Originally Posted by feriegel
The summer of 2000 was not the final nail in the coffin, but it drove the premium customer to other airlines and the recipients made sure the perks were such that they did not come back to United.
Certain airlines cater to certain individuals. Southwest caters to people who want to get from SAN to MEM, and they don't mind stopping in PHX, HOU, and BWI. United is completely on the opposite end of the spectrum. They cater to the frequent fliers. The ones who don't mind paying a little extra for some more leg room, some free pillows and blankets, free food on flights over 5 hours, and such. The ones who will drop thousands of dollars on a fully reclined lay flat first class bed seat.
By driving away these kind of customers, United pilots certainly made a mistake. It is easy to say with 20/20 hindsight that Frederick Dubinsky was an idiot, and the pilots made a mistake that hurt them. But in 2000, after United was profitable for 5+ years, the pilots felt like they deserved more. Warning to the wise at UPS, other carriers in contract talks... Use your power, work for quality of life and pay, but don't do anything for a substantial period of time that will hurt you later on.
One interesting graph on Airline Safety was the ESOP graph, and how it related to profits. I know people are complaining about the exec bonuses, but I think this graph is a good indication of what happens when you give your workforce bonuses. United workers got ESOP's in 1994, and they went on a 6 year run of some pretty substantial profits.