Earlier today I wrote about United’s aggressive steps to combat an unprecedented drop in demand and revenue. But what might some of these measures mean for customers?
Are Kirby Kutbacks Coming?
Incoming United CEO Scott Kirby has been a shrewd operator throughout his career at America West, US Airways, American Airlines, and now United. He’s known as a bean counter and may be tone deaf when it comes to customer service, but he’s very good at weathering storms…his tenure suggests he is the right man at the right time for United, in terms of ensuring survival.
But there’s a huge gulf between survival and the sort of product and service that will make United a world-class airline.
As Kirby promises a drawdown in investments and looks for ways to preserve revenue, might we soon see a further degradation of the onboard product?
I cannot take credit for the term “Kirby Kutbacks”, which I just love. That comes from Flyertalk, where a thread has already formed speculating about what cutbacks we may seen in the weeks ahead. I won’t broadcast or even add to the list…it’s never good to give United ideas.
But the discussion resonates because we have seen Kirby cut back benefits during the good times. A flight attendant position was eliminated on many wide body jets. Meals became pre-plated on casserole dishes. Bonuses were cut for employees and compensation was reduced for flight delays and other travel mishaps.
It thus seems intuitive that Kirby will be willing to cut back during times like this. Perhaps there is some logic to it: those who will continue to travel are likely to be those who will travel anyway, not discretionary travels. If they will travel anyway, they will be willing to accept a lower standard of service enroute from A to B.
I don’t buy that logic; I reject the notion that United should slide by being “just good enough” and not aim for the sort of premium product Delta is now known for. It would be tragic if United did not complete its Washington Dulles Polaris lounge, which is nearing completion. It would be pathetic if United cut amenity kits, pajamas, and further degraded meal quality onboard. That would serve to alienate, ultimately serving as a penny wise, pound foolish move.
Any further devaluation in MileagePlus will backfire. If United thinks it boost revenue by raising prices or fees, it should think again. If anything, United should loosen elite qualifying requirements and roll back the onerous new close-in processing fee for awards (in the form of miles). Those sorts of moves will win back customers, especially discretionary customers, and set United on the road to recovery once the health scare vanishes.
That said, I suspect we will see more cuts in the near future beyond the schedule and to the product.
United, understandably, is in crisis mode. But its response to this crisis cannot be cut, cut, cut the onboard product. We’d be foolish to doubt that everything is on the table. Let’s hope that wiser heads prevail and this health crisis will not be used as a cover to enact a new round of Kirby Kutbacks that will leave United comparatively less competitive in a space that remains highly-competitive, even with depressed demand.