From what we have seen from United Airlines in the last week, as well as throughout this year, they are clearly positioning themselves to be the best in America and in the world.
Under the guidance of CEO Scott Kirby, 2023 has been a year of revolutionary change at the airline, and it remains clear that the shift in focus is definitely helping it.
Without further ado, let’s get into it…
United Airlines in 2023 So Far…
United Airlines started out 2023 on a strong footing, having ended the fourth-quarter last year with a adjusted net profit of $811m.
This was a significant figure to achieve, especially as the world was still in the first few months of reset following global shutdowns caused by the COVID-19 pandemic.
By February, it was revealed that the airline was set to take 149 new aircraft throughout this year, of which they have taken 61 so far, as per Planespotters.net data.
However, the first quarter of the year financially didn’t go as well as they had hoped, posting a $194m loss for that period, with CEO Scott Kirby remaining hopeful due to revenues rising 51.1%.
Now, by quarter two of this year, this was completely turned around, with United Airlines reducing it’s net debt to 2019 levels, and it’s adjusted earnings per share expected to rise from $11 to $12 for the full-year.
However, such growth and successes were instigated by the launch of new profitable routes around the world, as well as at home in America, particularly through the addition of flights out of Denver as an example.
In that same month of July, the airline doubled down and expanded its transpacific network for the Fall of this year, highlighting the significant demand experienced, and therefore revenue capture as a result.
Even earlier this month, the airline has been focusing on securing the long-term future of the business through it’s United Next program, and there were two examples of this just in the month of October so far.
The first, although not all responsibility can be taken by United Airlines in this, was through the signature of a new pilots contract by the unions for a new contract deal that adds a total of $10bn to their securities.
It is something that the airline has agreed to and acknowledged, as without the people, their plans for ultimate growth cannot be realised.
The other element came just this week when an order for 110 aircraft from Airbus & Boeing was made, which catered to the short, medium, and long-haul travel aspects of their network.
So, as far as things go, it’s gone pretty well for them this year so far.
Doubling & Even Tripling Down on Global Travel…
As we remember from December 2022, the order from just this week isn’t the only purchase United Airlines had made in the last 12 months.
The United Next program has been going on for quite some time, of which part of that chapter was an order for up to 200 Boeing 787 Dreamliners.
But this doubling down, and to some extent even tripling down, on global travel shows that United Airlines is planning ahead for the long-term.
“Our planning and focus on the long term have helped us surge past other airlines that stood still”, CEO Scott Kirby said.
The airline is expected to receive around 800 brand new aircraft by 2032, which comes round to an average of 88 aircraft per year, if you forget the decimal points of course.
Whilst some of this order will be used for fleet renewal, notably on the Boeing 767 & 777 families on the long-haul side, with some older Boeing 737 and Airbus aircraft they have on the short-medium haul, such elements are quite exciting for the carrier.
But of course, that is just one piece of the pie. What about global connectivity?
Back in January, following a major announcement, United Airlines filed its codeshared routes to the U.S Department of Transportation for it’s new partnership with Emirates.
This has since been expanded already, with intention for routes to Mexico to be included into this.
The American carrier has also partnered up with Azul Airlines in Brazil to enhance travel and connectivity within South America, and even went as far as signing a transborder joint agreement with Air Canada back in February.
So, as you start to note the announcements and the milestones, this is another important aspect of why United Airlines is positioning itself to be the best in the world, as well as in America.
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Not Just About The Externals: What About Their Product?
Another element to approach this from is the product side of things with the airline.
From its economy offering, all of the way up to it’s Polaris suites, it highlights the duty of care that they are taking in aiming to provide the best in the world.
Route networks and ordering aircraft will only take you so far.
What is important to big airlines like United is that the product onboard makes the passenger mesmerised by the service and also the seat that they may sit in for 1, 2, 3, 8, 10, 12 hours.
If they can get that right, then that is where the brand awareness begins to kick off significantly, and it did with the introduction of Polaris and new Economy & Premium Economy cabins onboard.
Since their scandal in 2017 when a passenger was dragged off one of their flights, they have been striving to provide better customer service, and that is also an important part of the equation for product too.
As per Travel Market Report, United Airlines’ satisfaction rating has jumped up two percentage points this year already at least, from 75 to 77.
Whilst that may not seem like a lot, in the context of United Next, and the next 10 years for the carrier, it is something that will be continuously worked on to improve the product even further in that space.
Could We See Further Responses from Others in the US3?
The other two airlines of the well-known term “US3”, American Airlines & Delta Air Lines, will no doubt have been monitoring what United has been doing over the last 12 months.
On the Delta side, they have also seen considerable international demand, which has resulted in new routes and service resumptions to be implemented.
They have even been fighting American Airlines on the pilots front, with an exodus being faced earlier on this year.
But when you compare it to the fight against United Airlines, there hasn’t been that much reaction in terms of long-term thinking.
United appears to be the only carrier at the present moment that is thinking as far as 10 years away through the Next program, and that will be something which will no doubt be addressed over the next 12-36 months.
Because if not, then the airline will simply run further ahead from the other two at an unprecedented rate.
United Airlines Clearly One To Watch Over The Next 10 Years…
What remains clear, and has been backed up even from announcements made this week, that United Airlines is going to be one to watch closely over the next 10 years.
From securing the long-term longevity of the business through aircraft orders, to offering a significant hard product across all classes, they seem to be on the right path.
Looking ahead, all eyes will be on them to see what new routes will be developed and generated over the next decade, as well as what other tricks they may have up their sleeve to become the best, not just in America, but in the world.
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