United Airlines Boeing 787

United, Boeing Executives Talk Aviation

United Airlines Boeing 787 Livery

United Airlines Boeing 787 Livery (image courtesy of United Airlines)

United Airlines is working to improve customer satisfaction by improving the reliability of its flights, and Boeing says the U.S. government next month needs to reauthorize an international credit agency that not only helps the aerospace giant sell airplanes but supports American businesses and jobs..

Those were among the topics that executives at United and Boeing talked about during a panel discussion on aviation Thursday at the Chicago Forum on Global Cities held at the Art Institute of Chicago.

United often ranks poorly in customer satisfaction surveys, and more broadly U.S. airlines rank worse than many foreign carriers, especially in Asia and the Middle East.

Jim Compton, United’s chief revenue officer, said the main driver of customer satisfaction is not luxuries but an airline doing what it says it will do, especially getting customers to their destinations on time. And he conceded United might have underinvested in its operation in past years.

“We know that we can do better, and we continue to do better,” Compton said.

However, United and other airlines have to deal with factors beyond their control, such as summer thunderstorms and air traffic control issues that delay flights, Compton said in an interview after the forum. In those cases, adding technology such as onboard Wi-Fi helps the airline stay in contact with the customer and work through problems — in the case of a missed connection, for example.

“The other part of focusing on overall reliability is focusing on how we recover and how we put our customers into that equation,” Compton said.

Another example of United concentrating on customer satisfaction is upgrading its food, on planes and in airport lounges, he said.

“Improving customer satisfaction is about consistency and a long-term commitment,” he said. “It’s about being reliable and listening to what your customers want and delivering on it.”

On the controversial topic of international credit financing through the Export-Import Bank of the United States, Dennis Muilenburg, chief operating officer at Boeing, said he’s aware of the criticisms — that the program amounts to corporate welfare that especially benefits Boeing.

However, the Ex-Im bank, which provides loan guarantees that lead to favorable credit terms to foreign buyers of U.S. goods, helps the U.S. economy, Muilenburg said.

“This is a very important economic enabler for our country,” Muilenburg said.

Reauthorization of the 81-year-old Ex-Im bank next month is in doubt, with conservatives in Congress opposed, as are U.S. airlines that don’t appreciate their foreign competitors getting sweetheart financing deals from the U.S. government to buy Boeing aircraft.

Muilenburg said the benefits of such financing go beyond helping Boeing.

“Every dollar that comes to Boeing through this process, 70 percent of that goes out to our supply chain,” he said, referring to companies that sell products and service to the aerospace giant. “It’s 16,000 businesses and millions of jobs across the U.S.”

He added that every country in the aerospace industry has export financing.

“If the U.S. were to not reauthorize the Ex-Im bank, it’s in essence unilaterally disarming in a globally competitive environment,” he said. “It makes no economic sense for the U.S. not to have an export credit agency.”

Boeing 787 Dreamliner. Compton said the 787 aircraft, with its fuel efficiency and modest size, allowed United to fly between new city pairs, including Los Angeles and Melbourne, Australia, and Denver and Tokyo. Those routes have a limited market and would not be profitable with a larger plane, such as a Boeing 777, he said. United was the first North American carrier to take delivery of the 787.

“It just changes the game for us,” Compton said.

Muilenburg said about 270 Dreamliners have been delivered worldwide, and 49 new city pairs have opened as a result.

Another big plus is the customer satisfaction with flying the 787, which is noticeably quieter in the cabin than other jets its size and permits more comfortable cabin pressure, allowing passenger to feel more refreshed when arriving at their destination. “The customer satisfaction on the aircraft is terrific,” Compton said.

Capacity discipline. A hot topic in the airline industry recently, especially among investors, is whether airlines will add too many seats to the system, which forces down fares and, potentially, airline profits.

Compton, in an interview after the panel discussion, said United is focused on so-called capacity discipline, keeping supply in sync with demand. United does that by adding seats at the rate, or slightly below the rate, of U.S. growth in gross domestic product. “For the airline business historically, GDP has been a pretty good predictor of revenue and demand. So, that’s kind of our proxy,” he said. “The success of the industry over the last four to five years, part of that success is capacity discipline.”

However, there’s always a risk of competitors not maintaining that same discipline and adding seats to gain market share. “You’re always concerned with what your competitors are doing,” he said.

Continues at… United, Boeing executives talk aviation

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