This week was Leadership Week at United Airlines with a number of addresses from top-level leadership about the future of United.
In an extended conversation with Walter Isaacson, a member of the United Airlines Board of Directors, CEO Scott Kirby pitted United against Wall Street and explained why United will focus on the quality of the passenger experience in the months ahead.
United Airlines CEO Scott Kirby Vs. Wall Street
Kirby frames the conversation as United Airlines against Wall Street, saying United will no longer give into short-term demand for numbers and performance.
“One of the mistakes United made over the years was giving into Wall Street, who is very short-term focused and I think it’s really important we do the right thing for the long-term.
“The good news is doing the right thing, even if costs you something in the short-term, is almost always the right answer in the long-term.”
Specifically, this was implicated by the recent order of up to 500 new aircraft. But Kirby insists that rather that kowtowing to demand to cut capacity, the airline must think long-term:
“People on Wall Street got mad at us. Still are mad at us about an aircraft order…
“We’ve underutilized our hubs and we’ve tried to fly 50 seat regional jets up against Delta or American or Southwest flying mainline jets and we lose that battle. It’s a higher cost airplane. It’s a worse product. We just lose the battle and you get on this negative flywheel…”
Kirby is right about using the right-sized jets, though I’m not sure Wall Street was actually that angry at United for its new aircraft order. Still, the fact that Kirby is thinking long-term is an important point of distinction from two of his recent predecessors, Jeff Smisek and Glenn Tilton.
Kirby: Customers Care About Quality. That’s What We Are Betting On
Kirby pivots from the aircraft order to the onboard product, noting that central to his growth plan is offering the best product and best customer service.
“We’ve always had the most potential of any airline in the world so this is really about realizing our potential. And part of that means we have the right airplanes and we have to have a market share that’s equivalent to what our bills are, but it’s also about the product.
“To me, the most important thing at United Next is not the 500 airplanes. That’s exciting, that’s important, but it’s about getting the entire product to be a great product that makes a difference to customers.
“And the people on Wall Street have said, ‘Oh you’re making a big bet on recovery in business demand or recovery and demand,” and what I see is that’s not the bet we’ve made. We’re making a bet that customers care about quality, that people will fly us because we’ve got the best product and the best customer service.
“Some people care only about price, but there are a lot of people out there that care about more than just saving $2 on their airline ticket and that’s the bet we’re making is that quality will bring us loyal customers.”
There’s still a disconnect between that rhetoric and the onboard product. Kirby as much as admits that when he speak about the importance of brining glassware back onboard in another part of his conversation with Isaacson. But it’s so much more than glassware or the current unbelievably miserly catering offered on longhaul flights in all three cabins: it is about creating a door-to-door quality experience that passengers are willing to pay a premium for. Seamless check-in on the app. Ground experience. Wi-Fi onboard. A compelling MileagePlus program.
In other meetings this week, United leadership talked about replacing Sodexo at United Clubs with the same team that is responsible for catering for American Express Centurion Lounges. It talked about a new flight test kitchen in ORD that eventually will transform the onboard catering experience. Stay tuned for more details on that.
There’s a lot of talk right now and it’s all music to the ears of every frequent Untied flyer…but it will come down, as it always does, to execution.
Kirby is saying all the right things…he has for months. United Airlines has also positioned itself very well to emerge from the pandemic stronger than ever, especially when international traffic rebounds. But Kirby must inspire employees to provide uniformly good service and offer a soft product that rivals or exceeds any of its U.S. competitors. That remains a work in progress, but all sources indicate United is working on it.
image: Scott Kirby / Instagram