atlflyer
Posts: 567
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United Airlines New Competitive Advantage

Sat Jan 14, 2006 9:48 am

The WSJ had a great article today about how United will continually introduce new amenities and services as it enters bankruptcy. Here is the link for WSJ subscribers: http://online.wsj.com/article/SB1137...31145633.html?mod=home_page_one_us

Here are a couple paragraphs for those without a subscription:


Now United is gambling on a flight plan that takes it in the opposite direction of the rest of the U.S. industry. Determined not to be another clone of low-cost, low-fare juggernaut Southwest Airlines, United is making an all-out effort to raise revenue by pampering its best business travelers -- and keeping them on United whether they are flying to a meeting on the coast, or taking the family to Orlando.

In the face of rising fuel prices and continuing losses, competitors have cut back on frills and simplified their offerings across the board. United is keeping onboard blankets and pillows, making seating more spacious and designing new services for both the high and low ends of the market. The airline hopes these steps will allow it not only to charge more but to steal some customers from rivals, or, in the case of its new leisure division, Ted, to better compete with discounters.

"It doesn't take talent to take the pillows off" planes, says Mr. Tilton, a former oil-industry executive who has guided United since September 2002. "In the industry's herd mentality, we were supposed to trundle down the runway of commoditization," he says. "But if you're blessed with this network, to optimize it, you overlay an array of products that people want."

United has reduced the number of seats on more than 100 regional jets flying with its commuter affiliates so it could install roomier Economy Plus seating and first-class cabins -- the first time anyone in the industry has so broadly tried an upscale approach on such small jets. It radically cut the seating in a luxurious transcontinental service called "p.s." The extra room enables United to be the only airline that offers fully reclining, first-class seats on coast-to-coast flights. Now, following a big expansion of overseas routes, United also is planning a multimillion-dollar upgrade of its international first- and business-class cabins.

[Edited 2006-01-14 02:00:03]
 
777fan
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RE: United Airlines New Competitive Advantage

Sat Jan 14, 2006 9:54 am

Amen, UA! Seems to me like they're serious about getting back on track but can't afford to forget about customer service as it's often the ultimate factor in retaining customers.

Can't wait to see those new biz and first class interiors - some of UA's planes are in dire need of a freshening up.
DC-8 61/63/71 DC-9-30/50 MD-80/82/83 DC-10-10/30 MD-11 717 721/2 732/3/4/5/G/8/9 741/2/4 752 762/3 777 A306/319/20/33 AT
 
atlflyer
Posts: 567
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RE: United Airlines New Competitive Advantage

Sat Jan 14, 2006 9:59 am

I guess p.s. is profitable...

From WSJ:

But United is finding that more people are willing to pay $4,500 to fly first class on its new transcontinental p.s. offering, if they get top-notch service. That means personal DVD players, service carts decorated with fresh flowers and the fully reclining seats. Full-fare first-class ticket sales on the New York-San Francisco route are up 37% in p.s.'s first year, United says.

[Edited 2006-01-14 02:01:23]
 
jacobin777
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RE: United Airlines New Competitive Advantage

Sat Jan 14, 2006 10:11 am

Quoting ATLflyer (Reply 2):
But United is finding that more people are willing to pay $4,500 to fly first class on its new transcontinental p.s. offering, if they get top-notch service. That means personal DVD players, service carts decorated with fresh flowers and the fully reclining seats. Full-fare first-class ticket sales on the New York-San Francisco route are up 37% in p.s.'s first year, United says.

quite impressed as I wish UA well..but if the economy tapers off..then how will they be able to keep this up?
"Up the Irons!"
 
LAXintl
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RE: United Airlines New Competitive Advantage

Sat Jan 14, 2006 10:24 am

Longish tread in the subject already. WSJ: Article On United's Strategy (by ORD Jan 13 2006 in Civil Aviation)
From the desert to the sea, to all of Southern California
 
spyglass
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RE: United Airlines New Competitive Advantage

Sat Jan 14, 2006 10:37 am

Bankruptcy lets you try a lot of things you couldn't ordinarily do in this vein....or at least it used to....
 
IceTitan447
Posts: 450
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RE: United Airlines New Competitive Advantage

Sat Jan 14, 2006 10:46 am

Quoting Spyglass (Reply 5):
Bankruptcy lets you try a lot of things you couldn't ordinarily do in this vein....or at least it used to....

Very true, but it is refreshing to see an airline make such a bold move. I have always felt UAL was a trend starter, not on everything but on some cool stuff.

Hope the best for all at Ual!
 
aircanada014
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RE: United Airlines New Competitive Advantage

Sat Jan 14, 2006 11:54 am

I wish UA good luck as I did with AC. Lets hope they are as successful as AC.
 
uadc8contrail
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RE: United Airlines New Competitive Advantage

Sat Jan 14, 2006 5:06 pm

Quoting ATLflyer (Reply 2):
I guess p.s. is profitable...

From WSJ:

But United is finding that more people are willing to pay $4,500 to fly first class on its new transcontinental p.s. offering, if they get top-notch service. That means personal DVD players, service carts decorated with fresh flowers and the fully reclining seats. Full-fare first-class ticket sales on the New York-San Francisco route are up 37% in p.s.'s first year, United says.

ATLflyer,
did some comparison shopping and came up with some competitive fares on ua.
jfk-sfo one way fully refundable
aa-$1928.00
ua-$2269.00
i personally would pay the $341 and fly ua as the first class seats on ua are better than what aa has on the 762...

Quoting Spyglass (Reply 5):
Bankruptcy lets you try a lot of things you couldn't ordinarily do in this vein....or at least it used to....

i guess ch11 let ua become competitive(right sizing) or on the other hand made aa become more competitive on the trans con routes.....either way if you are flush with cash and need to get to the bay area in style i find it reasonable to pay 2k to get you there in comfort
bus driver.......move that bus:)
 
AASTEW
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RE: United Airlines New Competitive Advantage

Sat Jan 14, 2006 11:11 pm

Seems as though UAL is trying to emulate CO's product! Please be careful UAL, customers aren't product sensitive. It's all about that LOW FARE in the US airline industry. If it was all about profit CO would still be profitable.
 
UnitedTristar
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RE: United Airlines New Competitive Advantage

Sat Jan 14, 2006 11:31 pm

Quoting AASTEW (Reply 9):
Seems as though UAL is trying to emulate CO's product!

I don't even know where to start telling you how wrong you are with that statement. CO has nothing even close to the PS product. Nothing even close to E+. Nothing even close to United's new intl F/C products.

Please explain your self!

-m

 airplane 
 
ual777
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 12:29 am

Quoting Jacobin777 (Reply 3):

quite impressed as I wish UA well..but if the economy tapers off..then how will they be able to keep

If the economy tapers off, consumers will dump AA's crap service and jump to the better service...in this case UA.
It is always darkest before the sun comes up.
 
jacobin777
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 1:08 am

Quoting UAL777 (Reply 11):
If the economy tapers off, consumers will dump AA's crap service and jump to the better service...in this case UA.

respectfully disagree...people will go for the cheapest/lowest fare...not pay for the "extras".....thats where the problem is...
"Up the Irons!"
 
CTHEWORLD
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 1:27 am

Quoting AASTEW (Reply 9):
Seems as though UAL is trying to emulate CO's product! Please be careful UAL, customers aren't product sensitive. It's all about that LOW FARE in the US airline industry. If it was all about profit CO would still be profitable.

CO and UAL, 2 class cabin vs 3 class cabin, sleeper seat vs non-sleeper etc etc etc... Additionally most of the seats sold in the two front cabin on p.s. are sold to customers who have companies have contracts with UAL, not just johnny leisure traveler, if that were the case, they would put TED planes on the route.
 
Alias1024
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 1:28 am

Quoting AASTEW (Reply 9):
Please be careful UAL, customers aren't product sensitive.

Business travelers are product sensitive. If you fly frequently, you begin to care about things like schedule, onboard service, free upgrades, and preboarding. Some business travelers are willing to pay more to fly on an airline with a better product. This has been the strategy of CO, and is why their yields are among the highest of all airlines in the country.

It looks like UA has decided to adopt the same strategy. Good move, as UA has a lot to offer business travelers. Great network, E+, PS on a few routes. Now if they would just get rid of Ted.
It is a mistake to think you can solve any major problems with just potatoes.
 
mrstl
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 1:35 am

It seems that AA and UA are headed in two different directions. I am glad to hear that at least two airlines CO and UA are still offering a respectable premium product as AA's at times has really gone downhill. All that being said it will be interesting to see who is ultimately most successful. Not everyone chooses price over service. I for one will pay somewhat more for better service. Maybe both will be successful as they serve different market niches. Time to do a status match on UA and give them a try. How is the first class on the RJ's or is it economy plus?
 
LMP737
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 2:00 am

Quoting MrSTL (Reply 15):
It seems that AA and UA are headed in two different directions. I am glad to hear that at least two airlines CO and UA are still offering a respectable premium product as AA's at times has really gone downhill. All that being said it will be interesting to see who is ultimately most successful. Not everyone chooses price over service. I for one will pay somewhat more for better service. Maybe both will be successful as they serve different market niches. Time to do a status match on UA and give them a try. How is the first class on the RJ's or is it economy plus?

Just to let you know starting this year AA is installing lie flat biz class seats on their 767's. Along with that on the "old style" 767's new overhead bins, new sidewall paneling and improved IFE. Next year lie flat biz class seats will be installed on their 777's. So as you can see AA is not necessarily sitting around twiddling their thumbs.

To all the folks at UAL it's nice to see that you guys are finally getting out of the woods. Best of luck.
Never take financial advice from co-workers.
 
atlflyer
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 2:19 am

Does anyone have any idea what UA's new First and Business class seats will look like? I would imagine that their business product will be similiar to First on p.s. I hope they recover all the economy seats too, so they are atleast all us the same fabric or leather.

I wonder if a new IFE with AVOD is in the works as well? Thoughts?
 
tozairport
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 2:32 am

Quoting LMP737 (Reply 16):
To all the folks at UAL it's nice to see that you guys are finally getting out of the woods. Best of luck.

Thank you and right back at ya! By the way, you can take financial advice from co-workers. You just have to do a "George" and do the exact opposite of what they recommend. Works every time!  bigthumbsup 
Meet the new boss, same as the old boss.
 
ual777
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 2:45 am

Quoting MrSTL (Reply 15):
How is the first class on the RJ's or is it economy plus?

Its not bad. The seats are leather. Its not as comfortable as main-line, but it is a helluva lot better than sitting in a regular RJ or regular coach seat.

BTW, regular economy plus ROCKS!
It is always darkest before the sun comes up.
 
jacobin777
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 3:22 am

hey......rather than saying "mine is better than yours" or "air carrier xyz is better than carrier lmnop"......at least we should be grateful we have a plethora of options to a vast amount of destinations at a very low price....can't say that about too many other things (well..besides computers and most other electronics)
"Up the Irons!"
 
flyguy595
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 3:26 am

Quoting MrSTL (Reply 15):
How is the first class on the RJ's or is it economy plus?


I flew on ExPlus From CHS to ORD and was some impresses with it. I had the biggest snack box I had seen probably ever with great FA's service constant refills and even got a Hot towel which is a commodity I have grown to forget about. The Front is quiet and can barely tell your flying comparable to a 747 first in quiet not size but its definitely a great stretch for a 6'4" person like myself. Keep it up UA!!!
 
ual777
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 4:01 am

Quoting Jacobin777 (Reply 20):
hey......rather than saying "mine is better than yours" or "air carrier xyz is better than carrier lmnop"......at least we should be grateful we have a plethora of options to a vast amount of destinations at a very low price....can't say that about too many other things (well..besides computers and most other electronics)

You're right. Im glad I have the options available to me when I fly so when I am on UA I learn to appreciate it  Wink
It is always darkest before the sun comes up.
 
incitatus
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 4:43 am

Quoting Alias1024 (Reply 14):
Business travelers are product sensitive. If you fly frequently, you begin to care about things like schedule, onboard service, free upgrades, and preboarding. Some business travelers are willing to pay more to fly on an airline with a better product. This has been the strategy of CO, and is why their yields are among the highest of all airlines in the country.

For the most part this statement is not accurate. Yes business travelers are product sensitive. But it almost boils down to the schedule. Frequently the decision on business travel is made because of a corporate contract, or the travel policy clauses that state that the traveler has to go on the cheapest flight available relative to comparable choices. Often the decision will be take carrier XX for $1105 as opposed to carrier YY for $1110.

This thread is grossly misnamed. A product feature that competitors can catch on in a few weeks or months is not a competitive advantage. In this case, United is just driving all competitors to improve in amenities. In the end the relative differences will be small and everybody ends up with smaller profits due to higher costs. Real competitive advantages are slots and gates in desirable airports, low costs, high efficiency, corporate contracts.

Tilton should know. There has never been a brand of gas station that focused on selling "de-luxe gas".
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fxramper
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 7:11 am

Quoting Uadc8contrail (Reply 8):
i personally would pay the $341 and fly ua as the first class seats on ua are better than what aa has on the 762...

 checkmark 

Couldn't agree more, and there are people on there that claim to be frequent flyers of transcons and try and make a case for AA being better that UA.

Laughable.

Last time I checked, AA was only operating 762 on high density transcons and 757s outta BOS MIA to LAX SFO etc.

Regards.
 
CTHEWORLD
Posts: 463
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 7:27 am

Quoting Incitatus (Reply 23):
Tilton should know. There has never been a brand of gas station that focused on selling "de-luxe gas".

This comment is so blatantly wrong, I don't even know where to start, or if it dignifies a rebuttal.
 
BMIFlyer
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 7:41 am

United is a great airline, and is why I have continued to fly on them.

The international product does need updating yes, but right now, having flown in C and Y on the international fleet, I can say that at the moment i don't have any faults with it. Hopefully when the fleet upgrade is complete i will sample the new C class and write a report on it.

Now for the internal flights....

Having flown on P.S in both Y and C, I can vouch that it is a great product, and its good to hear it is making money for the airline.

I will be sampling TED during March, so I will give you my verdict on that product in due course  Smile

Long live UA Big grin You are a great airline and you have great employees  Smile

Keep up the great work.



Lee
Sometimes You Can't Make It On Your Own
 
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Stitch
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 7:47 am

Quoting Incitatus (Reply 23):
Yes business travelers are product sensitive. But it almost boils down to the schedule. Frequently the decision on business travel is made because of a corporate contract, or the travel policy clauses that state that the traveler has to go on the cheapest flight available relative to comparable choices. Often the decision will be take carrier XX for $1105 as opposed to carrier YY for $1110.

Do not forget the power of frequent flier programs and elite status to business travellers. Unlike leisure travellers, businessfolk do not spend their own dime on flights so price is irrelevant to them (though it may very well not be for their employer). However, even employers understand the value of elite status for their employees, since it makes them more productive - that First Class seat or 35" of legroom in UA Economy Plus allows them to use their laptop or spread out their work. That club membership allows them to work, instead of loiter in the terminal. Those elite check-in and security lines let them spend more time with the client, and less time standing in line.

All of those benefits are worth far, far more then $5 to the employer.

Quote:
A product feature that competitors can catch on in a few weeks or months is not a competitive advantage.

CO, DL, and NW have all chosen and committed to their international premium Business Class product. They are not in a position to rip it out to match UA, who will most likely have truly horizontal lie-flat seats in Business. And none of them offer a First Class cabin. So UA will have a better Business Class and First Class. And while AA is looking at a new Business Class cabin for their 767/777 fleet, only their 777s have First and they only fly to a handful of destinations (LON/NRT/?).

Quote:
In this case, United is just driving all competitors to improve in amenities. In the end the relative differences will be small and everybody ends up with smaller profits due to higher costs.

Yes, they can all match UA for onboard catering and onboard amenities. And they either offer advanced IFE or could put it in. But they're still going to be at a disadvantage in the seat, and in the end, that is what matters the most to customers - especially customers paying full-fare First, Business and Economy.

Quote:
Real competitive advantages are slots and gates in desirable airports, low costs, high efficiency, corporate contracts.

And if you can add best in class service on top of that...

Quote:
Tilton should know. There has never been a brand of gas station that focused on selling "de-luxe gas".

"Premium Gas" made the oil companies a great deal of money over the years.
 
DLKAPA
Posts: 7962
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 8:21 am

Quoting ATLflyer (Thread starter):
The WSJ had a great article today about how United will continually introduce new amenities and services as it enters bankruptcy.

Why are you posting a 3 year old article?  Silly

Quoting AASTEW (Reply 9):
If it was all about profit CO would still be profitable.

Uhhh dude you realise that CO is profitable...right? I mean I want to think you're joking cause that statement made me laugh...but I really don't think you are...

Quoting Incitatus (Reply 23):
A product feature that competitors can catch on in a few weeks or months is not a competitive advantage.

The product feature isn't, however the ability to run that product feature profitably is. Just look at what happened to FlyI.

Quoting Incitatus (Reply 23):
Real competitive advantages are slots and gates in desirable airports, low costs, high efficiency, corporate contracts.

All of which UA has already  Wink
And all at once the crowd begins to sing: Sometimes the hardest thing and the right thing are the same
 
jacobin777
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Joined: Sat Sep 11, 2004 6:29 pm

RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 8:44 am

Quoting FXramper (Reply 24):
Last time I checked, AA was only operating 762 on high density transcons and 757s outta BOS MIA to LAX SFO etc

incorrect, AA use a plethora of planes....only BOS-west coast doesn't use a twin..and 763's are used for transcon flights....
"Up the Irons!"
 
halls120
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Joined: Sun Jun 05, 2005 3:24 am

RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 8:56 am

Quoting Stitch (Reply 27):
However, even employers understand the value of elite status for their employees, since it makes them more productive - that First Class seat or 35" of legroom in UA Economy Plus allows them to use their laptop or spread out their work. That club membership allows them to work, instead of loiter in the terminal. Those elite check-in and security lines let them spend more time with the client, and less time standing in line.

All of those benefits are worth far, far more then $5 to the employer

Couldn't agree more. When I'm on UA in E+, I can use the laptop and get work done. On DL and AA in coach, forget it, unless I can snag an exit row.

Quoting Stitch (Reply 27):
Yes, they can all match UA for onboard catering and onboard amenities. And they either offer advanced IFE or could put it in. But they're still going to be at a disadvantage in the seat, and in the end, that is what matters the most to customers - especially customers paying full-fare First, Business and Economy.

On short (2hr or less) trips, I can fly AA or DL and not miss UA. Anything longer, and I always pick UA. People can say all they want about extra 4" not mattering, but it does. And when I fly across the pond on UA, they almost always move elites up front to C if there is room - and often for nothing.

Once I was on a business trip and brought along my SO. She had to come back to the states early. I asked UA if she could have an E+ seat, but they were already booked - so they gave her an window seat and blocked the aisle (it was a 777) so she'd be comfortable.

United may have its faults, but not working to maintain customer loyalty isn't one of them.
"Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." Mark Twain, a Biography
 
atlflyer
Posts: 567
Joined: Wed Jan 11, 2006 11:13 am

RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 9:12 am

Incitatus: Sorry, but this thread is not "grossly misnamed."

Here is the definition of a competitive advantage:

"A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices."

United is offering a greater number of services than other airlines and is charging higher ticket prices...

Southwest's competitive advantage would be the first part of that definition (value through low prices) while United's is the second half (slightly higher prices with more services/amenities offered).
 
DTWAGENT
Posts: 753
Joined: Tue Jan 10, 2006 1:16 am

RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 10:08 am

UA is doing something different then other carriers. I know that on ORD-HNL or ORD-OGG services they are still offering a free decent meal in economy class. Where as AA charges for the food that is in a box and you don't know what you are getting. My wife and I are looking at going to Hawaii for our 20 wedding anniversary and we will be flying either UA or DL first class. Better seats and benefits. If you really want to look at things. The airlines would not be in such bad shape if they started paying out a commission to travel agents. Look at the ones that are and how well they are doing. Like Airtran, allegiant, Spirit.....They are all kicking everyones butt because the know the travel agent can make or break them...... Just some food for thought..
 
FA4UA
Posts: 777
Joined: Sat Nov 22, 2003 6:26 pm

RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 1:27 pm

Quoting DTWAGENT (Reply 32):
I know that on ORD-HNL or ORD-OGG services they are still offering a free decent meal in economy class.

Excluding PS, all complementary meal service ceased in June 05 domestically including our Hawaiian flights. We do offer a variety of snack boxes and fresh salads and sandwiches for purchase on our transcon (non-ps) and Hawaiian markets. Flights less than Transcon length but greater than 2.5 hrs have four snack boxes for purchase.

FA4UA
The debate continues... Starwood or Hyatt... which is better
 
uadc8contrail
Posts: 1636
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RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 2:35 pm

Quoting DTWAGENT (Reply 32):
The airlines would not be in such bad shape if they started paying out a commission to travel agents. Look at the ones that are and how well they are doing. Like Airtran, allegiant, Spirit.....They are all kicking everyones butt because the know the travel agent can make or break them...... Just some food for thought..

DTW,
WN,CO &AA are still making cash and they stopped paying out commision...give airtran and the others a few quarters of positive cash flow and they will tell the tvl agents to forget about it as the money can be made via the internet....question for any air tran or spirit employee in here...does your respective carrier have in house res or outsourced res?????
bus driver.......move that bus:)
 
incitatus
Posts: 2691
Joined: Wed Feb 09, 2005 1:49 am

RE: United Airlines New Competitive Advantage

Sun Jan 15, 2006 4:13 pm

Quoting ATLflyer (Reply 31):
Incitatus: Sorry, but this thread is not "grossly misnamed."

Here is the definition of a competitive advantage:

"A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices."

United is offering a greater number of services than other airlines and is charging higher ticket prices...

Southwest's competitive advantage would be the first part of that definition (value through low prices) while United's is the second half (slightly higher prices with more services/amenities offered).

Which is unsustainable. Thus it has no staying power and can't be described as a competitive advantage.

Quoting DLKAPA (Reply 28):
Quoting Incitatus (Reply 23):
Real competitive advantages are slots and gates in desirable airports, low costs, high efficiency, corporate contracts.

All of which UA has already

Slots in desirable airports, yes, United has them and has been selling. Low costs, yes, they have it. High efficiency, no they haven't. Corporate contracts, yes they have, but fewer than they used to.
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