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WSJ: Article On United's Strategy  
User currently offlineORD From United States of America, joined Jul 1999, 1389 posts, RR: 1
Posted (8 years 10 months 3 weeks 5 hours ago) and read 5954 times:

The cover article in today's Wall Street Journal is about United and its strategy of differentiation/perks that most other airlines have gotten rid of. It's an interesting article. Key parts:

p.s. service - After the first year, flights are profitable because the 757s are 14% cheaper to operate and revenue is up 1%. Demand for first class is so great (full-fare first class ticket sales on JFK-SFO are up 37%) that additional flights may be added on the JFK-LAX and SFO routes. One guy, who was an AA frequent flyer for 20 years, switched to United p.s. because he got fed up with the cost cutting and service lapses at AA. He says for some people it's either United p.s. or a private jet.

Economy Plus - Upgrade revenue doubled last year and is expected to double again this year to $50 million. The program will break even this year, but that doesn't take into account the flyers United feels it would lose if it did away with the program.

Ted - Delivered an opearting profit with costs fully allocated, ending losses on some of United's busiest routes. Market share is up and Ted had an 84% load factor last year.

49 replies: All unread, showing first 25:
 
User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Reply 1, posted (8 years 10 months 3 weeks 5 hours ago) and read 5932 times:

Here's a link to the online version, however this is a pay site:

http://online.wsj.com/article/SB1137...31145633.html?mod=home_page_one_us


User currently offlinePilottim747 From United States of America, joined Jul 2001, 1607 posts, RR: 5
Reply 2, posted (8 years 10 months 3 weeks 2 hours ago) and read 5750 times:

Quoting ORD (Thread starter):
Economy Plus - Upgrade revenue doubled last year and is expected to double again this year to $50 million. The program will break even this year, but that doesn't take into account the flyers United feels it would lose if it did away with the program.

The article says that John Tague, executive vice president of marketing, sales and revenue, did the number cruching and proved to the other execs that this program is worth keeping.

Pretty surprising that just the paid upgrades alone let this program break even. I'm sure that with all the elite travelers United retains due to Economy Plus the program makes a lot of money for United. UA and CO are normally voted the best for elite travelers (in the United States that is).

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pilottim747



Aviation Photographers & Enthusiasts--Coordinate your life.
User currently offlineWesternA318 From United States of America, joined Oct 2004, 5713 posts, RR: 24
Reply 3, posted (8 years 10 months 3 weeks 2 hours ago) and read 5717 times:

I saw one of the A320's in the new scheme in SLC yesterday, almost (read ALMOST) made me wanna look on UA's site for a ticket. Nice planes though...


Check out my blog at fl310travel.blogspot.com!
User currently offlineHoya From United States of America, joined Jun 2004, 416 posts, RR: 0
Reply 4, posted (8 years 10 months 3 weeks 2 hours ago) and read 5677 times:

A lot of people have criticized and still criticize UA for diversifying its product. Though I'm unable to read the whole article, it seems like UA is proving its critics wrong and its strategy is succeeding. TED apparently is not failing, and P.S. has achieved its intended goal.

My only question about the EconomyPlus though is this: how much of that extra revenue is due to TED? Obviously the only 'upgrade' on Ted is from regular economy to economy plus. How much are the Eco+ upgrades helping TED's revenues?



Hoya Saxa!!
User currently offlineIkramerica From United States of America, joined May 2005, 21562 posts, RR: 59
Reply 5, posted (8 years 10 months 3 weeks 2 hours ago) and read 5650 times:

I think AA should take a note of this (though they aren't in BK). They offer a 3-class jet but are cutting back on 3-class service.

CO is fitting more and more 757s with BF seats, and my guess (not confirmed) is once they have critical mass there, maybe once they get the AVOD in, they will start to advertise BUSINESSFIRST EWR-LAX on all flights. No more 753 or 738 on that route.

I'd like to see CO try the economy plus idea. Currently their jets have X number of rows that are "blue" for elite customers, but it would be interesting if they were to pull out one row on most jets and offer 5 rows of 37" Y+ instead. Also, eliminate auto upgrade from full Y to F for silver elite, but place anyone who books full Y (or any elite who books H) into Y+ seats when available. Silver would still be eligible for standby and 1 day upgrade, but should be "happy" with Y+ otherwise. Gold and Platinum would still be automatically put in F if available, but would be in Y+ if F was not open at booking.

They need not alter seat width, either, just add pitch (and power ports on narrowbodies). On domestic and international flights, 37" pitch with a nicer seat and leg rest would be appreciate.

The reason Y+ can pay off with the few purchases seats is because unless the flight is filling up those final missing 6 to 9 seats, the added revenue isn't really missed, but the added revenue of Y+ and goodwill by offering more "premium" seats to FF customers is important. And internationally



Of all the things to worry about... the Wookie has no pants.
User currently offlineFriendlySkies From United States of America, joined Aug 2004, 4120 posts, RR: 5
Reply 6, posted (8 years 10 months 3 weeks 2 hours ago) and read 5647 times:

I'm glad to finally see some positive light on UA from the WSJ. This is a testament to the efforts UA has made in bankruptcy to improve it's onboard product and overall service levels, and those efforts have paid off big time. Way to go UA!

Quoting WesternA318 (Reply 3):
The day every UA, DL and B6 employee see their airlines implode on themselves, I throw a BIG party

It's really sickening that you want to see all those employees out of a job...they didn't do anything wrong.


User currently offlineTango-Bravo From United States of America, joined Jun 2001, 3806 posts, RR: 29
Reply 7, posted (8 years 10 months 3 weeks 2 hours ago) and read 5573 times:

Quoting ORD (Thread starter):
Economy Plus - Upgrade revenue doubled last year and is expected to double again this year to $50 million. The program will break even this year, but that doesn't take into account the flyers United feels it would lose if it did away with the program.

How, in as few words as possible, is profit/loss calculated for Economy Plus? Any such figures would seem to depend on ambiguities and speculations such as "how many more seats might have been sold had there been an extra row or two or three of standard coach seating in place of E+?" Revenue from pax that might have been lost were it no for E+ would seem, if anything, an even more elusive figure to quantify.


User currently offlineLaxintl From United States of America, joined May 2000, 26026 posts, RR: 50
Reply 8, posted (8 years 10 months 3 weeks 1 hour ago) and read 5525 times:

The hard WSJ $50 million figure calculation for E+ has to do with the revenue premium over standard economy fares UA has been able to generate to get bums in those seats versus if the aircraft simply had regular Econ seats.
Basically E+ product has allowed UA to generate additional incremental revenues.

Indeed it is elusive to properly quantify what gain/loss there might have been without the E+ product, however feelings clearly are that the product has helped earn additional passenger volume and revenue then not having been offering the product.

While many have criticized UA, in my opinion they have done a good job in tailoring products such as TED, p.s., E+, and EXplus to specific market needs.



From the desert to the sea, to all of Southern California
User currently offlineTozairport From United States of America, joined Oct 2005, 686 posts, RR: 1
Reply 9, posted (8 years 10 months 3 weeks 1 hour ago) and read 5458 times:

Quoting WesternA318 (Reply 3):


The day every UA, DL and B6 employee see their airlines implode on themselves, I throw a BIG party

You're a jerk. In fact (this is where everything I want to say to you would go, but the words I would use would get me kicked off A.net).

So in summary, you're a jerk.



Meet the new boss, same as the old boss.
User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Reply 10, posted (8 years 10 months 3 weeks 1 hour ago) and read 5392 times:

Quoting Laxintl (Reply 8):
While many have criticized UA, in my opinion they have done a good job in tailoring products such as TED, p.s., E+, and EXplus to specific market needs.

I have to agree with your assessment. They've certainly won me back as a regular customer after a two-year period when I avoided them if possible.


User currently offlineFlightopsguy From United States of America, joined Jan 2005, 348 posts, RR: 0
Reply 11, posted (8 years 10 months 2 weeks 6 days 23 hours ago) and read 5272 times:

E+ is offered by the CSR's and also when you check in using the kiosk. I would assume the offer ($) figures in whether the elites have already gotten their upgrades. My spouse (next to top elite) gets her upgrades the day before the flight. You can also buy a full year of E+ for you and a companion...dunno what the price is...maybe $100? Anyway, it guarantees you E+ seats if they are available.


A300-330 BAC111/146/J31/41 B99/1900 CV580 B707-777 DC8/9/10 L188/1011 FH227/28/100 SB340 DO228 EMB2/170 CR2-900 SH330-60
User currently offlineLightsaber From United States of America, joined Jan 2005, 13446 posts, RR: 100
Reply 12, posted (8 years 10 months 2 weeks 6 days 23 hours ago) and read 5252 times:
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Quoting FriendlySkies (Reply 6):
I'm glad to finally see some positive light on UA from the WSJ. This is a testament to the efforts UA has made in bankruptcy to improve it's onboard product and overall service levels, and those efforts have paid off big time. Way to go UA!

Focusing on the positive, I'm very happy to see UA has found a proactive niche and is profiting from it.

Quoting Ikramerica (Reply 5):
CO is fitting more and more 757s with BF seats, and my guess (not confirmed) is once they have critical mass there, maybe once they get the AVOD in, they will start to advertise BUSINESSFIRST EWR-LAX on all flights. No more 753 or 738 on that route.

I agree CO should get on that premium market too (fits in with their overall strategy). However, I could see the 738's upgraded with BF (if they don't have it already) and kept on the route to keep frequency. The 753's... I'm not sure where their ideal home is...

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 13, posted (8 years 10 months 2 weeks 6 days 23 hours ago) and read 5227 times:

Quoting Lightsaber (Reply 12):
Focusing on the positive, I'm very happy to see UA has found a proactive niche and is profiting from it.

Could this be...I mean, could the U.S. carriers be "rediscovering" onboard service?
 Wink

This is great publicity for UA when they really need it. I could NEVER imagine the U.S. aviation landscape without United Air Lines.



"When all is said and done, more will be said than done".
User currently offlineWesternA318 From United States of America, joined Oct 2004, 5713 posts, RR: 24
Reply 14, posted (8 years 10 months 2 weeks 6 days 23 hours ago) and read 5227 times:

It would be a good thing to see CO fitting 738's on the EWR-LAX route with BusinessFirst exclusively. I believe the 757-300's are just used for routes that need extra capacity, such as Florida or Las Vegas perhaps?

Quote:
It's really sickening that you want to see all those employees out of a job...they didn't do anything wrong.



It's not the people I want out of their jobs. Its those specific companies. I stand to make quite a bit if those three companies fold.



Check out my blog at fl310travel.blogspot.com!
User currently offlineCTHEWORLD From Mayotte, joined Dec 2004, 478 posts, RR: 2
Reply 15, posted (8 years 10 months 2 weeks 6 days 22 hours ago) and read 5155 times:

Quoting WesternA318 (Reply 14):
It's not the people I want out of their jobs. Its those specific companies. I stand to make quite a bit if those three companies fold.

great, so 120,000 people lose their jobs/have their lives completely disrupted just so you can make a buck? You are one sick, greedy individual!


User currently offlineHoosierCFI From United States of America, joined Jan 2006, 96 posts, RR: 0
Reply 16, posted (8 years 10 months 2 weeks 6 days 22 hours ago) and read 5122 times:

I still think that the article should have mentioned UA's international business product is below most other international carrier. Any more, it doesn't take much to be the best US carrier.

User currently offlineWesternA318 From United States of America, joined Oct 2004, 5713 posts, RR: 24
Reply 17, posted (8 years 10 months 2 weeks 6 days 22 hours ago) and read 5115 times:

Look,

when/IF those airlines fail, the employees might apply at CO and/or F9, if they get hired, which would be great, then thats great. No matter how it turns out, I'm laughing all the way to the bank.  laughing 



Check out my blog at fl310travel.blogspot.com!
User currently offlineCommavia From United States of America, joined Apr 2005, 11840 posts, RR: 62
Reply 18, posted (8 years 10 months 2 weeks 6 days 22 hours ago) and read 5099 times:

Quoting Ikramerica (Reply 5):
I think AA should take a note of this (though they aren't in BK). They offer a 3-class jet but are cutting back on 3-class service.

Money talks.

While I'm happy for United and its dedicated employees if they have found a 3-class transcon product they are happy with, but American has seen absolutely no hit from United's introduction of p.s. American has seen no impact whatsoever from the new United product.


User currently offlineWesternA318 From United States of America, joined Oct 2004, 5713 posts, RR: 24
Reply 19, posted (8 years 10 months 2 weeks 6 days 22 hours ago) and read 5084 times:

Could it be because UA is using a smaller plane on the route? Or there's just THAT much demand from JFK to the West Coast? I've never actually looked at AA's routes from JFK


Check out my blog at fl310travel.blogspot.com!
User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 59
Reply 20, posted (8 years 10 months 2 weeks 6 days 21 hours ago) and read 5028 times:

Quoting WesternA318 (Reply 19):
Could it be because UA is using a smaller plane on the route? Or there's just THAT much demand from JFK to the West Coast? I've never actually looked at AA's routes from JFK

JFK-SFO=5x/daily-2X763's and 3x762's.......7:15 a.m. to 6:00 p.m.
JFK-LAX=11x/daily-all 762's...7:00 am to 7:00 p.m.
JFK-SEA=1x/daily-757-200

no direct JFK-PDX, JFK-LAS, and JFK-DEN flights



"Up the Irons!"
User currently offlineTozairport From United States of America, joined Oct 2005, 686 posts, RR: 1
Reply 21, posted (8 years 10 months 2 weeks 6 days 21 hours ago) and read 5014 times:

Quoting WesternA318 (Reply 14):
It's not the people I want out of their jobs. Its those specific companies. I stand to make quite a bit if those three companies fold.



Quoting WesternA318 (Reply 17):
No matter how it turns out, I'm laughing all the way to the bank.

My God, man. You had better duck because your head is so over-inflated that it has it's own gravitational pull. You're likely to get hit by an asteroid or something. UA is not going anywhere. In fact, with UA exiting BK within days, WN coming to DEN, and you being a consultant for them, F9 is most likely doomed. Then UA will buy CO and you will be looking for a jobby job at Walmart. Now THAT will be the happiest day of my life!  bigthumbsup 



Meet the new boss, same as the old boss.
User currently offlineWesternA318 From United States of America, joined Oct 2004, 5713 posts, RR: 24
Reply 22, posted (8 years 10 months 2 weeks 6 days 20 hours ago) and read 4971 times:

Hence why i said IF those airlines fail. I doubt they will.


Check out my blog at fl310travel.blogspot.com!
User currently offlineEWROwznj00 From , joined Dec 1969, posts, RR:
Reply 23, posted (8 years 10 months 2 weeks 6 days 17 hours ago) and read 4749 times:

Quoting HoosierCFI (Reply 16):
I still think that the article should have mentioned UA's international business product is below most other international carrier. Any more, it doesn't take much to be the best US carrier.

As far as I know, the international business product hasn't been upgraded in a while. Hopefully, when they have their house in order, they can work on that. Does anyone know how UA is performing on their international routes?


User currently offlineTCFC424 From United States of America, joined Nov 2003, 517 posts, RR: 2
Reply 24, posted (8 years 10 months 2 weeks 6 days 17 hours ago) and read 4701 times:

I don't think the figures would be that ambiguous. In accounting, things are taken into consideration including average load factor, upgrades to F, etc. These things are quantifiable and could easily be figured when you have the numbers in front of you. What is hard to compute is how many loyal passengers the program has gained/lost...passengers can take surveys, but for most Americans, the company that gets the business is the one with the lowest price (excepting of course business travelers).

I believe CO is using 753's on heavy routes that are low yield...no reason to upgrade John Q. Traveler because we are oversold in Y and way undersold in F...I believe the official term is yield management. I flew on a CO 753 from LAX to IAH in late 2004 and found it very nice, especially compared to the DL 762 from OGG to LAX...like night and day.


25 Gkpetery : GO UAL!!!! I've flown p.s. and Ted and I think they do a great job at both ends of the spectrum. If I'm flying a long-haul flight like LAX-JFK, I want
26 United737522 : UA upgraded me to E+ on a 777 without even letting me know. There was a problem since I had lost the original seat I had due to an error on their part
27 Post contains images Jacobin777 : I flew UA in the 90's trans-Atlantic a boat-load of times...a few years later, when I checked the status of my UA FF miles, much to my dismay, they s
28 WesternA318 : Jacobin777, Ive had the same experiences on United during the 90's. The service was hideous, and Ive sworn off flying UAL because of several JFK-LAX a
29 Markabcan : That is a very complicated question and there are many answers! It probably involves a Net Present Value calculation of the cost of implementing the
30 Post contains images Mariner : Since Frontier has been gaining market share at DEN since Ted first started flying, i wonder why they are doomed? cheers mariner
31 UAL777UK : They will start to upgrade the fleet especially international later in the year with the capital expenditure ($400m) they have set aside. Once those
32 Mainliner : Nice to see UA getting shown in a positive light, for once. I've always felt that they are one of the only carriers to maintain a level of class and s
33 Ual777 : UA overall has a much better standard of service than AA. I just got back from MDE(missed the a380 by 1 day because they had engine problems before th
34 Nbseer : United won me as a big fan when, at check-in at Narita, my daughter and I were cheerfully upgraded to Economy Plus at no extra charge for our flight t
35 Jacobin777 : WesternA318....maybe their service has improved over the years....one day I'll give them a try again......
36 CTHEWORLD : Read the other articles out there, wherein i t highlights UAL will be spending $400mil on product improvements, mostly on International Business and
37 CTHEWORLD : One day in the 70's I was flying on CO and my meal was cold, so I swore them off. One time on the 80's HP was late, so I swore them off. One time on t
38 Post contains images Cgnnrw : BRAVO!!!!!!!
39 Tozairport : CTHEWORLD - That was perfect! Well said! The main reason they are doomed is because they have ego-boy WesternA318 consulting for them. Otherwise, the
40 SNATH : Jacobin777, For what it is worth: Work forces me to mainly fly on AA. I have just under 115,000 miles with them. They expire on 01/01/09. So, if I fo
41 Post contains images Jacobin777 : Snath..I flew AA qutie a bit in the 90's also, and that is why I decided change fully from UA to AA (not saying that traveling on AA is like first cl
42 Post contains images Sumsonic : Quoting Pilottim747 "The article says that John Tague, executive vice president of marketing, sales and revenue, did the number cruching and proved to
43 SNATH : Good for you! But you did make it sound as if it was the FF miles that did it in your previous post. Anyway... Safe flying! Tony
44 Post contains images WesternA318 : Jacobin777: I am scheduled to take a P.S. flight next month, we'll see how it goes, although as previously mentioned, I almost bought a ticket on UA t
45 Post contains links and images Jacobin777 : WesternA318....there is a good probabilty I'll be tyring them again this year too! I have to admit, I like UA's new paint scheme.... have fun on your
46 Uadc8contrail : CTHEWORLD, have held to my promise that i nor my family ever fly hp again after they screwed us(and 14 other paxs) in phx on xmas eve a few yrs back.
47 WesternA318 : Thanks Jacob, where are you flying to?
48 Uadc8contrail : contradicting yourself arent you???? TOZ, where have i missed that western is a airline consultant in this thread other than a cheerleader for a 3x b
49 Post contains images WesternA318 : LMAO UADC8, I was only in Jr. High when Lorenzo left CO. They brought me on as a consultant from 2002 until last year. The only reason I consult with
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