United CEO Oscar Munoz has a message about Washington Dulles: we screwed up.
Fly between Newark and Washington Dulles — United’s two east coast hubs — and you’ll find yourself on a 37-seat turboprop (Bombardier Q200). Admitting that United’s share of traffic has steadily shrunk on the WAS-NYC market while competitors have increased, Munoz conceded, “And so now you’ve lost that market.” Indeed, customers do not like regional jets and have voted with their feet. Not only because of the uncomfortable plane, but because these regional jet flights are the first to be delayed or cancelled during inclement weather or other irregular operations.
In a discussion with Dulles employees last month, Munoz conceded that regional jets on less profitable routes ultimately does not make sense. In a remarkable moment of candor, he admitted–
We fully understand that flying to business markets with subpar product and subpar schedules doesn’t work. There’s a reason why you don’t make money — because no one likes to fly it.
Munoz admitted that United considered shuttering its Washington Dulles hub, but decided that is the wrong thing to do “if you want to be a business that’s enduring.” A $50MN tax reduction (subsidy?) from the Commonwealth of Virginia also prodded United to sign a new lease that will run through 2024. Nevertheless, the “temporary” (since 1986) United terminals at Dulles remain and the airport requires at least $100MN in infrastructure improvements — probably more like $2BN. Munoz is angry about the “the train to nowhere” (great line), specifically that United has to pay $5 for every passenger that uses IAD for a train…that still requires a long walk from the Terminal C station to the United gates.
It pisses me off to no end, because it’s just money that could be used in so many different ways if we wanted to do the right thing here.
And of course, Munoz is right.
United Modifies Aircraft Orders
United recently modified its order for 65 737-700s, deferring 61 planes and taking delivery of just four larger Boeing 737-800s. The remaining orders may well be converted into a handful of wide-body jets or Boeing 737 Max. Munoz added–
It’s simply adjusting very expensive acquisitions to make sure they are are going to be with us for a long time, and we don’t wake up with a lot of aircraft five years or 10 years from now and somebody says, “What the hell did you buy these for?” These are assets that are with us for many, many years.
United is also in talks with Airbus to modify its order of 25 Airbus A350s. The A350-1000 has supposedly faced numerous setbacks and many at United still feel introducing an Airbus widebody jet would make little sense in complementing United’s 100% Boeing wide-body fleet.
CONCLUSION
Munoz and I share the sentiment about Washington Dulles. It is a strategic hub that United should not abandon. Nevertheless, there are so many things that make it unattractive. While I don’t necessarily see the long-awaited new terminal going up in my lifetime (in all seriousness), I do think using larger planes, especially for hub to hub traffic, will encourage more connectivity in Dulles and ultimately help to make Dulles a more profitable hub. Munoz is also spot-on concerning aircraft orders. The 737-700s are already outdated. United must think ahead of the curve if it is reclaim lost territory squandered in the Smisek era.
> Read More: United’s Dulles Dilemma
(Tip of the hat to Skift, via View from the Wing)
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Is it realistic for UA to move its operations to Terminal B and Z as it upgauges? Seems like a lot of underutilized gates in B.
Mr. Munoz is spot on with his analysis. My home airport is IAD and I have about 1.5 million butt in seat miles but I haven’t flown United by choice in the last four years. I travel to New York 30 to 40 times per year but never on United on their crappy Express planes, horrible reliability and surly employees.
The airport itself is a management disaster with some of the highest costs in the US thanks to the corrupt and unaccountable Metro Wash Airport Authority. Parking has tripled in price for facilities that were built 10 years ago. They spent $1.5 billion on a short train that doesn’t actually go to three of the four terminals. Passenger enplanement fees and rent are off the chart. No wonder United did not expand IAD as a real hub !
I hope they get it together. IAD could be a real gem with 4 long runways (room for 5) , a terrific non-congested international gateway, plenty of local traffic to feed a hub. Jet Blue tried to make it a mini hub but was uneconomical with $25 per passenger fees.
Finally someone at United got it. We (UA employees) have been complaining for at least 10-15 years that this 37 and 60 seat aircraft on the N.E. corridor does not work !!! United, LISTEN TO THE FRONT LINE EMPLOYEES, you’d be surprised how much they know what works and what doesn’t. Just.Listen.
Oh, dear, perennial (or is it chronic?) problem child, United. Where does one begin? The list of problems is so long, it would take until tomorrow or the day after that to finish writing that list! Well, at least Smisek and the others under his direction who were corrupt or incompetent, have departed Willis Tower, and that’s a good start! The problem is, where does Munoz want to take United in terms of its product and service? And how does he get there? In other words, is he a transformational leader with a vision who can motivate and inspire employees to become willing partners to work together towards solving United’s many problems, overcoming deeply rooted behaviors, attitudes and corporate cultures that predate legacy United’s very messy bankruptcy? And is he willing to stand up to the financial community, which demands strict adherence to its business model of offering the worst product possible for the 85% of its customers, without whom, his, or any, airline for that matter, would cease to exist? If he continues on the direction that’s emerging now, saying one thing (improving the customer service) but in actuality, playing copy-cat to Delta and American in a race to the bottom to satisfy Wall Street’s insatiable appetite for obscenely huge stock buybacks that deprives the company of meaningful resources to INVEST towards improving equipment, facilities, infrastructure, IT, the customer-facing experience, just to name a few of its problems in broad strokes, then really, what reason do passengers have to go back to flying United, especially, if Delta ‘s version of “awful” is still much better than either United or American’s recently announced plans for (truly) “awful” stands to be? If Munoz believes the cramped quarters of small planes is among United’s ills, then 30″ pitch spacing on ANY aircraft, mainline or other, should be at the top of his list of things that must go. Ditto for the ridiculous, not to mention dangerous and unhealthy (as in Deep Vein Thrombosis/”DVT”) ten abreast, 31″ pitch on the airlines’s new “flagship” Boeing 777-300’s. Nothing screams “FU” (and I don’t mean “Fly United”!!!) than paying high-hundreds, but more likely $1,500 and more, and finding oneself stuck in these fly abominations for 12-16 hours on a flight to/from Asia or Tel Aviv, where most of the time, these flying torture chambers (or death traps if you’re among the unfortunate souls who comes down with DVT) are going to be used for. And as if that’s already not a big “FU” to the vast majority of the people who “pay the freight” (in a manner of speaking), United’s new 366-passenger Boeing 777’s come with four fewer bathrooms than the 374-passenger Boeing 747-400’s they’ll replace. This means four fewer bathrooms (of course, “Lavatories” in airlinespeak) on the 777-300’s serving essentially the same number of people as the 747-400, in a much smaller space, crowding very narrow aisles during “rush hours” to use the loo. Yeah, right, that makes for “friendly skies”…So which is it? Following Wall Street’s marching orders and the chicanery of paying lip service to improving the passenger experience when you’re doing the exact opposite by making it worse in every way possible by shoehorning the vast majority of your customers into teeny-tiny seats and densely packed rows, “hate-selling” to them in every way possible, and them insulting their intelligence by having the nerve to misrepresent it as “better”? Or actually having a real vision and the willing to create a product that doesn’t leave the majority of your customers feeling abused and taken advantage of because meaningful competition on most routes doesn’t exist and you know you can get away with ripping them off? As it stands, everyone knows there’s no compelling reason to fly United? Blaming small planes, but then essentially replicating the same unwanted and undesirable small seats crammed into densely packed rows found on the regional planes that serve short duration missions and instead putting them on mainline jets for transcon flights and intercontinental missions over oceans, is pure folly. It’s pure greed; offering the bare minimum and finding “bs” excuses to charge a fee for anything and everything you think you can get away with, because you know you can. That’s NOT visionary or transformational. It more of the same misery, favored only by those who NEVER have to endure it and only those who benefit from it. The day upper management of airlines, especially those in the “C-suites”, Wall Street analysts, and the other bullies in the financial community (like the hedge funds), and the community of “consultants” that spend most of their time and efforts searching for new ways to screw passengers and then “alternative fact” the “hate-sell” as something “better” have to sit in the middle seat that’s 17″ wide, in a 30-31″ pitch row, for any of their flights across the country or to other distant lands (such as those commonly found on 737’s or increasingly, 777’s) and suffering the same humiliation and indignities that 85% of passengers typically experience, is the day all of this bs would stop. But since they don’t have to endure what most do, but instead profit handsomely off of this passenger hostile game plan, and probably never will, it falls upon fliers to vote with their wallets and avoid airlines (or any business for that matter), whose business model amounts to nothing more than seeing what they can get away because we can get away with it, or whose mission is to compete by offering a superior product and giving reason to actually want to buy what they’re offering. As it stands, and based on first hand experience, airlines like Southwest, jetBlue and Delta offer a vastly superior product to United or American. If Oscar Munoz truly seeks to offer a better product and give people a reason to want to choose United, he’d be wise to redirect his efforts to improving the end-to-end passenger experience FROM NOSE-TO -TAIL on every flight instead of simply following American, Spirit, Allegiant, Frontier, and to a lesser extent, Delta, in a race to the bottom to see who can “outscrew” the passenger more. (As a side note: Alaska and Virgin America were omitted as I have not flown either airline and have had virtually no other contact with either airline on behalf of family, close friends, and those who’s “trip reports” are reliable. So the omission of those airlines is not a reflection of their product, which most surveys report as being very good. It’s just that I have no first-hand experience to include for purposes of comparing these two airlines against the others).
it warms my ltl lump-of-coal heart to see Oscar use the same language I (GS, EWR based) do when I have to deal with IAD.
On the other hand, its the only place I regularly run into genuinely friendly TSA people, but I wonder if that’s a fluke
I would argue, from a passenger experience perspective, the 739 is just as outdated as the 7-700. It’s s shame to see United continue add either to their fleet.
As a post script to my prior comment, please note the following clarification: it’s up to passengers to avoid airlines like United or American (or others) whose game plan, when seen for what it is amounts to seeing what they can get away with and to instead choose airlines who include in a meaningful way, or even prioritize, the passenger experience for the 85% (or more in the case of Southwest and jetBlue) who fly in the MAIN CABIN. If Oscar Munoz is claiming United’s woes at Washington- Dulles result from offering a subpar product on small planes, he’d be well advised to keep in mind it’s NOT necessarily the size or even the age of a plane that defines the passenger experience; it’s how the plane is configured and if it offers updated technology for IFE and power ports for devices. I’ll gladly go out of the way to sit on a jetBlue Embraer 190 with its 32″ pitch 2×2 18″ wide seats over ANY United jet new or old with their 30″ pitch rows. And I have deliberately chosen airlines that offer long-haul flights on Airbus A-330’s with their 2-4-2 main cabin seating and wider rows over ANY airline that flies 777’s — even those that still have nine across 3-3-3 seating. And I’m average height and weight. Long-haul flying is more than a bus ride across town or a subway ride where getting from point A to point B safely is the sole need or concern. Flying long distances thousands of feet above the ground, to destinations thousands of miles away and literally on the other side of the planet, while being confined in a tube hurtling through the sky at hundreds of miles per hour over the course of many hours, requires (or at least it should) attention be paid to more than cramming as many people as possible that will fit into a limited amount of space than say, offering “basic” transportation on a subway, bus or commuter train for journeys that typically are of a short duration. Airlines that view their customers as nothing more than self-loading cargo, and those that seek to mimic them (like United and American) can only get away with this if the public chooses them instead of those to offer something vastly better, like Southwest , jetBlue, or to some extent, Delta (which does have some “hate-selling” products, but they’re not nearly as hostile and by every other criteria, and overall offer a vastly superior product over United or American). It’s not always easy to proofread and edit on hand held devices where text “disappears” while being written, and I didn’t see an “edit” function to correct the original version. Hopefully, this better clarifies what I meant to express. Cheers!
Miller,
I get the feeling from your posts that you don’t like United?
I’m glad he sees the situation for what it is. A passenger’s tolerence for inefficeint airport layouts, time spent taxiing, moving through airports, etc. is directly related to the length of the flight. I have no problem budgeting an hour plus in transit time for a 11 hour flight to Dubai, but have no patience to spend the same amount of time (or longer!) for a 40 min flight. Sometimes I wonder if it’s a fool’s errand to go after communter traffic in the eastern seaboard given their inefficient setup at Dulles. Would substituting a 737 make that much of a difference?