Will they "educate" their staff? This is what I meant by saying "will they (the staff) be able to carry the messsage"?
    "Willing" referred to my opinion, that many of us (including) yours truly sometimes find it difficult to adopt procedures, one doesn't find convincing.

    Unfortunately, the corporate world is full of examples, where the big bosses came up with great ideas, excellent marketing people developed terrific campaigns ... unfortunately, no one ever bothered to explain the "rank and file" what this new concept, this idea, this brand is all about. Simply forgetting to inhale life into the new project, forgetting to make it a team effort.

    That's why I said it would be easier to hire new staff - because very simply, you've got to train them. In this case, the "message" would automatically be contained in the training they receive.

    With existing, dedicated and experienced staff members, sworn in to the new concept, Ted should be off to a flying start.

    Terrific flying to all of us  Smile/happy/getting dizzy
    Aviaction



    German by nationality, European by heart!
    User currently offlineRichard28 From United Kingdom, joined Aug 2003, 1618 posts, RR: 6
    Reply 10, posted (10 years 9 months 2 days 14 hours ago) and read 4745 times:

    Thanks for your responses people.

    I did not intend this to be a "Ted bashing thread", and thank you for your restraint!

    Based on Ted's future success (which has got to bit the corporate objective - hasn't it?), I can foresee two possible futures for United/Ted with this business plan:

    a) Ted becomes very successful, and is retained within United Group

    Great news, this will mean that the Ted brand and route structure will expand. However, surely they would not compete head on with United on the same routes?

    In which case, Ted would be unable to grow in many successful markets as its future growth is stifled by its parent - resulting in an ultimate loss to the competition.

    b) Ted becomes very successful, and is sold by United Group

    United could get a good return for their investment, however they would have introduced a new competitor, and a successful operation, which would then be free to compete head on with United.

    As experienced in the UK with BA/GO airlines, establishing an LCC-brand from a major gives the LCC immediate respect and a loyal customer base. This would be bad news for United's network - the last thing they need in Ch11 is another competitor on the horizon.



    In other words, I cannot see how the success of Ted can be good for United in the long run - I hope it succeeds, however this will come at a huge cost to United in the medium-long term.

    It seems to me that it is an example of a company's board of directors chasing the quick buck (possibly for personal gain), rather than long term value of the company.


    User currently offlineAviaction From Germany, joined Nov 2003, 256 posts, RR: 2
    Reply 11, posted (10 years 9 months 2 days 13 hours ago) and read 4645 times:

    Richard28

    Well, there is actually a third "future" for Ted:

    United might keep Ted as their niche carrier, let Ted serve routes that Ted can serve best. I know that this is quite contrary to the popular belief in GROWTH, but it's a possibility nonetheless. If they stick to their concept of offering flights mainly appealing to leisure travellers, fine-tuning their concept so that they create a very loyal clientele, Ted may become a relatively small, but consistently profitable branch (not the actual size matters, profitability is what counts).

    In a way, Lufthansa has made use of a similar approach years ago (before things got out of hand ... and before all common sense was sacrificed to the God of Growth). I am talking here about Lufthansa's co-operation with their subsidiary Condor.

    Gradually, Condor took over most leisure routes that Lufthansa had operated. Some Lufthansa flights had matter-of-factly turned into a "staff-and-family" shuttle to some Mediterranean resorts (I recall a weekly FRA- Heraklion service). It made a lot of commercial sense and offered a better choice to the holiday makers.

    Better flying to all of us  Smile/happy/getting dizzy
    Aviaction



    German by nationality, European by heart!
    User currently offlinePiedmontGirl From United States of America, joined Nov 2003, 1124 posts, RR: 13
    Reply 12, posted (10 years 9 months 2 days 12 hours ago) and read 4594 times:

    Actually, if TED were to be very successful, one might see TED get larger while United got smaller. TED is part of United Airlines. These shifts are possible -- depends on what's profitable and what's not. Ya know?  Smile

    User currently offlineLastBaron From United States of America, joined Oct 2003, 290 posts, RR: 2
    Reply 13, posted (10 years 9 months 2 days 12 hours ago) and read 4581 times:

    There is a foruth possibility here which, even though I will be labeled as the "bad guy" for mentioning it, is the most realistic IMO:

    TED will fail to distinguish itself in any manner whatsoever and will fail miserably and drag the parent, financially precasiously situated UAL farther down the pike than it already is. The outcome will be the quick and sudden collapse of UAL much like Swissair a while back. And then watch as there is a huge outcry and everyone in DC scrambles to prop up an airline that is responsible for its own demise, having fmade dumb decisions for over a decade now.

    Capitalism requires sacrifices. It doesn't produce only success stories. Not everyone can win. UAL is now on the "loser list" and TED is a very bad idea.


    User currently offlinePiedmontGirl From United States of America, joined Nov 2003, 1124 posts, RR: 13
    Reply 14, posted (10 years 9 months 2 days 12 hours ago) and read 4573 times:

    Actually what capitalism requires is extremely high ethics, a good business plan, and a very firm grip on reality.

    I'm not aware of UA's management having any of those attributes.


    User currently offlineCessna172RG From United States of America, joined Aug 2000, 749 posts, RR: 0
    Reply 15, posted (10 years 9 months 2 days 9 hours ago) and read 4414 times:

    You get to sit next to some guy named Ted, reading a newspaper and eating a bagel. Just hope he had deodorant...

    Ok, all kidding aside...

    I've seen Ted bashing, and lots of "oh my gosh, this is crazy" stuff. Honestly, I'm going to hold my tongue until I see what happens after Ted starts flying for United. Who knows, it may be a good thing, or it may be a flop. All of this is just mere speculation. Although it may not be the smartest move for United right now (still waiting to buy a liquidated A320 for a dollar), but if it works and turns their red margin into a green one, then that's great!

    The last thing we need now, whether you like United or not, is to see one more major air carrier fall out of the market. Let's hope that this is the start of the motion that saves United, before it becomes too late.



    Save the whales...for dinner!!!
    User currently offlineMariner From New Zealand, joined Nov 2001, 25169 posts, RR: 85
    Reply 16, posted (10 years 9 months 2 days 7 hours ago) and read 4379 times:
    Support Airliners.net - become a First Class Member!

    Cessna172RG:

    Not taking sides, but you say:

    "The last thing we need right now....is to see one or more major air carrier fall out of the market."

    I can't think of one major (legacy) carrier that has "fallen out of the market".

    They're all still there, in varying degrees of financial trouble. The big shake out that was supposed to come post 9/11 hasn't happened.

    It's the small fry - Vanguard, National, Midway, etc - that have gone.

    cheers

    mariner



    aeternum nauta
    User currently offlineEI A330-200 From Sweden, joined Apr 2001, 409 posts, RR: 4
    Reply 17, posted (10 years 9 months 2 days 7 hours ago) and read 4318 times:

    Mariner,

    I don't think he was talking about post-9-11 dropouts. I know of at least 2 "legacy" carriers that have fallen out of the market:

    1. PamAm
    2. TWA

    Just my intrepretation!!!!

    Aer Lingus Rocks!!!



    Long live Aer Lingus, the Flying Shamrock!
    User currently offlineCloudy From , joined Dec 1969, posts, RR:
    Reply 18, posted (10 years 9 months 2 days 1 hour ago) and read 4193 times:

    Suppose it works. Suppose they really do get the CASM they want on Ted. Suppose it becomes popular and effective. Will it save United? My guess is NO. It will have to few planes, not many ways to tranfer knowledge to the rest of the airline. And it would take years to start making real money even if everything goes well - and even then it would not be nearly enough to make a dent in the mainline's losses.

    If TED fails, could it kill United? My guess is YES. It could dilute the brand. It takes needed resources and management attention. It is yet another cause of labor strife.

    This does not seem to be a good risk to me. If you are going to risk the company in order to save it, risk it in such a way that the company really will be saved if you win. TED is a financial form of Russian roulette - a deadly game with not much of a prize even if you win.



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