FEASTING ON UNITED'S CARCASS
Tactical Traveler, July 12, 2001 -- The second incarnation of Frontier Airlines launched seven years ago this month and, astonishing more than a few critics, it has developed into a serious alternative to United Airlines at their shared Denver hub. As United's in-flight service and on-time performance has tanked, Frontier has expanded dramatically: It now flies to 23 cities, it carried more than 3 million passengers in the last 12 months and its monthly traffic has grown steadily while United's domestic passenger count has declined for 11 consecutive months. And, by the way, Frontier is making money--$54.9 million last year--and United isn't. "There's no doubt we've gotten new customers based on United's problems," says Tom Allee, Frontier's director of national sales. "But my strongest selling tool is pricing. I've got great service, good people and I'm 30-to-40 percent lower than Brand X" on business-travel fares.
HOW TO LOSE CUSTOMERS AND GUSH RED INK
Tactical Traveler, July 19, 2001 -- Business travelers continue to penalize United Airlines for its miserable operations and callous disregard for the welfare of its best customers. Since the carrier experienced its operational meltdown last summer--on-time performance was as low as 25 percent during some weeks and the carrier abruptly cancelled as much as 10 percent of its schedule--United's domestic traffic has declined for 11 consecutive months. And on Tuesday United reported a staggering second-quarter loss of $292 million. (By comparison, American Airlines lost a more modest $105 million.) That brings United's loss to $605 million for the first six months of 2001. For the 12 months beginning with last year's third quarter, the cumulative loss is a staggering $793 million. "The worst thing is that management here just doesn't get it," one distressed United executive told me yesterday. "No one here is prepared to face the hard fact that we alienated a huge percentage of our best customers last year, we never apologized and never won them back, and we continue to antagonize the base we still have by cutting what we offer our first-class and [most frequent] flyers. Even if we planned it, we couldn't lose more money or more customers."
REARRANGING THE DECK CHAIRS AT UNITED
Tactical Traveler, August 16, 2001 -- United Airlines announced last week that it had "slashed fares dramatically and eliminated the Saturday-stay restriction" on a few flights from its Chicago/O'Hare hub to eight major business-travel cities. The decision was a targeted, minor response to lower-fare flights from Chicago/Midway offered by American Trans Air, but it generated huge amounts of positive (and totally misleading) coverage from the mainstream media. The facts on United's move--and American's decision to match--show that all of the publicity was much ado about very little. The fares come with 29 lines of restrictions, the prices are only available on a handful of flights beginning next month, they're capacity controlled, require a roundtrip purchase and are only valid if you buy seven days in advance. And in the markets where United and American matched ATA's seven-day fares, they did not match the smaller carrier's one-way walk up fares. Two examples: O'Hare to Los Angeles on United or American still costs $1,285 one way, while ATA is charging $255 from Midway. United and American are charging $823 walk-up between O'Hare and Boston, but ATA is charging $217.
These items originally ran at biztravel.com. This annotation originally appeared at JoeSentMe.com in December, 2002.
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