Here's your chance to join the fray and be heard. You can respond to my columns and share your own opinions and insight.
Phil from Dover, NH writes : There is one other area that we might also look at. We are all too familiar with the sour pussed agent and too forgetful of the very pleasant person who went the extra distance to help out. I think Holiday Inn and now USAirways have a GREAT idea. They send out special postcards to their most loyal customers and ask them to search out the agent or representative who has really tried to put their best foot forward. They recognize these people for their efforts. I have found that in my business the person who puts their best foot forward is the person everyone tries to aspire to copy. Holiday Inn provides a ribbon with each card for the employee to wear with pride. This too inspires everyone to exceed expectations and have at least one ribbon to show off. I would be much happier with any airline whose employees made that extra effort.
Last week I flew three legs on UAL for the first time in over a year… My experience with the people of United was pitiful, the people were the problem. We had no problems with the planes, the seats, or the on time departures and arrivals. It was the people of United who had chips on their shoulders, and attitudes to match.
Industry consultant Tom Ronell writes : I just attended the aircraft finance conference in NYC this week. Carrier after carrier made presentations demonstrating their being in denial: each one picked out some statistics which showed that they sucked less than the other five (Southwest and other low cost carriers were never included on the charts, except by ATA). They all felt that they simply had to do nothing other than outlive their rivals (sort of like the meeting the bear in the woods joke, where you only have to be faster than your buddy, not faster than the bear.)
They unanimously stated that UA's bankruptcy would cause UA to take enough capacity out of the market for them to all raise their fares back to compensatory levels at their costs. It never occurred to them that the AirTrans and Jet Blues of the world will grow into that vacuum and that nobody will go back to paying $1400 to go from NYC to Chicago. It's like going out of a parking lot; if you try to go back, your tires get shredded by that device in the ground. Or it's like car buyers, who will no longer buy without incentives. Bottom line: the majors feel that they have done all they need to do, that as soon as 8-13% capacity is taken out of the market and business travelers come back, fares will come back up, and as a side benefit, UA will give them an excuse to beat up on their unions.
They also felt that they are so superior to the low cost carriers, that people will prefer to fly on the majors and pay a premium for the privilege. Ditto for a low-cost subsidiary that is associated with a major.
Anyway, that should answer your question about why people think UA's bankruptcy will cause costs to go down and fares to go up.
By the way, congratulations on being the very first journalist to focus upon McKinsey's role in all these bankruptcies around the world. How do they get away with it? They are like the Dr. Death of airlines! And why does UA management need them to come up with a "vision" for the airlines? Unbelievable!
Another anonymous airline industry insider writes : Who's going to do the definitive expose' on McKinsey's use of the word processor (OK, now, universal replace: Swissair (and partners) with Varig with Delta with United -- let alone Enron -- all Word Docs and PowerPoints) in 'strategically advising' the airline industry into a smoking hole? For those kind of fees. No other term for it than "CEO-controlled Flight Into Terrain" (CFIT -- check for it in NTSB reports).
Rodney writes : I agree with everything you said in the article. I fly about 350,000 miles a year, 1K million on United and Platinum on American (since my clients are all over the globe) and used to be in the airline business, so I have seen both sides of the fences (sort of speak). I would like to add two other crucial components to the list.
1) The procurement of goods and services. Yes, the airline industry cost structure is heavier towards the labor side compared to other major industries and I agree United's labor costs are way out of whack, but they also need to look at the costs of goods and services.
Case in point. United decided to cut Champagne about a month ago on their domestic routes. I started talking to the flight attendant about why they did it and she told me that the catering company puts these bottles on-board with the wine and charges for all of it regardless of whether it is used or not. Since hardly anyone drinks Champagne compared to regular wine, United cut out the Champagne.
Well, as one of the major customers to United, (the catering company), why can't they manage the bottles of Wine and Champagne like they do the rest of the alcohol? It is very easy. Stick the unused unopened bottles in one drawer, let catering re-stock them on the next flight or next day or next week....they don't "expire" in a short period of time. Just like the miniatures of alcohol on-board.
I know this is small potatoes compared to the bigger picture on the cost of goods and services, but it both shows how a poorly managed situation has flowed through to reducing the quality of service to their VIP passengers, and also begs the question.....what other goods and services are not getting managed? This is one area - evaluating the procurement of indirect and direct materials - that I do for clients, and invariably I secure cost savings of 10-15% on ALL the goods and services spend. Imagine what the number would be for United when you are looking at fuel, spare parts, MRO, general supplies, etc. It adds up FAST.
2) The "accounting" process/evaluation. As a consultant working with Fortune 100 companies and a former Airline advisor to the COO of a major International Airline, there are a few shortcomings with the way bean counters look at things and the decisions that are made as a result.
Instead of looking at the "total value" of the operating cost for a piece of equipment, they usually focus either too much on the depreciations side of the equation (for the write-offs), instead at the cost of capital (i.e. the procurement of new planes), and then they are usually way too optimistic on the on-going maintenance cost and total cost of operating cost of new planes compared to the ones they already have.
We have only been around the 777's for less than 10 years now, (where most other planes United operates, with the exception of the Airbus's, which by the way, are already running into a lot more operating/maintenance cost than anyone expected this early in the ball game and have been a big disappointment on the maintenance and reliability side) so until we hit the 15-20 year mark, you really can't get an accurate take on what the true cost would be. I will say this about the 777's. The reliability on them has been better than any other aircraft going, but don't assume it will be that way after 15-20 years.....It could change. With the 747's, (that are parked in the desert), you can have accurate numbers. That is why with United having a fleet age of somewhere around 7-8 years, they haven't had real accurate cost on the maintenance of these planes (going forward) because there is not a lot of history with them.
This is a contributing factor to why United is bleeding far more than the analysts thought they were and it is also the same reason why the ATSB rejected the bailout package, optimistic expectations (cost side and revenue to cover it) which all goes back to "questionable accounting" measures.
Lynne writes : I travel very often for both business and pleasure. I lived in an eastern European country for 3 years on a job assignment that ended a year and a half ago and traveled all over Europe on all kinds of airlines.
I was traveling on business in the US in 2001, before 9/11 and traveled to and/or transitioned through Denver and other United "hubs". I have never experienced longer lines, slower service, more inept personnel, or less comfortable flights than I have with United Airlines, and this was before the extra security requirements were enacted!
Since then, when I have had a choice of airlines for the schedule and place I need to go to, United is my last choice. There was more efficiency on Tarom Airlines, which is the Romanian airline! If my experiences are typical, I am not in the least surprised it is in bankruptcy on top of its mismanaged labor woes.
Kent from Downers Grove writes : Although you have a lot of good ideas, the thing that I keep reading is that business fares are still too high. That's why so many business flyers are looking for leisure fares.
But think about this, business flyers usually don't gripe about the price of hotels and rental cars, except for places like New York.
Obviously, hotels and car rental companies must be pricing their products at amounts that business travelers find reasonable. But while Hyatt may price rooms at $69 to $119 on weekends or during very slow periods, they don't price rooms that low on days that large numbers of business travelers are staying.
I think that the Big Six need to focus on pricing fares affordably for business flyers, and cut back on leisure fares. Of course, fares should be cheap from Friday at 7 pm to Sunday at 1pm. But if you want to fly at 7 am on a Monday, you will pay what the business flyer pays.
Southwest now charges a maximum of $299 one way. Obviously, the Big Six can't do that. But they should quit trying to get 50% of their revenue from 10% of the passengers.
One other idea would be to allow flyers, who get to elite status, to be able to buy tickets for family vacations at better-than-published-leisure fares. Granted, the people who only fly for leisure will be mad, but who keeps the airline flying? The business flyer.
David replies : Just a quick comment about your hotel room rate analogy. Hotels are 'wising up'. It is common for hotels to now have as many different rates as airlines have - although the spread from the lowest to the highest rate for the same hotel room is not nearly as great as it is for a seat on a plane. You'll likely find that many hotels will sell otherwise unsaleable rooms at discount rates, even on business nights of the week.
These rates are often well 'hidden' and are sold in a way that protects the apparent integrity of their published rates. How do hotels achieve this? One way is to sell through Priceline.com; another is to sell through leisure wholesalers that package the room cost up with other touring or traveling items so that the actual low rate is obscured as part of a total package that would have no appeal to a business traveler.
Mike writes : I can't speak from much recent experience on United. My wife and I took our extended family to Europe two years ago and it was so uncomfortable we decided simply to scratch UA from our list of preferred airlines. We haven't missed United a bit. Unless they return seat pitch to a healthy number, we would not fly United for reasons of personal health.
David replies : In fairness to United, I don't think that their seating is profoundly much worse than any of the other airlines - they are all dreadful, and DVT (from sitting too long in cramped seating) is a new issue that must have all airlines very worried. The exception to this of course is American Airlines and their 'more room in coach'. But, I wouldn't know about United - it has been a very long time since I last flew them to Europe, also! :)
Gina writes : We were loyal United Fliers with hundreds of thousands of miles on the carrier but quit flying with them after 9/11. We were onboard a United Flight to Tucson on that fateful day - when they closed down all the airports, the flight had to divert to Denver.
Due to all the uncertainties, we rented a car and drove home to Chicago rather than on to Tucson. United refunded only a portion of our flight saying that they had, after all, flown us to Denver. Trouble is, we were not going to Denver and felt that we should have been reimbursed the entire flight as other carriers did for their passengers that day. We have switched to American and love the extra leg room.
Jerry writes : I saw something I had never before experienced on a recent United flight. I am a 1K. After the flight took off the flight attendant handed me and several other passengers one of the captain's business cards on which he had hand written, "Mr. Heisler, I see that you are a 1K and I want to thank you for your business".
What a great thing to do to a loyal customer. I have never seen it done before and it was so easy for him to do.
David adds : When I used to regularly fly Qantas in their premium cabins (ah, the good old days!) one of the highlights of every flight was when the captain would walk through the cabin and stop to talk with every passenger.
I do agree that very little things like what your captain did on the United flight can provide enormous benefits to United in return. It should be encouraged.
Jerry replies : I agree. But unfortunately, with United or any other airline, the service experience is not consistent. Among the dumb things United and the others have recently done to discourage people from flying is the 63" limit on bags and the resultant $80 charge to a passenger who obviously has no alternative. Experienced travelers know that a skycap is the way around that one.
Another stupid idea is their refusal to allow an upgrade on a free ticket. I offered to upgrade last week and would have paid about $200 in coupons I purchased...but was not permitted to do so. Thus they flew with an empty business class seat and instead of getting $200 in revenue, were content with my flying for free.
And then there is the fact that if your plans change your ticket becomes worthless. Great way to reward 1K's or anyone else for that matter.
Travel Agent Laurie writes : As a travel agent I enjoy reading your opinions of how United could survive, but what was that final slam about how we could "prove our value to them". Do we not save them reservationist costs, ticketing agents and advice givers for free now?
My present attitude is who really cares if the BIG SIX survive as they have forced so many travel agencies out of business. I have no problems with internet fares as many people will not put their credit card on line and they want a human being to suggest itineraries and dates.
David replies : I've been an ardent and consistent supporter of the travel industry in this forum and elsewhere, and I don't think that my suggestion that United should return to paying some type of commission to travel agencies constitutes a 'slam' on the travel agency community!
However, much as we each recognize and value the importance of the services that a travel agency provides, variously to its clients and to the airlines, that doesn’t mean that we should blind ourselves with our own world-view so that we can’t see things from the airlines' perspective.
In case you haven’t noticed (!) United and the other airlines don’t perceive any preponderance of value-add at all in the things you list - they could care less if travel agencies exist or not, and so they zeroed out your commission. If they did value your services, then they’d pay you - in some form or another - so as to get you to continue providing these services. But the services you mention (when considered as part of the totality of travel agencies and their relationship to airlines) are not sufficient to make travel agents a net adder of value to airlines and their marketing distribution schemes. It is impossible to argue against the ugly reality of this situation, no matter what we both might variously wish and think.
However, one thing that any airline will always crawl over broken glass for is true increased business, which is most clearly demonstrated in the form of a greater than normal market share. Maybe there are other things that you as a travel agent do which you think are valuable, and which cost you money, but the only thing that an airline values these days is extra business.
If I was you, and negotiating with an airline to get some type of payments from it (and, believe me, I've 'been there and done that' many many times) then I'd base my line of negotiation on the basis of giving the airline more business, not on saving it the bother of selling directly.
Travel Agent Bert adds : I agree with you that the airlines no longer value the added items that a travel agent brings. The Big Six have been in trouble since they started cutting services in the hopes the traveling public ( and especially the business traveler ) would not notice. I remember years back that one of the BS noticed they could' make' another million dollars by taking olives off the salad. We as agents did not pay attention, and shortly we became the next way to make more while delivering less. I find it interesting that South West continues to pay agents and make a profit.
Chris Elliott suggests that you hire a professional security service to keep you advised of weather ,war and other things your travel agent used to do, included in the price of the ticket. BTW many clients still expect free services we no longer offer. I don't know where this will end up but I have noticed that the appearance of long distance riders on Greyhound is improving by leaps and bounds. Let's see - less hassle with security, unlimited use of electronics, and lower price. Maybe the bus will overcome the greed of the upper management! Value is only what someone will pay for or what someone perceives.
Gary writes : I am amazed that these companies do not sell prepaid tickets in books or mileage to generate money beforehand. Companies could save money for flights, they could have extra money in house.
David replies : Some airlines sometimes do (or did) offer such promotions. It is a great idea, because not all tickets are ever redeemed, so the airlines get some money totally for free, and it also then compels the purchaser of the prepaid tickets to actually fly with that airline rather than another airline.
But would you feel good about buying tickets that you didn't plan to use for almost a year on one of the very financially shaky airlines out there at present? This is the Catch-22 of this type of scheme. Offering prepaid tickets usually signals a desperate cash shortage, and that means that sometimes it does more harm than good because it reduces overall confidence in the airline.
Lan writes : Why is there little mention in even the excellent comments of yourself and Joe about how the long term anger being directed against "Un-United Airlines: (UUAL) by former premiers is deliberately targeted to foil any recovery from bankruptcy?
For over a year now I've been going out of my way to avoid UUAL - even driving the extra half hour to Long Beach Airport for a JetBlue flight (versus an LAX United flight). I write my congressman/women about once a week to say "no bailout money for UUAL." Colleagues who ask my advice on travel (and a few who actually pay me - although in real life I'm a software salesman) receive detailed information on why and how to avoid using UUAL. Avoiding UUAL is particularly important to companies which are hiring young, inexperienced traveling staff who might be tempted into starting as a UUAL frequent flyer and then cost their company millions in lost money and time by trying to always fly UUAL for the miles.
There is nothing CEO Glenn Tilton can do to 'redeem' UUAL. Even when their fare is among the lowest I choose a 'non-UUAL' flight and even avoid Star as part of this activity.
As a UUAL Premiere Executive I was victimized by arrogant staff, deliberately cancelled flights (to re-route me onto other UUAL flights), delays and high ticket prices. For too long, I put up with it to worship the God of Miles.
But I'm a grown-up now! I'm one of the most dangerous people to the UUAL system - an intelligent, experienced, senior executive business traveler with a long term hobby of pushing UUAL out of the travel industry. Nothing pleases me more than to read how many UUAL staff are being laid-off. I hope that at least some of them are the individuals who helped mess up my personal and business life. I also enjoy walking past a line of UUAL passengers waiting for a delayed flight to my on-time carrier. UUAL should call their clients 'victims' not passengers.
How determined and vindictive am I against UUAL? While helping to choose a travel agent for a large company recently, I dropped from consideration two agencies (two large agencies) whose sales figures showed a large concentration of UUAL ticket sales. When my legislator's travel analyst called for 'background information' on UUAL I used your column and others to provide details of delays and to demonstrate the anger and stupidities of UUAL.
Even if Tilton himself visited me to ask what it would take for me to return to UUAL I'd tell him - "you can't." United's failure, hopefully it's permanent removal from the airline industry should stand as a warning to all others that there is a long-term penalty when there's long-term abuse. Do I really believe it'll happen? Probably not - large corporations have a way of manipulating legislators and money sources to "recover" their operations - but I'll never be onboard....and I know I'm not alone in this hobby!
David replies : I felt a bit uncomfortable with Lan's negativism, but the simple fact is that this is an accurate self-portrayal of the way that Lan - and presumably others - do feel. It proves the well known claim that one unhappy customer is ten times more damaging than is one happy customer beneficial.
While of course United should do all it can to make us all happy customers, their first priority has to be to stop making formerly valuable customers unhappy. And I do hope that, when (if?) United does finally get its act consistently together, maybe then, recognizing new management, new values, new everything, Lan might give them another try.
Jose writes : As an American frequent flier, I get packets of little coupons. When I recognize really good service, I tear one of these off, put my FF number and name and a comment, and give it to the responsible person. I have done this with FA’s (most often), a couple of counter agents, and even mailed one for an outstanding Platinum service center phone agent. It’s amazing how much positive response a little piece of paper will get (I think they can “spend” the paper at the employee store, and it may do something for their personnel folder, but I’m not sure). (Good thing they have these, too - a couple of letters, and almost every e-mail, to customer service, go unanswered, even by forms.)
I do not fly United - I have done so a few times and have been appalled at the counter, security (when they operated it), the baggage templates, the cabin service, the surliness, the disorganization, and the plain lies when it came to trip delays or cancellations- especially with the “Shuttle by United” which keeps rising from the grave and is deserving of a final stake through the heart. And as a 6’4” / 196 cm pax, I may think American has a way to go, but the More Leg Room has been a huge incentive for me to keep flying them.
Peter writes from 'downunder' : What a pity you are not the CEO of UAL. If you were I would probably keep flying with them. The main feature that would keep me with UA would be your enhancements to the FF program (Mileage Plus). Your other suggestions would certainly be helpful also.
Unfortunately, I don't believe that UA's management and unions have sufficient understanding of their current predicament or vision for the future. After all, it was the pilots in 2000 who just about brought the airline to its knees and set the scene for what's happening today (their leader said he would strangle the golden goose within an inch of its life) and I don't see them willingly giving up a penny of their $300,000 salaries. Also, it seems the mechanics are determined to destroy the company, come what may (as Eastern's mechanics did way back when).
So, alas, even though I think your ideas are terrific, I am a little pessimistic about most of them seeing light of day (but we can always hope...).
As for the mothballed 747's, maybe it's a ploy to get rid of the senior 747 captains, who must be costing a mint, or maybe it's just incompetence. Another problem is that UA's 777's don't have the range of the 747-400's, so they can't be used for non-stops to places like Aussie or Singapore (but I did fly on their 777's last month AKL-LAX-AKL). As a passenger I know I prefer the 777, as the seating layout is much better and it's not quite as big and impersonal. I must say I prefer the 767 best of all (no middle seat in Business class).
Let's hope someone senior at UA reads your artice and decides to implement a few of your suggestions.
Bonnie from New York writes : One question...did you send this article and the feedback to the CEO of United? Maybe at last the big guns will listen at last, for a change, to the little pistols who fly their airline.
Why don't the executives of major airlines ask travel agents what the public wants? They would get lots of feedback for nothing and maybe the right (or at least better) answers to their problems. Do any of these guys at the top have a clue as to what people want???? I think they just don't care as long as they can line their pockets and run to the bank with big fat checks on pay day. Just sign me fed and and disgusted with all airlines in New York. Thanks!
David replies : I didn't send the article to United because they either don't care; or else would consider it beneath them to consider free advice when they can pay $1.5 million a month instead to receive doubtful advice from industry outsiders. Consultants have a saying that is invariably proven true - 'advice is valued at what the client pays for it', and on that scale, the McKinsey advice is plainly very much more valuable than mine.
However, although I didn't send the article to United, other people have! So maybe something will come of it. But I doubt it.
Chuck from Bath, MI, writes : The thoughts in your column certainly brought to mind what I saw yesterday at ORD as a United passenger. Where were the 757's? There seemed to be nothing but A 319's and A 320's at the gates. At this rate they will be down to RJ's making 1500 mile flights for them.
As a 1K member for many years I have my doubts they will survive this crisis. I have never heard of a more dumb idea than trying to revive the Shuttle. Another dumb idea is to reward those who have not earned 1K status in the past 12 months by having their butt's in the seats for all of their miles. Some of us have not needed "mileage runs" to achieve our figures. However, I will admit I have received 8 or 9 business cards from pilots thanking the 1K's for being with them on their particular flight.
It will be interesting to see if United (or any other airline) will buy your ideas.
One last thought. I have a zillion miler son who flies Continental and constantly tells me their employees appear to be genuinely pleased he is flying with them. I have not found this to be the case with United over the past 3 or 4 years.
A travel agent writes : We have a couple that purchased United Airlines tickets to travel on December 18, 2002. The husband had to have open heart surgery on December 11, 2002. United Airlines customer service will give the husband 30 days to rebook, but the wife not. The wife is out of luck. Can you believe this attitude?! I am sure they will never again travel on United Airlines.
Tabby writes from California : United needs to give customers a good reason to fly with them. And a temporary fare cut for limited types of fares isn't going to do it. If they really want the customers, they need to :
1. Rip out seats and increase the pitch on all their seats, not just a few on each plane.
2. Simplify the fare structure and lower business fares to somewhere near those of the carriers like Southwest and Jet Blue.
3. Don't annoy the customers with unjustifiable fees and arcane rules such as
4. Don't raise the miles required for frequent flier tickets and at some point near the time of the flight the rule should be "If you have the miles and we have a seat... it's yours!" It doesn't cost them a significant amount to fill that otherwise empty seat and the plane is going whether someone sits in it or not. And there should be no extra charges for redeeming miles at a date near to the flight. With all of these transactions being electronic, there is no justification for any fees to use or reinstate miles.
5. Mileage based upgrade rules should be the same for partner flights operating as a code share as for a "real" United flight.
6. Move away from the hub and spoke system and bring as many passengers where they want to go with just one flight.
7. On routes where there is enough demand, use bigger planes slightly less often. The odds are, with less flights at large airports like O'Hare, more of them will take off on time instead of sitting on the ground burning fuel on the taxiway.
A reader sent in a copy of my column to United's Customer Relations email address. This reply was sent back three working days later - a commendably fast reply, even if it is 99% standard 'boilerplate' : Thank you for your message. First and foremost, I want you to know we continue to focus on running a safe and reliable airline and on delivering quality service. You may be assured that United will honor your reservations now and in the future. Throughout our reorganization under Chapter 11, United will fly. You will continue to have access to worldwide markets for your business and pleasure travel needs flying with United, United Express and our Star Alliance and codeshare partners. And, all of our customer programs including Mileage Plus will provide you ongoing travel benefits that are most important to you.
We have worked extremely hard these past months and made significant strides in improving our service. In fact, you may have noticed United ranked number one among all airlines for on-time performance by the Department of Transportation. And this was the second time in the last four months that we have attained this ranking.
We remain 80,000 optimistic and passionate people firmly committed to our most important asset - you. And we'll treat you like our future depends on it. You are the key to our success. With your continued friendship and support, United will be here for you now and in the future.
I will forward your suggestions to the proper management office for their future use. Thank you.
For the most up-to-date information, we encourage you to visit our homepage at www.united.com often. We look forward to serving you again soon. Thanks as always for flying with United.
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Copyright 2002 by David M Rowell.
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