What can United do?

In my idle time waiting at the airport, I wonder how United (and other national airlines) can become profitable again. They haven't figured out how to run a business without the protection of the government. Here are some thoughts.

Operational Excellence = low price

Operational excellence is the basis for all low-cost offerings. Southwest has perfected their operations, focusing on a single type of aircraft and offering flights only into airports that have adequate ground operations. With only one type of aircraft, they require a much smaller inventory of replacement parts and personnel need be certified only in one type of equipment. If a plane is out of commission, they can quickly put the passengers on an identical aircraft.

Any fool can slash prices but only Southwest can afford to. Operational excellence goes hand-in-hand with price. With lower costs, Southwest can pass those savings along to its customers. Other companies with operational excellence, such as Wal-Mart and Dell, leverage their operations not only to offer the lowest prices but also to quickly change their product offerings when a new opportunity occurs.

Michael Treacy and Fred Wiersema, authors of Disciplines of Market Leaders, would argue that the operational excellence position is already filled, thus United must search for another way.

Buying Personas

United claims that the majority of its business comes from business travelers. But to suggest they focus on the "business traveler" is not enough. There are different types of business travelers. Consider those who work for a larger corporation versus those who own their own businesses.

In a small business, the traveler is also the buyer but in a big company, the traveler must usually get flights through an in-house travel department, following corporate travel guidelines. So in the jargon of development, the travel department is the buyer persona while the traveler is the user persona.

I've never been the buyer persona in a large company so I can't imagine what programs United could deploy to be more attractive to this persona. Perhaps consolidated reporting by department code with flags for apparent deviation from corporate guidelines or unnecessarily expensive segments due to late booking.

Assuming fares can be kept within a reasonable range vis a vis the discount carriers, United could court the user persona with specific programs, such as:

  • Make Hawaii a loss-leader. If everyone wants to use their award travel for Hawaii, then let 'em. Don't think of "traveling on awards" as "free." The airlines have the tiger by the tail with their frequent flyer programs; they can get loads of personal information from registrations and travel history. But they don't seem to want to live up to their end of the bargain. Booking award travel six months in advance is impossible: they haven't sold enough revenue seats to cover the "cost" of "free" travel. Every seat on every flight should be available for award travel.
  • Flight attendants. I know they're in a union, but couldn't we do something about the flight attendants? Can we teach them to be friendly? A mandated retirement age of 60 (or better yet 50) would be a start. Come on! It's impossible to deal with the public for 30 years and stay friendly. I'm not asking for funny but I'd like more smiles than I'm getting.
  • "No Babies" flights. I know it's politically incorrect but why should I have to suffer a screaming child on virtually every flight. My first flight in February was at least 20% children, all crying at various times. On a flight last year, the pilot joked that they couldn't find any squalling babies but they were going to push away from the gate anyway. I read an article recently that suggested that all businesses should "fire" 10% of their customers: the difficult ones, the expensive ones. Let the other airlines take children.
  • Get serious on the leg room. I boarded a flight recently that was configured for all first-class seating and everyone was concerned that we were on the wrong plane! United Extra is a start but why not make a third of the plane only for frequent flyers with business class seating. And since I'm wishing, perhaps those seats could have power like the international configurations.
  • TSA Security. What truly is the complaint of most frequent flyers? The professional flyers must wait while the amateurs take off half their clothing but leave their car keys in their pockets. Some airports offer a frequent flyer line which is very helpful. But here's a better idea: how about off-airport valet parking with remote check-in and TSA security screening? No bag checking, just boarding passes, a TSA line, and a bus to the terminal. And since I'm dreaming, could you wash the car on the day I plan to return?
  • Free business travelers club for "best" flyers. I canceled my Red Carpet club membership: the clubs are crowded; the service reluctant and surly. United could offer access to a top-notch club for the top 10% of flyers in their home city.

But now I'm just depressing myself....

Despite those suggestions, maybe the business traveler will fly United no matter what. Courting this persona may make no difference. Maybe we have gotten so used to bad service that we'll suffer it to save a buck. How depressing.

The price game cannot be won by the major carriers???at least in the short-term. They must stop thinking like a regulated monopoly and start thinking of ways to offer a better product instead of only a cheap product.

Okay, my rant on United is over. But how much of this could be said about your company?

Note: check out what Seth has to say on a similar subject in Seth's Blog: So, what will it take to succeed?

Steve Johnson

Steve Johnson

Steve Johnson was a founding instructor at Pragmatic Institute, a role he held for more than 15 years before he left to start Under10 Playbook. In his return to Pragmatic Institute, Steve supports the complete learning path for product teams, ensuring they are fully armed for success. 

Over the course of his career, Steve has helped thousands of companies and tens of thousands of product professionals implement product management processes. He has worked in the high-tech arena since 1981, rising through the ranks from product manager to chief marketing officer. Steve has experience in technical, sales and marketing management positions at companies that specialize in both hardware and software. In addition, he is an author, speaker and advisor on product strategy and product management.


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