thomas22

interesting Smisek interview in buying business travel.

Talks about open skies and how international first class is going away and how united is the market leader.

http://buyingbusinesstravel.com/feat...nited-airlines

Moderator note: Link leads to a sign-up pop-up, appears you can close the pop-up and read article without signing-up.

airzim

2 very interesting points in this article.

1) A definitive statement that GF is going away
2) 777X likely in the future

As for point #1, depending on what the new BF looks like this might lessen the blow.

bocastephen

Market leader? Maybe, but not what he might think UA currently leads in

Hubris like this is another clear indication of an inability to lead and manage.

cerealmarketer

Oh I can't wait to sit back and watch the responses from the gallery to this quote about international First Class.

"“It’s a money loser, and we will be eliminating it over time. For example the 767s that have it today, as they get retrofitted you will not see it reappear. The problem is that it takes a lot of real estate, and people are not willing to pay for that. I suspect the other carriers, apart from the subsidised Gulf airlines, would say the same thing.”"

spin88

the cluelessness about UAfkaCO's competitive posture is just stunning, two examples:

"So how does United differentiate itself from rivals? 'Ultimately, you have to have competitive product,' says Smisek. 'For example, the B767-300s, we are retrofitting those from nose to tail, with new flatbed business class seats, economy-plus and economy, wifi, streaming video. This will be a gorgeous and completely new product.'"

Come again? every other competitor is going direct isle access, and United is putting a SHORT (too small for anyone over about 5'10" to sleep in) version of an at this point about 10 year old seat on its planes. I have sat in that seat, and I will never pay to do so again....

Or

"And we’ve put back much better food in coach, free beer and wine, bottle of water, the sorts of things airlines had taken away. That makes us more competitive with global carriers in coach.”

I guess he has never flown OALs, if so he would know what the international food changes thread shows, which is that United is still bottom of the barrel.

This reminds me of the American Auto Industry, which prohibited its executives from owning or driving foreign cars. Jeff acts like he has only flown Spirit and then United Business and that is his only basis of comparison

kevanyalowitz

Another money loser will be me buying P fares instead of J/C/D fares when GF goes away or (hopefully) using GPUs and buying Y.

The regional airline mentality is killing UA. Downgrade the product and lose customers, which leads to pulling out of markets. This is what happened to PS and will happen in UA's high yield intl routes where they do sell F (SYD/HKG/NRT/LHR/FRA/GRU) when they go 2-cabin.

bseller

Fascinating.

He's happier flying into LHR than LGW. Wonder why it was good enough for pmCO?
But, he doesn't want F.

UNITED - Taking the Worst from Both of our Predecessor Airlines!!



Dave

bocastephen

Ah yes, another dig at the "subsidized Gulf carriers" by yet another clueless American carrier CEO who can't comprehend their own failing....so he suspects incorrectly, and misses the point that people are not willing to pay for UNITED's First Class product when it's priced similar to the vastly superior products listed below, and fails to recognize that UA GF is comparable to a Business seat with borderline coach meal service on many of these non Gulf subsidized airlines

However, I do recall the following airlines with successful First Class products are not necessarily "subsidized Gulf carriers"

1. Singapore Airlines
2. British Airways
3. Air France
4. Cathay Pacific
5. China Eastern
6. ANA (oops, a UA JV partner, how surprising )
7. Air China
8. Lufthansa (oops, a UA JV partner, how surprising )
9. Japan Airlines
10. Thai
11. Asiana
12. Korean Airlines

I suspect he never flew coach on Singapore Airlines which offers twice as many hot towel services, a nicer amenity kit and more meal entree options than UA Business First

Or maybe he thinks SQ is unfairly subsidized too?

I just don't get this level of cluelessness - does he really believe the gibberish he is spouting, or is this just marketing nonsense?

PsiFighter37

Ugh...I'm not really a disgruntled UA customer by any stretch, but he sounds completely clueless. I'm sure plenty of business customers buy J in hopes of applying an upgrade to GF. I have a feeling he does not connect the dots when he is thinking...

entropy

Most of those airlines are reducing F, and AF F is so limited I'm surprised you'd mention it. Airlines that have long enough flights and a high enough quality product to differentiate it from lie-flat C can make it work.

Not surprised he said F is going away. WE knew that before he opened his mouth.

bocastephen

I don't see "most of those airlines" reducing F - they may be modifying flight schedules to fit F where it's most appropriate, or limiting it to certain aircraft types and routes (British Airways being one good example) but most of these airlines have invested a substantial amount of money in upgraded F suite-style products.

cerealmarketer

I didn't think about it this way, but if you have JV partners on both oceans who provide a solid F product there's a lot less financial risk to cutting it on your own metal.

And UA is hardly slashing it. They're taking the low risk attrition approach.

Meanwhile AA is essentially ending F service to London - pulling most of the 773s from LHR and redeploying them to trans Pacific where they are thin and they don't have a JV partner.

At the end of the day I think there is still some legit corporate demand *from* Europe and Asia, but very little *from* the US. LH has the auto companies. Asia has...well Asia is like the US in the 80s.

Air France as noted is almost non existent.

And BA - well it is England after all.

minnyfly

I didn't see anything about "market leading". There was some nice insight in the article. But I am tired of hearing the ME3 complaining, and I don't agree with him that bankruptcy is not at all like a subsidy. It is.

blackllotus

That's true but that argument alone wouldn't justify having GF.

GF seats are definitely an upgrade from 2-4-2 business seats but if UA decides to catch up with other airlines and add 1-2-1 business seats then GF doesn't make much sense. It would be drastically less dense for a marginal incremental improvement.

edit: I'm talking from my POV in that last claim. I'd never pay to upgrade to GF if 1-2-1 business was available.

LaserSailor

Im sure they do too. Thats not buying F, which is exactly what he says is why it is going away. This is an easy call. I suspect all upgrade paths to J will go away over the next 5 years as all classes of flight domestic will be monetized.

If F goes away, will the business travelers all just fly in Y? Doubtful.

Ill take a lower price 2-4-2 over 1-2-1 anytime. Hey - maybe they should charge more for the outboards on 2-4-2!!