Should United Just Liquidate?

That’s the question this Business Week column asks and the answer they conclude is (of course) that United should be broken up and sold.  The reasons aren’t particularly compelling – in fact, it appears that the reasons given are:

1) The pilots aren’t happy;
2) One of the columnist’s co-workers had a delay last week.

I’m not sure if covering the airline industry brings out the worst in most reporters (the Dallas Morning News, the NY Times, and the WSJ excepted), but this is just another example of bandwagon jumping by a reporter who hasn’t really done his homework.

United may very well be in trouble – and God knows the forces in the industry are lined up against them.  But every article that mentions removing pillows as a reason why airlines are falling apart are way, way off the mark.  Charging for pillows (and sodas) are remedies for the problems they have – not the problems themselves.  After all the hand-wringing and complaining about pillows passes, we’ll all realize that charging for stuff was a smart move.  As Cranky Flier points out,  charging for this stuff is a good thing.  Free drinks and whatnot was a relic of the regulated system 30 years ago.  Fares have dropped considerably since then without (until recently) any drop in amenities.  After all this time, they’re starting to charge for food (which everyone used to complain about), drinks ($2? Get over it), and pillows (really…you slept better on a coach pillow?).  I’m thinking it’s about time that the backlash to the backlash kicks in.

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  1. I didn’t think the article was quite as bad as you made it out to be, though I see your general point. I have to disagree that “we” — and by that I mean regular folks, not reporters/bloggers focusing on aviation — will learn to stop worrying and come to appreciate being charged for on-board perks and realize that it was a “smart move” for all concerned. We’ll grudgingly accept it, but we won’t like it, and will continue to pine for the “good old days” of lavish on-board amenities even though many, many people couldn’t affod to fly back then.
    Heck, even a couple of the publications that you cite as citadels of reason when it comes to this stuff have published pieces jabbing the airlines for their recent moves. It all depends on the writer, the editor and the publication’s mission.
    Non-national newspapers outside of hub cities and places the planes are made (like Seattle) don’t have the luxury of covering the industy from the top down as a business. What matters to them is the local impact to people and businesses of airport expansion, air service, etc. Doesn’t account for Biz Week, but just explaining the newspaper situation…

  2. Yes, it’s a stupid article. But the advice to start charging customers for marginal service items (drink, peanuts, pillows) is also just as useless. If an airline can’t provide a degree of comfort from a washington to denver long distance flight that a mexican bus can, maybe they shouldn’t be in business. If I remember, the Mexican buses do charge for drinks, but their seats are 5x as comfortable.

    Until they solve the route/frequency problems (which really means understand how business flyers pay for their flights) all this nickle and dime stuff, is, well nickle and dime.

  3. As long as the airlines margins stay the same or reduce, it’s good for all of us if they start charging for incidentals because they’re just that: incidental. Previously all of those costs were build into your ticket price. I know I’d rather pay $10 less for a flight vs. getting a cheap pillow/blanket/headset… Now it’s up to you – if you want them, buy them. Or the airlines can bring them back and keep raising your ticket price.

  4. $7 for a pillow is not a la carte pricing. The inability of airlines to raise prices is due to competition. It turns out consumers are very price conscious on airline travel, which is why southwest can gain market share with a lower flight frequency.

    I’m all for a la carte pricing on airline travel. But that is not is what is happening here.

  5. I have no problem at all being charged for the amenities such as peanuts or a coke or even a pillow.

    What I resent are poor on time performance (caused in large part by the ever-smaller aircraft doing the flying from and to congested airports); dirty aircraft; bags going missing; rules that apply and then don’t (I know, Jared, that you like those); surly staff made surlier by longer hours and less pay; and the fact that management of these airlines fail to fix these real problems because they never fly coach, never wait at airports for delayed aircraft, never check bags, never get bumped, and always enjoy the trip from seat 1A.

    Who really cares about peanuts and meals on what is, quite simply, just a flying bus? I want on time departures, on time arrivals, helpful staff, and safe, clean airplanes. When they get these things right to transport me and my bags efficiently, I’ll stop complaining.

  6. onlinetravelreview

    Marla – I should’ve included you on the good reporter list :)

    Everyone else – I agree with the larger point that people are unhappy with airline operations. There’s a million reasons why there’s overcrowding and delays and surly employees. Some of those problems are the airlines’ and some are not. My biggest gripe, actually, is that they have screwed over frontline employees to the point where they’re taking it out on passengers. That is bad news. If flight attendants and gate agents were nicer (in general – there are plenty of nice ones), people would complain a whole lot less about the other stuff. I’m not blaming the front line staff entirely – they have every right to be pissed – but they’re in a customer-facing business and they should be taking their anger out on their employer, not on you.

  7. The most frustrating thing to me, as the non-professional traveler, is the utter and complete lack of communication when it comes to delays. Someone has to know why the flight is being delayed (someone told the gate agent to change the time on the board), just pass that on to us. If I know what’s going on, I’m much less likely to become pissed.

  8. I’ve been saying for a while that “service” has two faces. One face is the pretty stuff: meals, drinks, clean seats. US carriers, across the board, are pretty weak there — when compared to European or Asian carriers. The other face is things like frequent flyer programs, 1-800 lines, and websites stuff — where actually US carriers do pretty well. Try getting credit for a flight on some European frequent flyer program — good luck. I think Jared is right about “front line” service as well, where, despite many exceptions, the workers are surly and unfriendly. I don’t blame them, and it really says something about the priorities of management that this failure is not being addressed.

  9. Margaret Nahmias

    United is in trouble, even Glen Tilton is booted, will the new CEO be able to cope with the mess? (Just ask Bruce Lakefield, the former US Airways was like Humpty Dumpty when he got to it) Their costs are among the highest. Don’t underestimate the power of labor. Discontented labor can cause major problems Everyone targets US Airways as the one most like to go bankrupt. I say if United cannot contain their cost they are for major liquidity squeeze. US is the whipping boy, unjustifably so in my opinion if you only care about getting from point A to B safely. US needs to play up the positives at litte more. I am glad makes the employee newsletter available publicly for that reason. If you read the most recent issue you would have known that some of mechanics won awards for their work and the reason for their on time performance(great ATC work). Everyone complains about the appearance about the planes because they have never flown West metal. That should be solved with the delivery of new aircraft.

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