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United's Scott Kirby talks:
United Airlines president Scott Kirby is not modest when it comes to his aspirations for the carrier, which he joined about three years ago when he left the same position at American Airlines. "We're not only going to be the best airline in the world but the best airline in the history of aviation," he said. It's a bold pronouncement, but Kirby has developed a reputation in the airline industry as an executive who understands metrics and growing revenue, areas where United has seen some recent wins. In a recent interview with BTN transportation editor Michael B. Baker, he laid out his road map for that assertion, from where he started with the carrier through the coming years.
BTN: There was some skepticism when you announced plans to grow domestic capacity out of your hubs. How has it played out so far?
Kirby: We talk about the growth plan a lot, but it's been a much bigger plan than growth. Growth was our 2018 plan. 2016 was about rebuilding the culture with [new CEO] Oscar [Munoz] getting the trust of employees. 2017 was about running a great operation because you can't embark on growth until you are reliably running. People have said for decades, as long as I've been in the airline industry, that United has these great hubs and all this great opportunity and never realized it. The reason was they didn't really grow the hubs. While Wall Street reacted negatively, we were highly confident, and it's been gratifying to see it work so well so fast and also to see that the operation continues to run well. Switching from a no-growth mode to a growth mode is not easy, and our ops team did a great job. Employees feel good about the future.
BTN: So, what is the 2019-and-beyond plan?
Kirby: We're going to continue doing the things we've done: the cultural engagement, the operations. We have a lot of cool ideas that won't happen overnight, but it's doing things like being able to keep the operation running when today the operation closes. What can we do to run even in inclement weather that today shuts down the operation? Moving forward, it's more about changing the customer experience. Some of the down payments on that are the [Bombardier] CRJ550 and the investment in all the corporate preferred programs: PassPlus and our new meetings programs. As important as all that is, what we're doing with our employees [also is important]. We're spending a lot of money this year to bring 25,000 flight attendants to Chicago for an event that's an event, not training. It's fun and meant to inspire them; it's really meant to be focused on customer service.
BTN: Travel buyers' scores for United in BTN's airline survey last year showed improvement. What are you hearing from your corporate customers?
Kirby: We hear the same thing: not perfect, but significant improvement. What I hear most from corporate customers or Global Services customers has been three things. Almost all of them will say something about the operating reliability, that they can tell the difference. The most significant: They almost always say they feel different with the employees in the way they interact with customers. The third is has been a criticism, but I'm to the point where we have a better response. That's been about Wi-Fi. We've made huge investments. I've told the team that money is no object when getting Wi-Fi. It's not great anywhere in the world, but we've made huge improvements. The take rate last quarter was up 27 percent. The number of issues or refunds are down 65 percent. Resetting the systems, when a flight attendant has to reboot the system, is down 67 percent year over year in the month of July. We listen to that feedback. Overall, it's really quite positive.
BTN: What's the focus of your global partner strategy right now?
Kirby: The overarching strategy is to provide a better product to our customers, get them places that we can't get them and get them more options to use their frequent-flier program. We have a great set of partners around the world. Star Alliance definitely has the best hubs; Frankfurt is the best in Europe, Narita and Beijing in Asia. We just have some incredible partners. South America is the area where the American and Latam partnership, because of their size, has been bigger. We have a long history with Copa, a phenomenal partner and not as recognized around the world. They are one of the best operators in the world, and Pedro [Heilbron] has to be one of the most underappreciated CEOs in aviation—what he's done to build that airline. We have a great partnership with Azul, as well, and getting Avianca stitched into that. That four of us combined can really take a run at the American-Latam positioning.
BTN: What is the status of the joint business with Copa and Avianca?
Kirby: We've announced it, but we haven't filed. It will be sometime this year. But we're working closely with them.
BTN: Where are you on the rollout of Polaris business class?
Kirby: On average, one airplane is getting converted every 10 days. We wish it could be even faster. The only negative on Polaris from the customer is, "Why isn’t my airplane done yet?" We've also expanded the Polaris footprint by taking 17 [Boeing] 767s and putting ... more business class seats on those airplanes for premium markets. Eighty-five percent of the people flying business class to the United States from overseas are coming to one of United's seven hubs, which puts us in a unique position of being the airline that is in a natural leadership position for developing products for international business class and business travelers in general. We're also doing it with the CRJ550, which is the other end of the spectrum but will be a unique premium product for smaller markets.
BTN: What's your strategy related to New Distribution Capability standards at this point?
Kirby: We want to be on every shelf for however a customer wants to access it. From a technical perspective, NDC is going to create products and access that aren't possible through the traditional distribution channels. We view NDC as an enabling tool to offer more products and services to the customers that want them. We don't view NDC as a way around the distribution channels. The technical capabilities of NDC are just going to allow features and products that we're going to roll out that if you don’t have NDC or access to NDC from some channel, you're not going to be able to sell them. We view it as mostly about being able to sell more products and offer more service than we can.
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