United Airlines CEO Jeff Smisek presented today at the Deutsche Bank Aviation and Transportation Conference. Some key nuggets of his presentation (a .pdf of his powerpoint is available on the United website):
- They’re paying just 2% more for jet fuel than they were in 2008, and they’re profitable. I wonder what the point of ‘fuel surcharges’ is then, they should have been able to build ‘jet fuel’ into their base costs. Of course it’s partly just a convenient quick and dirty way of adjusting prices across-the-board for a market rather than filing whole sets of new fares in each market.
- Reducing capacity. Of course the merger was going to shrink compared to United and Continental, no matter what sorts of protestations were offered before the merger closed.
- 90 million members of MileagePlus. I had heard that number and knew it was at least 70 or 80 million, but it’s interesting to see that confirmed.
- Dynamic pricing of ancillary revenue. That’s one of the reasons United says they wanted Shares, that they could customize this feature more easily compared to the non-owned Apollo system they were using previously. This means, for instance, the ability to vary pricing on upgrades at check-in.
- The new graphical interface for United’s computer reservation system rolling out October 1. So no more DOS screen commands that all of the legacy United agents had been asked to learn.
The graphic shows a buy up to first class being offered for $99 to the fictional elite passenger (and family?) on this reservation. That won’t make some observers happy…
The new graphical interface for SHARES is certainly something that folks have looked forward to and pinned a lot of hopes on, that it would help agents completely unfamiliar with the systems to do their jobs more easily. But at the same time any new systems rollout can lead to delays and glitches along the way. And with a new graphical interface, versus working directly at the command line, one wonders whether the processing speed of the computer terminals is up to the task of handling tasks quickly. We’ll know in a few weeks!
Well, the Gold elite buying up to a B fare for ~$100 isn’t so far fetched. That is wants to charge them for bags as an elite is clearly wrong. And the sample routing is absolutely bizarre.
They’re selling upgrades for the family and they aren’t even ticketed yet 😉 look at the flight coupon statuses — “HK” means the seats are on hold awaiting ticketing.
Looks like a decent UI, but, I wonder if this is going to remove any/all flexibility from agents if they’re restricted to the scenarios implemented in here.
Also don’t forget it shows they are already in BusinessFirst on that route (though it doesn’t exist on those routes) and it wants to charge for bags or an upgrade to E+ or F, though they’re assigned in Y… Yep looks like SHARES
Why is 2008 the relevant comparison year for jet fuel prices and pre-tax earnings?
I also learned that MileagePlus is a high-margin part of their business, try as we do to make that not the case.
The 2008 fuel price is relevant because in 2008 the airlines lost billions, yet now, with the same fuel prices, they are making pre-tax money.
And when you are doing mockups, it isn’t necessarily a real life situation, you just throw in some data that might pop and to get the styling right. At least that is my experience.
The popup menus have a distinct Mac OS X appearance. 😉
united is by far the best FF program.
just booked an awesome flight maximizing united’s generous routing rules for award flights for my girlfriend and I next summer, sadly in economy though.
First Leg: CLT -> TOKYO NRT flying both the Singapore and Lufthansa A380 JFK->FRA->NRT with Tokyo being the final Destination
OPEN JAW 1 : Bangkok BKK -> Paris CDG with Paris being the STOPOVER city
OPEN JAW 2 : Paris CDG -> Cancun CUN
will have to buy the tickets from NRT to BKK and from CUN to CLT but those will be cheap tickets to buy
After all is said, will be visiting 4 different cities using United’s very generous reward routing all for 130,000 United miles and $250….. very well worth it!
Damn! I have a ton of travelling in the week this rolls out. I just need to brace myself for (more) trouble I suppose.
Re bags: Gold gets 3 bags for elite+1, there are four people on the sample itin, sure, they are traveling heavy, but it isn’t out of the realm of possibility for gold+3 to have $100 in bag fees.
Speaking of MP award bookings:
DEN-ORD-HKG in UA F
open jaw (HKG-SIN SQ1 J, SIN-BKK in Y on separate bookings)
BKK-FRA in TG A380 F
FRA-LHR-SFO in UA F (will change to LX or LH when availability opens up)
140K miles and a bit in taxes. you can’t beat that.
I’m probably going to be the only one to dig this deep into the image, but did anyone else look at the routing on there?
ORD-ATL via RIC and CHA?!?
First, UA doesn’t fly to CHA.
Second, There is no direct RIC-CHA.
Third, hell, UA doesn’t even operate out of CHA.
If fuel is 2% more what is the fuel surcharge relative to 2008?
FYI, it’s usually the back end and network that determine the speed of processing in these situations, not the terminal. I’d be more interested to know if they’re sticking with the same mainframe environment (just speculating, based on your description, that it’s a mainframe…) or upgrading the back end servers too. If they upgraded to a server system, I wonder what kind they have. Hopefully it’s not the same servers as United.com!!!!
Maybe some marketing dork meant CLT, not CHA. Also, since when can anyone going ORD-RIC upgrade to anything? The last several times I flew that route, it was on E-145s.