Yes, getting to drive the deicing truck was the highlight of my visit to United Airlines last week. But that was on Thursday; Friday offered up the opportunity to meet with a number of executives from the company and ask pretty much any questions we wanted of them. Sure, not all the questions were answered in our favor, but it was great to have that access to everyone from the CEO down to department level managers. I asked a few questions of my own but mostly just listened to the others and to the answers and I came away with a whole lot of information. Really almost too much to process in many ways, but I’ll try to parse out the useful bits and split it up by category.
If you are interested in what Jeff Smisek has to say about the state of the company vis a vis some of its most obsessive and vocal critics, I recommend watching the recording of his keynote embedded below. I wish he would have been more direct on a couple of the issues rather than skirting them. But overall I remain impressed by his direct, no nonsense approach to running the business. I don’t necessarily like all the answers, but I appreciate that he’s willing to give them without wavering and because he believes they’re in the best interests of the company.
Beyond that, there are a few interesting bits of information which came up in the other sessions throughout the day. Here’s my take on them, split by category.
United’s social media efforts have lagged their peers for a while now. It turns out that probably had something to do with the Social Media team being part of their marketing group rather than as part of the product team. That changed over the summer and, while the evidence of progress has been scarce thus far, they’ve got big plans on the horizon. The group is now managed by a direct report to Mark Bergsrud, SVP of Product, with a staff sized to handle the responsibilities. Also, the team will include employees from across the organization. This includes members of the reservations group. While it remains to be seen just how actively they are able to get involved on any specific incident, the plans suggest that United is going to try to catch up to the others in a big way. When pressed for details on a timeline the answer was "weeks" which is actually better than I expected.
The lounges are too crowded, the amenities are mediocre and the wifi is slow. The concerns about the lounges haven’t really changed all that much over the years. Bergsrud addressed the inquiries with a few updates:
- O’Hare will be getting a new 12,000 square foot lounge in Terminal 2 later this year. That should help with the crowding issues there.
- San Francisco will get a new lounge when the renovations of the old terminal are completed. That’s going to take a while yet, but it is in the plans and the construction is already started.
- Newark doesn’t have a lot of space for new construction so that’s the main limitation to expansion right now.
- Los Angeles will undergo a major renovation effort starting in 2014 and lounges will be addressed as part of that.
- Dulles is a problem and they know it. Conversations are ongoing with the MWAA but don’t hold your breath at this point.
Regarding the wifi performance concerns, the migration off of the T-Mobile systems is complete. They are working on building additional monitoring platforms now so they can react in real-time to slowness and other connectivity issues.
Beyond that, don’t expect any additional airports to have lounges opening anytime soon. They’re pretty comfortable with the lounge network they have.
In-flight Entertainment & Connectivity
The company is very happy with the entertainment systems they have in place, particularly on their long-haul fleet. For in-flight internet connectivity they accept that they are currently slow on the adoption but they are also confident that waiting will allow them to leapfrog the competition. The plan is still to have 300-350 planes outfitted with satellite-based connectivity by the end of 2013. This will allow for internet service on nearly all routes, save for some in China and on Polar flights.
There is one A319 currently with the Panasonic wifi kit installed but not active, pending FAA certification. There is also a 747 in the shop getting fitted for connectivity. As part of the 747 fitting they are also installing streaming media servers on-board for so-called bring your own device ("BYOD") service. The BYOD content will be free for passengers in all cabins, just like the AVOD systems on the other aircraft. No word on power plugs in economy on the 747s, mostly because I forgot to ask.
Regarding the aircraft conversions, there are only 2 767-400s still pending the new seats and 7 777-200s which will receive the IPTE international flat-bed configuration. The 777-200s which will receive the new Hawaii configuration will start in 2013.
Pretty much every passenger wants a bigger, better seat with more amenities in the air and on the ground. It doesn’t appear that United is going to be pursuing that path. That’s not to say that they won’t remain competitive – they are the leader in business class flat beds flying these days – but they don’t plan to be running in front. As Bergsrud said, "We are not going to differentiate through pitch or through width or hard product." Essentially that’s a cash-heavy requirement and they’ll constantly be passed by others in the investment cycles. So they’ll remain competitive in the seats but look to win elsewhere.
There are two main areas where Bergsrud indicated that such effort will be invested. The first is in the route network. That’s been the party line pretty much since the merger and that was the first thing out of his mouth when asked the question. I don’t expect that to change any time soon. The other area they expect to excel is in technology. "We are going to differentiate ourselves through IT.… We should be able to spend a little more money on our website than Alaska." A noble goal, but it is going to take some work. They plan a number of small updates to the website in the coming months with a major redesign happening later in 2013. And there will be a number of back-end updates as well; they are still running different systems for some legacy United versus Continental operations.
The session on the MileagePlus was probably the most contentious of the day. There were many questions asked about upgrades, how many people are at each level, how often upgrades happen and why United Club memberships cannot be purchased with points. Unfortunately there weren’t a ton of answers offered. Part of that is that many of the questions were about things which I wouldn’t have expected to be answered. And part of it was about who was running the session. Such is life.
Overall it was a very informative set of sessions. Lots of information to process and plenty of things to think about. And United stuck to their guns on a number of topics. As I’d expect a business to do.