Fighting back

“Our new product introduced on Australia in November last year,” United’s general manager for Australia and New Zealand, Alison Espley, told Australian Aviation. “We’ve introduced it right across the fleet – our 767s are completed, the 747s are almost completed, and the 777s will be next.

“We’ve refreshed economy with new LCD screens and new cushions, and we’ve also added premium economy which we’ll have on all of our aircraft throughout the fleet,” she added. “It’s a product that offers extra legroom – we don’t focus on the meals or anything like that, just the extra legroom, and it gets allocated to our most frequent flyers rather than being sold as a separate product. But it is sometimes available for sale at the airport if we have seats available – the check in staff may offer it to upgrade to for a small premium.”

The airline has also upgraded its business and first class products. Business is now a fully lie-flat bed with well padded cushions and a more comprehensive inflight entertainment system on a larger LCD seat-back screen. The business class seats are laid out in a 2+4+2 arrangement on the main deck and a 2+2 on the upper deck, with half of the seats facing the rear.

The first class has also been updated with more padding in the seats, lighter materials and much simpler to use seat controls. “Our first class suite had been around for about 10 years – I think we were one of the first to introduce something like that, but yes, it was time for something totally new,” Espley said.

United says it has bucked the trend on the Pacific by maintaining its load factors, albeit while matching many of the steep discounts being offered by its traditional and newer competitors. “If you were to ask any carrier in the world how things were at the moment, you’re going to get a degree of ‘gosh, wow’ and all the rest of it, whether its global recession or whatever,” Espley explained. “But what I can say is that, in May and June of this year, our load factors are actually up on the same months last year. And, we’ve got an extra 50 seats in economy as a result of our reconfiguration, so we’re actually very comfortable with our loads.”

But Espley agrees that the increase in the number of seats in the Pacific through new entrants V Australia and Delta and the introduction of the A380 will see new challenges for the airline. “Any penetration into our market by new carriers has been minimal so far,” she continued. “I think the key factor for us is our network in the US is our strength – many of our customers connect beyond LA and San Francisco and will continue to do so, so in that perspective we are way ahead in terms of options. The next largest carrier on the west coast in American, and they don’t offer anywhere near as many connections as we do.

“But we’re definitely not waiting and seeing. Firstly there’s nothing wrong with competition – competition is good, and we operate in competitive markets all over the place. I think for us the key focus is to keep doing what we’re doing, and to strive to do it better. We’ve committed to competing vigorously on price, and we’re doing that. But we’re also focussing on the network, and on our distribution channels – we’ve been here 23 years and we’ve got some well established relationships with trade, that’s business and leisure agents – and we’re really looking after our frequent flyers with lots of offers on at the moment.

“We’re just focussing on we’re doing rather than what the competition is doing, that’s my approach anyway,” she said. “But an over 30 per cent increase in capacity is fairly significant, so I really don’t know, as long as there’s room for us. Our approach is that we’re the incumbents, so we’re happy as long as there’s room for us.

“One comment I would make is that, I actually feel pretty confident about where we stand. Even after what we’ve been through, I think that US carriers in general have had to deal with pretty challenging times in the US and globally, and have had to make disciplined business decisions. I think what differentiates us is that we’ve also been investing in our product at the same time – we’re the only US carrier with flat beds, premium economy on every flight, and we have very strong cost base. United has had to make a lot of difficult decisions in the last few years, where as a lot of international carriers are only having to make those decisions now and learn to operate with less people. So in a way I feel like we’re ahead of the game.”

The airline has its own Red Carpet lounge at Melbourne for its single daily flight, and utilises Air New Zealand’s excellent lounge at Sydney for its two daily services to LA and San Francisco. “We spent money on our Melbourne lounge in 2008 by upgrading both the first class area and bar area, so I guess there are no plans for it in the short term, but in the longer term we would look to utilise a Star Alliance lounge if that were to be established,” said Espley. “In Sydney there are two very large and strong Star Alliance carriers operating in the market (Air NZ and Singapore Airlines), neither of which are home carriers. Their lounges are very nicely located next door to each other, and from our perspective, we choose to use the Air NZ facilities. As for a Star Lounge at Sydney; as you know we have them around the world in various places, so I guess it all comes down to rental periods, lease times and that sort of thing to make it all happen.”

United says they have no plans to supplement the nearly 20 year old 747s on the Pacific with their newer and more efficient 777-200ERs as the new cabin products are introduced onto that fleet in order to compete against the newer competition, although they haven’t closed their mind to it either. “The most important thing for us is having the right onboard product,” Espley told us. “I think that we’ll continue to assess what the demand is and what the capacity is on the route, but there are no plans to change types at this time.

“New is always going to be exciting and different,” she said pragmatically. “I’m sure in due course we will be making the right decision for our fleet, but in the meantime, I think we’re showing people comfort and safety on board. I think we’ve set ourselves up for success in the future, and when the time is right we’ll order new aircraft and choose the product which suits us best. It’s a continual process for a company as large as ours.”