United Air­lines of­fers its cor­po­rate cus­tomers a vow of punc­tu­al­ity

▶ United guar­an­tees on-time flights for big cor­po­rate cus­tomers ▶ “If it were a short-term blip, we wouldn’t be making this” prom­ise

Bloomberg Businessweek (North America) - - Contents -

United Air­lines, which has spent much of the past three years near the back of the punc­tu­al­ity pack among U.S. car­ri­ers, would seem to be the last air­line to guar­an­tee busi­ness fliers they’ll ar­rive as sched­uled. Yet United is promis­ing its best cor­po­rate cus­tomers

it will be as re­li­able as Amer­i­can Air­lines and Delta Air Lines next year, or of­fer cred­its for up­grades and fees. The guar­an­tee is based on ris­ing flight re­li­a­bil­ity rates that pushed the car­rier to among the top half of its peers, says Jim Comp­ton, United’s chief rev­enue of­fi­cer. New union agree­ments also could speed per­for­mance. “If it were a short-term blip,” Comp­ton says, “we wouldn’t be making this com­mit­ment.”

The of­fer, which fol­lows a sim­i­lar pledge by Delta last sum­mer, marks a move be­yond air­fare dis­counts and avail­able flights as the main rea­sons cor­po­rate trav­el­ers choose an air­line. A key dif­fer­ence is that Delta’s cred­its can be used to pay fares, while United’s will be good only to­ward seat up­grades and other an­cil­lary costs.

United had been mired in 10th place among 13 U.S. car­ri­ers for on-time ar­rivals for the 12 months ended in Septem­ber, with a rate of 76.5 per­cent, ac­cord­ing to U.S. gov­ern­ment data. But its rank­ing jumped to fifth in Septem­ber, with a rate of 86.2 per­cent. It logged sim­i­lar rates in Oc­to­ber and Novem­ber, says re­searcher Flight­stats.

The car­rier’s new “global per­for­mance com­mit­ment” will cover do­mes­tic, in­ter­na­tional, and re­gional flights in 2016, while Delta’s in­cludes just its do­mes­tic main­line oper­a­tions. United will count flights as on time only if they meet or beat sched­uled ar­rival times; Delta counts those that land within 14 min­utes of their sched­uled ar­rival. Delta spokesman An­thony Black says re­ac­tion to its guar­an­tee pro­gram has been “over­whelm­ingly pos­i­tive.”

United’s com­pen­sa­tion would in­clude up­grades to cushier Econ­omy Plus seat­ing, and waivers of change fees and charges for name changes (let­ting a com­pany trans­fer a ticket to a dif­fer­ent em­ployee). El­i­gi­bil­ity de­pends on how much travel a com­pany does on United. Says Dave Hil­f­man, the car­rier’s se­nior vice pres­i­dent for world­wide sales: “They find this has ev­ery bit of as much value as if we were off­set­ting fares.”

Edited by James E. El­lis Bloomberg.com The num­ber of orig­i­nal TV se­ries that Net­flix says it plans to pro­duce in 2016. The com­pany has a bud­get of $5 bil­lion for the year to de­velop and buy TV se­ries and movies. The bot­tom line Af­ter ris­ing to fifth place from 10th in on-time ar­rivals, United Air­lines is try­ing ar­rival-time guar­an­tees to woo cor­po­rate trav­el­ers.

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