United Airlines CEO Scott Kirby was in Houston yesterday voicing a recurring theme, asserting that United is a “three-year-old startup embedded in a 98-year-old airline.” What does he mean and is he correct?
United Airlines, The 2020 “Startup” Carrier
Speaking to both members of the media and local Houston officials and later to employees, Kirby argued that although United is approaching its centennial birthday, it is really an airline that was reborn during the pandemic.
The premise of Kirby’s claim is that every airline faced a critical decision in 2020 as to how to address the pandemic. It was United, reasons Kirby, and only United, that wagered correctly that retiring aircraft and planning for a permanent fleet reduction was shortsighted:
“United was literally the only airline in the world that got COVID right. We were the only ones who fully believed that COVID would be ugly but travel would return.”
Kirby reasoned that becuase “travel is about human nature” it was bound to bounce back and on that basis, “We made big bets.”
Those bets included not just deferring aircraft retirements, but placing the largest order in commercial aircraft history with plans for rapid expansion over the next decade with a fleet plan nevertheless nimble enough to deal with an economic downturn or another pandemic-like event by delaying or accelerating aircraft retirement.
Kirby stressed the investment in new aircraft, the United Next program to retrofit existing narrow body aircraft, its Polaris retrofit completion, investments in lounges and airports, and its technological investment to make the case that it properly bet on the pandemic while its competitors did not.
As United’s fleet and route map has grown, it is now the largest carrier in the world by certain metrics and Kirby claimed the mantle of biggest…and best.
“I think we’re the best but there is many things we can still do better.
“It is an understatement to say we are the best airline in the history of aviation. We will be in a whole other league…”
That has been Kirby’s language for over a year now.
There is no doubt that the pandemic ushered in a new era for United and the carrier has changed quite substantially in some ways since March 2020. On the other hand, the victory lap remains immature.
As I just experienced on the A321neo, United can offer a highly competitive and arguably industry-leading product in economy class (perhaps JetBlue still wins that award, but JetBlue is losing money…). Its international route network is unparalleled and just about everything about the onboard product, particularly the wi-fi and the catering, has nicely improved this year from last year.
Behind the scenes, United has indeed made critical investments in technology like its industry-leading mobile app, Connection Saver, and even things customers never see like the new baggage system at Houston that I saw yesterday and will share about next week.
But being a leading airline of the world will still require a relentless focus on service, investment in the soft product, and a loyalty program that remains highly competitive. Those items remain a work in progress.
Kirby claims United is a “three-year-old startup embedded in a 98-year-old airline” and there is some truth to that statement. United has bet big on growth over the next decade: the question will be whether this bold gamble pays off handsomely or whether there is a ceiling of demand that we are already close to hitting. As United approaches its 100th birthday, it will be fun to watch.