Dear Mr. Kirby,
A very Happy New Year to you. We met and chatted for quite awhile at the opening of the new United Club in T7 at LAX in November 2016. I admire your vision to make United a leading airline of the world.
Your tenure has been marked with exciting new longhaul and domestic route additions and the introduction of the new Polaris soft product on longhaul international flights. But recently we have seen a number of small but unfortunate cutbacks that I wish to address.
FAs ushered in the new year with the following memo:
Effective today (January 1, 2018), in addition to the already eliminated Grand Marnier, the following other liquors have been eliminated from liquor offerings on all worldwide flights as part of the continued service enhancements: Jim Beam Devil’s Cut, Canadian Club Reserve, Courvoisier VSOP, and Crown Royal.
The press office has told me–
We did remove some of the less popular liquor selections which will allow us to reduce some of the complexity from the operation and let us evaluate new products.
And while I will not nitpick, we’ve also seen recent cutbacks in first class dining: the elimination of meals on some routes and less choice on others. Furthermore, we have not seen a new Polaris Lounge open in over a year.
My concern is that you are unnecessarily taking a bean counter approach, similar to what Oscar Munoz’s disgraced predecessor Jeff Smisek did. Doesn’t Smisek provide us a perfect case study that United cannot cut its way to growth? Are United’s profits not robust enough to justify a continual improvement of the soft and hard product that will win long-term customers?
Allow me to use an analogy to make my point. My wife and I bought a fixer-upper house in Los Angeles. It needed new plumbing, new electricity, and a new foundation. It also needed a fresh paint job and the garden looked like a jungle. We hesitated over spending the exorbitant amount required to get the job done quickly and correctly. Surely, we deduced, we could gradually fix things and still enjoy our home. But we soon found that was not possible…not when the laundry room floor was sloping downward and the lights were flickering.
We embarked upon a massive effort to make our house beautiful, practical, and operationally efficient inside and out. And we succeeded. Even better, if we sold our house today we would reap a huge profit, exceeding the sum of our investment plus the average appreciation rate of homes in area. But more importantly, we have a house that we love and that has become our home.
My point is this: in order to create and sustain a world-class airline, you must be willing to make the investment in it. And why not now instead of later? Is cutting meals and liquor really necessary? Wouldn’t the more prudent course of action be to accelerate Polaris seat installation and lounge completion so that more passengers will actually pay for business class fares? Even if that reflects poorly on your quarterly report, can’t your forcefully justify it?
After all, United shares tanked 12% after Munoz admitted you dug yourselves “in a hole” on a recent earnings call. By prolonging the very sort upgrades that will lift you to sustained long-term growth, you continue to dig yourselves in a hole versus your competition, both domestic and international.
I’m heartened that you quickly realized many of the drawbacks of Basic Economy and have somewhat rolled it back. I trust you come to a similar conclusion for the recent onboard cutbacks and more importantly, will embrace that you can create a profitable airline by offering the best onboard product, operational reliability, and service. I believe United can be an industry leader in all three areas.
Thanks for reading my note and I wish you all the best in 2018 as you continue your important leadership role.