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One of the major portions of the Star MegaDo 4 was getting some time face-to-face with Jeff Smisek, United’s President and CEO. I actually had met Jeff a couple of weeks prior on the inaugural United 787 Dreamliner flight from Houston to Chicago, but it was more of a “take a photo and get him to sign my boarding pass” type encounter than it was an actual sharing of information.
On the last day of the MegaDo we had the morning at Willis Tower in Chicago where my group met with reps from United’s MileagePlus and IT teams for the first part of the day. Then, all of the groups came together for a presentation by Jeff Smisek. We were on the 99th floor in the Willis Tower, and the views alone made it worth the trip up. Truthfully, my expectations for the presentation weren’t very high. I mean, what is a CEO of an airline really going to say to a group of Milepoint folks that is earth shattering info? I have to say that my expectations were pleasantly exceeded.
Before Jeff took the mic, there were some obligatory “thank you’s” for the event, and we got to watch some pretty good “aviation geek” videos from a contest United held. After those were finished we saw a video that Jeff had shot that was basically an apology video for not being able to be there in person. I’m not sure if anyone actually believed he wasn’t going to be there, but it was really funny. I was laughing out loud. I like when big wigs can still poke fun at themselves. After the fake apology video, Jeff made a “surprise appearance” and spoke to all of us for about half an hour.
You can watch the entire un-cut video here (and if you are a UA flyer it is worth a watch), but if you don’t have a chance to watch the whole 35-minute video then here are some of the highlights of his presentation:
- In 2013 we will start seeing a lot of the product and customer services they have been investing in roll-out. Examples are WIFI, airport improvements, agent training, larger bins, the Dreamliner, etc. They are training 100% of their agents and flight attendants world-wide on customer service because they know that the service you get during flight can make a huge difference in a good experience and a bad experience.
- It was acknowledged that 2012 has been tough for United, especially over the summer. In fact, he went so far as to say “we didn’t run a good operation”.
- With the arrival of 787s, there are new long-haul routes in the works, but due to the “competitive nature” of the business he did not give specifics. He did say that the 787 will also be used seasonally when the demand on a route isn’t high enough for a 777. They will be expanding beyond the current 370 destinations that United serves.
- When the “powerful hubs” in the US were listed, Cleveland and Denver were not mentioned.
- There is a lot of work still to do related to the merger. Bringing together two cultures and two unions from United and Continental has been difficult.
- They have the intellectual property rights to SHARES, so using it is important in them controlling their own destiny. However, they didn’t have the front-end built in time when it was time to migrate the United and Continental info together, so it was difficult for the United employees.
- In regards to reliability, he mentioned that some of their fleet is older and suffred lower re-investment for years due to the airline going bankrupt, so they are playing catch-up. United has ordered 150 new narrow body airplanes that start to be delivered in 2013. This is in addition to the 50 787s on order and the 25 A350s. The new airplanes will help with reliability, but they are also investing in the existing fleet with preventative maintenance and other improvements. The reliability has already improved greatly in the last couple of months.
- Jeff admitted they “were late to the WIFI party”. However, he thinks that will be a good thing since they decided not to install your “Grandpa’s WIFI”, but to go ahead and install global satellite based WIFI that will work pretty much everywhere other than China and on some polar routes. He said it will really help the way that United can stay in contact with passengers during the flight. For example, if your bag didn’t make it on the flight, you can be notified ahead of time so you don’t wait at baggage claim. They can go ahead and make arrangements to have the bag sent to your home or hotel. United will own the broadband themselves and resell it to the passengers.
- 300 United airplanes will have WIFI by the end of 2013. There is one A319 now completed. The 787 does not have WIFI as it was designed in the early days of WIFI, but Boeing is working to certify the aircraft for WIFI.
- Jeff said that the “world has evolved where social media is important”. That comes with good and bad realities. One thing is that it has brought the expectation of immediacy, and that is hard for a company of their size to fulfill. It is an evolving, but important, area for United.
- When asked why United sells upgrades for “tens of dollars” when elite members have not been upgraded, he said that United making money is ultimately good for customers, so there is a balance between complimentary upgrades and day-of-departure upgrades. He said they don’t have the balance right currently, but they need to sell some of the upgrades up front in order to bring cash in the door.
- Jeff said that “hubs earn their business every day” and he cannot guarantee the existence of a hub as they have to continue to earn their way. He said that Cleveland and Denver are smaller hubs, but that they also had “powerful hubs”. He said it is unlikely they would develop a new hub, but in my mind he did hint that the smaller hubs’ future is less certain. That isn’t a quote, just my own impression.
- The boarding process needs work and they don’t have it right currently. There are changes coming to the boarding process that balance efficiency and recognizing elite members with priority boarding. He said they brought the problem on themselves by charging for checked bags and not enforcing carry-on rules. They have “incented people to bring the kitchen sink on-board”.
- When asked about a possible AA/US merger, he said he thinks that consolidation is a good thing in the airline industry. He said they would lose US Airways in Star Alliance and that would hurt United, but he thinks the overall benefits to the industry and United would outweigh the cost of United losing US as a partner. In perhaps my favorite line of the speech he said that he looks at what United went through and their integration and said “Muwhaha – I’m going to enjoy watching that!” (in a Dr. Evil type way) if the two airlines do merge.
- There are some deals that are struck within the Star Alliance that aren’t unilateral to all airlines in the alliance, so it isn’t seamless and there are also some differences with reciprocity between airlines. For example, he acknowledged that lounge access around the world if you aren’t at the “front of the plane” isn’t as good as it is if you are flying in a premium cabin.
While I appreciated that he seemed to talk pretty candidly and openly (within reason), what I really liked is that he was entertaining and “relatable”. I know this really just means he is a very good public speaker, but I was way more engaged for 35 minutes than I thought I would be. I also left thinking that he at least knows many of the issues that face United flyers. We may not like all of the resolutions to those issues, but he absolutely is aware of the problems and priorities for frequent United flyers.