After reporting a 30% increase in profit even with a higher fuel bill, United Airlines finds itself in a strong position.
United’s stock is up 24% this year. Meanwhile, Delta has dropped 5% and American has dropped 36%. Although critics were skeptical of President Scott Kirby’s domestic capacity expansion, it seems to be working.
A flight attendant from United shared the following email she reviewed from CEO Oscar Munoz concerning the excellent numbers.
Dear United team members,
United’s third-quarter financial results were some of the best we’ve delivered yet, which we will discuss tomorrow during our third-quarter investor calls and will be followed by our Earnings Live event. While fuel prices remain a challenge, since we set forth on our multi-year growth strategy in January, United’s stock has materially outperformed major U.S. rival carriers.
While we missed our ops targets, except for MBR, we still outperformed most of our competitors on all metrics, coming in second and well ahead of Southwest and American.
I think it is important to distinguish between the factors under our control and those that we cannot control.
When we do that, it’s clear just how outstanding your efforts have been this quarter in the face of really tough challenges.
We had a long summer of very high load factors. A series of bad weather conditions across the system, especially in Newark – punctuated by a series of hurricanes and storms – took a toll on our operations.
I’ve made a personal mission to travel as frequently as I can throughout the network and I’ve met with so many of you, in galleys, kitchens and ready rooms system-wide. I’ve heard understandable frustration in people’s voices and my goal has been to relay a very direct message about the challenge and opportunities in front of us.
Simply put: External factors like weather and fuel affect all airlines and we can’t control that. What will set us apart from the competition is how we deliver on the factors we can control.
For example, we did control our JCBA implementation. We cleared that hurdle and are finally flying on common metal, allowing us to operate more efficiently and reliably.
We do control the quality of our customer service and that matters more than ever during IRROPs. We have the most exciting pipeline of innovations and improvements in the industry – from “Better Boarding” to “Every Flight Has a Story” to “In the Moment Care.” You’ve put those tools to the absolute best use, consistently improving our customer feedback, even under really trying circumstances.
We do control how we run an efficient airline. I appreciate the zeal with which so many of you have taken the effort to make us as efficient as possible.
The test of what we’ve built is not how we do when things are easy, but when the going gets tough.
That’s what you’ve demonstrated this quarter. As we head into the final quarter of 2018, we have an unprecedented opportunity to realize the full potential of this airline.
Let’s clarify some terms in Munoz’s letter above.
- JCBA means Joint Collective Bargaining Agreement. Former Continental and pre-merger United flight attendants now operate under a single contract, meaning crews will no longer be segregated by former division. Instead, crews will be mixed as seniority lists have been merged.
- “Better Boarding” refers to the new boarding process I outlined here.
- “Every Flight Has a Story” refers to the new specific updates for delayed or cancelled flights I outlined here.
- “In the Moment Care” refers to the FA app that allows for special recognition of frequent flyers and instant compensation I outlined here and here.
I stand by what I wrote last week:
…I cannot help but feel that United has turned a corner when it comes to customer service. Operationally, my recent 3.5 hour delay was my first major delay of the year. What a difference from just a few years ago. Better operational performance naturally leads to better customer service, because customers have less to be angry about. Even so, I’ve logged over 90,000 United miles already this year and I generally witness excellent service when I fly United…
It truly has been a good year to fly on United. Let’s hope the momentum continues.
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