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Continue reading: United CEO Scott Kirby Interview: A Lot To Digest
Share your questions, experiences, and thoughts below.
Man who leads an eternally cyclical business thinks he’s engineered the cycles out.
That’ll age well.
I don't find that interview fascinating, because nothing he said was unexpected.
I really like United's sanitizing wipes. They work great, they smell good, and the FAs always say, take as many as you want. Kirby is right that they create a positive interaction with passengers.
Whether I agree or disagree with Kirby's points, it's refreshing to have an airline CEO who seems comfortable talking in a mostly unscripted way. Of course this is still a produced setting — and I'm sure there's someone from United comms in the room — but it still feels casual enough.
In contrast, Isom appears uncomfortable speaking even in highly sanitized environments and Bastian seems friendly but somewhat aloof. Neither seems to have the gift of gab like Kirby does.
Now that the full retrofit is complete, I do see Polaris having a halo effect amongst my friends, who often book 1-3 cash Polaris tickets per year on $200k annual salaries or so (to the tune of $10-15k a year), for leisure trips. The NYC’ers are even willing to schlep to/from EWR, so there’s that as well.
I’m surprised Kirby didn’t mention the global network rather than lack of change fees or basic economy in terms of being appealing. To me that will be their biggest differentiator in a global world, where United can take you basically anywhere on Earth while AA has huge holes in Africa & non-Tokyo Pacific, and Delta preferring to channel most pax thru partner hubs ICN/CDG/AMS than flying point-to-point
*A is also a bit of a bigger alliance, UA can sell tickets to basically any large city and there's a decent amount of *A traffic through.
UNITED rising
Yes the 763s aren't doing Delta any favors with the discretionary leisure crowd in NYC - they tend to pop up more often on those kinds of leisure heavy routes and even if you get a 764 they sometimes get swapped for the 763
once you get over the fact that it's in NJ (ew!), EWR is way more convenient hub - particularly for transit accessibility - than JFK for getting into the city.
I always seem to have a stock of them in my bag.... I get a lot of conversation out of them... when I used them to wipe down my tray on my next American flight and other passengers ask where it came from (as do the crew... "Oh United has those? I wish we did!")
I wouldn't expect it to be. It's kind of like a friend of mine who goes crazy with "oh we have new news that isn't public!" from some memo to employees... No, any memo to the front line employees is basically a public statement. When you are an exec and have all sorts of SEC and similar concerns, you don't typically throw out something earth shattering that isn't planned.
First, the Air Show is hitting it out of the park in the content they produce. The partnership between the 3 well-respected aviation journalists is bearing great fruit.
Ben, your assessment of the interview is very balanced . Well done.
Scott Kirby has long had a need to compare himself and his organizations to others and it has only grown more intense since he was passed over for the CEO position at AA. Let's not forget that he made many of the decisions at AA that are handicapping them and he is only to happy to note AA's struggles - some of which he has had nothing to do with - while he undoubtedly thanks his lucky stars that he had the opportunity to jump ship. Now on his fourth airline, he has learned alot and that is a good thing. He notes how much he has learned from Delta. United was mismanaged for so long that he was certain to have been able to fix many of UA's problems; looking at what DL has accomplished certainly has helped shape UA's strategies.
But let's also be clear that Kirby loves to think that he is on the right side of a dividing line in the industry, position UA higher than where it actually is, and draw the line below UA so that every one else is inferior.
In reality, UA made just 55% of the net profits that DL did in 2023. While currrent investor guidance is that gap will close some more in 2024, UA's costs are likely to go up faster than DL's precisely because of the unsettled FA contract.
Cranky does a great job of data analysis and highlighted how the 60% increase in transpacific capacity during the winter resulted in horrible loads and a TPAC loss in the 4th quarter of 2023, the most recent quarter for which the DOT has released profits by global region. Given that UA made half of the transatlantic profits that DL made in 2023 despite flying much more capacity, UA's strategy of a very large international network is not delivering the fruits that it should. and those people in social media that argue that profits don't matter might want to take that up with airline employees that get a portion of their compensation from profit sharing. I am certain that a whole lot of UA employees would be more interested in a "less sexy" network and more profits and profit sharing comparable to DL employees.
ULCCs can fix themselves just as much as UA fixed itself. Let's not forget that UA still holds the record for the longest and most costly bankruptcy restructuring among US airlines.
DL and UA are doing as well as they are in part because US airlines came out of bankruptcy so much stronger than their international competitors but other airlines including foreign competitors will add capacity in markets if UA can make money in those markets.
UA is in a great spot right now and Kirby is making many positive moves but life and the airline industry is much more of a marathon than a sprint.
you conveniently ignore the fact that UA's 757s have no Polaris and UA is the only US airline that flies 757s to the UK or continental Europe.
DL uses about 1/3 of its 767-300ERs on domestic flights where the competition at JFK is using narrowbodies.
DL also uses some of its 763s to Latin America on flights that aren't even 8 hours long.
The 763 is flex capacity for DL's transatlantic network just as the 757 and some of UA's 767s are.
The notion that DL is at a competitive disadvantage to UA because of the 767 is debunked by the fact that DL made twice as much money flying the Atlantic in 2023 than UA even though UA flew much more capacity.
+1. The guaranteed Polaris seat (and dedicated lounge for international flights) is a huge selling point vs D1 out of JFK, where you're very likely to end up on an embarrassingly outdated 763 after waiting to enter one of the overcrowded Skyclubs (the new dedicated lounge cannot open soon enough). Yes, United service is a little more inconsistent than Delta's (although for the most part I have found Polaris FA's to be wonderful), and Delta has better food, but for those quick trans-Atlantic hops it's really not as important when you're primarily trying to have a nice dinner at the airport and get to sleep once onboard.
The readers here probably do care more about business class but the Delta 763 is actually very nice for economy pax.
Imagine if he spent 3 hours eating Polaris inflight food. It's not really that difficult of a task to fix catering. Seemingly a lot of other airlines have it figured out
first, if you have been to DL's terminal at JFK there are massive signs all over the airside part of the headhouse announcing the opening of the Delta One lounge which will happen in a matter of weeks.
It is a guarantee that the opening of the D1 lounge at JFK and the subsequent D1 lounges at LAX and BOS to follow will dramatically improve Sky Club crowding.
and, if the D1 lounges are like the Sky Clubs, they are likely to be better than AA or UA's premium cabin international lounges.
I get that customers don't care if an airline makes or loses money but UA destroyed the economics of the 767 by putting Polaris in it. The 767 is simply too narrow for modern business class seats and the only way UA could put Polaris on its 767s is to reduce the number of total seats which left UA's 763s the highest cost widebodies per seat among US carriers followed by the 777-200ERs.
The notion that an airline can get premium revenue w/ more premium seats is unsupported by data which shows there is an abundance of business class seats on many airlines and there is no premium because of a very low density configuration.
The sooner people come to grips that UA made significantly less on its international system including TATL than DL which flew alot less capacity, the sooner people can accept that bigger is not better - regardless if the topic is the size of a carrier's network or the size of its business class seats.
Kirby himself said in the interview that loss-making strategies are not sustainable. Problem is that UA has a number of those strategies eve though he loves to talk about the money that other airlines lose.
From a passenger / business customer perspective, UA has the best network as their hubs tend to be located in large business and / or tourist centers. The tradeoff is sometimes these locations can face more fierce competition. Double edged sword.
Does he discuss catering? I remember some other exec did a promo blitz last year around the investment in improvements they're making into that, but the rollout has been s....l.....o.....w.....
@Yoloswag not just regular economy, but Premium Select 2-2-2 with direct aisle access on 2/3rds of seats are also quite nice
How can he say he cares about service and product yet they continue to serve inedible food in Polaris? Most of the article made it seem like he was completely delusional about the reality.
In an article about Scott Kirby (or any other person) it might be good to include his/her photo...unless he is one of the four guys on the picket line. Just speaking for me and maybe some of us uninitiated readers. Thanks
First you have to define what is "fail." Could United one day be forced back into Chapter 11. Yes. Would the US Government let United liquidate, likely never. As far as the ULCC business model I don't think it's viable long term. It's too reliant upon lower income consumers which live paycheck to paycheck. These are people that when the grocery bill goes up by an extra $50-$100 a month are hurting. Might not be the pc thing to say, but it's the blunt truth. They are first to get hurt with inflation or falling employment. All the COVID "stymies" and rising wages are gone while living costs are rising.
Moreover, as time goes on people figure out the game. They do not get stuck with fees because it becomes common knowledge of how to avoid the fees.
All this being said I don't see United (or any other airline) making huge investments or enhancements to the coach experience. For now unless one springs for (or gets complimentary) an MCE seat not much different from Spirit other than a screen and a free soda.
United's biggest liability is its front line employee. The real test of any organization is how it handles itself when things don't go right. Unfortunately UA doesn't invest in people who are capable of solving problems or give them the authority to so. I'd contrast this with Alaska where when something goes wrong you're talking to someone who has the smarts to get it and is empowered to find a fix. For anyone who travels frequently that's an immense source of comfort and big part of why AS customers are so loyal to the airline.
This is an excellent synopsis of te Kirby interview! Thank you! from a 1K traveler!
I tend to disagree. First, there is such a thing as taste, and a menu targeted at my partner is unlikely to please me. It is extremely rare to come across a really good meal in the air, and being based in Asia, I have travelled with some great airlines.
As an amateur cook, there is also the gap between the wow factor of a pretty dish with fancy sounding name/ingredients, and what tastes best on a plane. Usually it is the messy, curry-like, dishes that are most forgiving. The Nasi Lemak served by AirAsia (sold for about $5, so I assume it costs less than half that) tastes better than any dish I had on Cathay Pacific or Qantas in the last decade.
Ben - here's a great topic for an article...
You can dress a pig up all you want but Kirby will always be that pig. UA had a product worth writing about but it’s now gone. Causing mass chaos when a flight is delayed or cancelled is your idea of to big to fail? UA has only proven one thing true true talent can’t be bought!
They’ve already matched Delta and perhaps eclipsed Delta on that front. (By that I mean “shareholder value” not “customer value.”)
I don’t think Kirby cares about his customers because UA continues to serve terrible meal on board in all classes in order to save cost. The meal service in
Polaris is improving in recent weeks, but still far behind the old days. I don’t know how FA can be proud of their jobs without supplies of good food. Ground agents’ job was mainly there to harass passengers and could not even properly implement crowd control.
The only thing UA did right was to keep its wide body fleet during pandemic when DL and AA removed a large numbers of their old fleet. The market is strong and there are not enough seats available in almost any route. Without UA’s aging 777-200er, there are 80+ of them, I think passengers will suffer even more due to higher fare. DL and AA cannot compete against UA without airplanes. These wide body also feed traffic to UA’s domestic network really well and that is another loss for DL and AA. The airfare is high in general, UA is profitable. DL may have planned their routes with better efficiency, but they do not have the market, particularly in transpacific and latin America routes. While Boeing and Airbus are constrained in production, this situation will not improve for DL and AA for quite sometime.
UA will dominate the air travel market and continues to abuse for a long time.
It's a dangerous statement to say that United will not fall from the top, many great business have failed, and just because today is good doesn't mean tomorrow will be. Even Jeff bezos said early on it's not a matter of if.. it's a matter of when Amazon will be surpassed by someone else.
United is at its high right now but it doesn't mean it'll always be. Plenty of companies peaked and then eventually failed, recent example - Peloton, WeWork. United has a big widebody order backlog to replace its aging 772s, but that also means they have a huge expense and liability in the next decade, and the winter months will de difficult to place all those expensive new wide-bodies profitably, seeing how that turned out in its Pacific expansion. Is it just me or Kirby just seems like an arrogant person who hold grudges and likes to throw petty shades?
Although he’s done great things. He’s completely forgotten about the PEOPLE that work so hard to keep this going. The people are truly the core and when you continually make them feel unvalued it breaks down into a toxic work environment. And you can’t have a successful business with out good people. When you show them loyalty and love they in turn will show it back.
Over the years I had a number of cases where United front line employees went above and beyond and helped resolve difficult situations.
For example, I once forgot my wallet in a rental car and only noticed at the gate. The agent rebooked me on a (direct) Delta flight instead of the connection I had originally booked, time to retrieve my wallet and arrive in time.
Or when I once forgot my notebook in a seat pocket, realized in the lounge, the lounge agents made some calls, and the notebook awaited me on my connecting flight.
Those were lovely examples!
Scott kirby is a snake. flight attendants are not getting paid during boarding. I feel bad for that work group. United meaning Scott the snake thinks only 5% profit sharing is enough for these poor flight attendants?. While United continues to make billions of dollars on the backs of its hard working group. It's sad to see how much money it has made and they continue to treat their employees like animals.