Old 06-12-2017, 12:35 PM
  #153  
mdcny
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Joined APC: Aug 2013
Position: CRJ FO
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Originally Posted by Boeing Aviator View Post
Kirby letter to United Emoloyee's

Congrats to all Air Whiskey pilots!! After 32 years - 6 airlines and 2 mergers in this industry I understand the angst and stress you guys have been going through. Welcome to the United Family, hope to see you in the right seat flying with me someday soon!

Dear Team,

To be the best airline in the world, there are two "must haves": the best people and the best route network. There's no doubt in my mind that we have the best people. Since joining United I've been consistently impressed by your energy, your enthusiasm and especially your ambition to compete and win.

We have the greatest route network potential in the world, with hubs in the five airports with the highest passenger volumes in the U.S. strengthened by two fantastic hubs at IAH and DEN. But we haven't fully realized the potential of that network... yet.

Despite all of our advantages, what's happened over the past five or six years is United has been shrinking, while our competitors have been growing at our expense. In particular, while we maintained our industry-leading international network, we've been shrinking domestically. In the same time frame, the domestic U.S. market has gone from being a historic money loser to being the most profitable place to fly anywhere in the world - and because we’ve been shrinking, we haven't benefitted in the same manner as our competitors.

This must change. Now, we're going to continue on our journey to become the world's best airline by realizing the full potential of our network. The foundation of any airline is the route network, and we're going to start realizing our network potential in two ways: first, by improving connectivity through our hubs, and, second, by competing and winning in our local hub markets by offering products and flight times that appeal to customers, especially frequent business travelers.

Network connectivity

One of the most important things to make a hub successful is connectivity. The more connections we offer and the higher the percentage of connecting customers we have flying through the hub, the bigger our competitive advantage.

When we add a new route to a hub that brings in more connecting traffic, it brings more customers to all of our other flights at that hub. All of our other flights become more successful, and then we can upgauge flights or add destinations that wouldn't have been profitable before. Those upgauged flights and new destinations, in turn, bring more customers to flow back through the network so we can add a new round of destinations, frequencies and upgauges, and the cycle goes on and on. It's exponential, and it becomes an upward spiral.

As an example, DEN is our most profitable hub today, and that’s largely because it's also our highest percentage domestic connecting hub, which has allowed us to continue to grow there over the past few years.

Another good competitive example of how connectivity helps us compete and win would be a flight from ORD to LAX, where we might have 60 percent of the people on that flight connecting from 35 other destinations. Even if American (AA) offers the same flight, at the same time, if we're bigger and they can only connect passengers from 25 other destinations versus our 35, we'd have an extra 10 to 15 customers for which AA can't compete. That's the difference between a flight that's really profitable for us and a flight that's break-even or loses money for them. And the competitive advantage is even stronger versus low-cost carriers that can only compete with us for local traffic.

Profitable growth is another important way we’ll be adding connectivity to our hubs: For example, every flight we add at ORD results in up to 80 additional possible connections. Another way to add connectivity is to realign the banks of flights. We'll be realigning banks at several of our hubs, including ORD, IAH and EWR, to maximize the total number of connecting flights for our customers.

Competing and winning in our hubs

We also need to compete and win in our hubs by offering local business travelers the customer experience and convenient flight times that will make them loyal to United. This includes upgauging our flights in highly competitive business markets, like between one of our hubs and that of one of our competitors.

A decade ago, from EWR to ATL (Atlanta), we flew eight flights a day on Boeing 737s. Delta (DL) flew 11 flights a day on mainline equipment. ATL is a bigger hub with more connectivity, so its 11 flights versus our eight made sense, but we still had a competitive business schedule for customers that lived in EWR, and when our frequent flyers in EWR wanted to go to ATL, they chose us. By 2013, we were flying six regional jets a day. Guess what happened then? Many of our EWR customers switched to DL, because they didn't want to fly on regional jets and we didn't have the frequency to support their business needs. That didn't just happen in the EWR to ATL market, it also happened in markets from EWR to DTW (Detroit), MSP (Minneapolis), DFW (Dallas/Fort Worth), CLT (Charlotte, North Carolina), etc., and across the board in many of our competitive hub-to-hub markets.

We are going to fix that. By this summer, we'll return to flying eight mainline EWR-ATL flights each weekday at times that are convenient for business travelers. Additionally, summer over summer, we have increased frequencies between ORD and PHX (Phoenix) by three flights and between ORD and MIA (Miami) by two flights. This is something we need to do across the system in competitive markets. It's not going to happen overnight, but this is the path to our future success.

Using regional feed to support mainline growth

At the same time, regional jets play an incredibly important supporting role in our network, because they help us serve small destinations profitably and feed traffic we wouldn't otherwise have into our hubs. The key is using them in the right markets. For example, a regional route from ORD to Rochester, Minnesota (RST) isn't a big enough market to support a mainline aircraft, but our ability to serve that small city with the right size airplane allows us to feed thousands of additional passengers through ORD and beyond.

Regionals are critical to growing connectivity at our hubs, feeding more traffic to the mainline and using that to grow the mainline. Since our regional partners are flying with the United brand painted on the airplane, we have to hold them to the same high standards of reliability and customer service that we hold ourselves to at the mainline. Our current regional partners provide great, seamless service and reliability in feeding today's network. But we have to use them in the right markets, not places like EWR-ATL.

To ensure we have the regional lift to deliver the increase in connecting traffic we need, we are partnering with former United Express carrier, Air Wisconsin (ZW). We expect that ZW will start flying early next year and have approximately 50 regional jets for us by next summer, with the expectation of adding 15 more in the future. They currently fly these aircraft for AA, so this is a great addition for us in two ways: We get to add these additional aircraft feeding small-city traffic into our hubs, and AA loses lift that used to be feeding its hubs. We plan to use these aircraft in the right kind of markets - meaning we'll be adding more small cities - such as RST and COU (Columbia, Missouri) - that can feed additional profitable traffic into our hubs that in turn will help us grow the mainline.

It's important to note that we are not growing our fleet of 50-seat aircraft, but as other partners have upgauged some of our 50 seat aircraft to 70- and 76-seat aircraft, our new partnership with ZW will enable us to maintain a consistent level of flying across our domestic network as we also upgauge and grow the mainline.

What's next?

While United has spent several years shrinking and being a docile competitor, starting this summer, we’re going back on offense! We are going to compete and win across the board in our hubs. That game plan kicked off with a number of new domestic and international flights that went on sale Saturday for flying beginning this summer. In total, we’ve added service to 31 destinations across the U.S. and Europe, including the addition of four all-new destinations: CMI (Champaign, Illinois), COU, RST and STS.
Here's a map of the additional flying we're announcing for this summer:

Map displaying additional flight announcements for
this summer

And here's a breakdown by hub, including the fleet types we're using for each of these new routes:


New
Destinations
New
Markets
Seasonal
Extensions
Frequency
Additions
DEN
COU 1X CRJ
SBP 1X E75
KOA 1X 752
ABQ #5 E70
FLL #2 738
MCO #4 320
TPA #2 739
EWR

SMF 1X 319
SLC 1X 738
ATL #7,8 738
DTW #7 E75
PDX #2 320
IAD


FLL 1X 738
JAX #3 E75
PVD #4 CR7
PWM #3,4 CR7
ROA #3 DH2
IAH

SGF 2X ERJ

ATL #8 E75
CHS #3 E75
ORD
CMI 3X ERJ
RST 3X ERJ
COU 2X CRJ
GEG 1X 320
CHO 1X CRJ
RNO 1X 319
TUS 1X E75
FLL #3 739
RSW #2 738
SFO
STS 3X CRJ
GEG 2X E75
BDL 1X 319
CVG 1X 320
DTW 1X 319
MSY 1X 320
MUC 1X 788
FCA 1X CR7

I’m excited that we are adding flying at almost all of our hubs this summer. While I wish we could realize all of our growth aspirations overnight, it will take several years and we’re prioritizing growth in competitive markets in the near term.
ORD is a great hub and a competitive battleground where we’re going to grow basically as fast as the city can get us gates. With the exception of LAX, all of our other hubs also get varying levels of growth with new destinations and frequencies. Remember the upward spiral: Growing our hubs makes all of our existing flying that much stronger.
We are not adding any additional flying at LAX at this time because we need more gates before we can embark on a growth journey there. We are committed to LAX for the long game - exemplified through our recently remodeled and reopened United Club -- and we’re working hard to secure additional facilities that will give us the ability to compete vigorously. I believe in the future of LAX and its critical role as one of our hubs, and, as we are able to get commitments for more gates, I’m looking forward to growth in LAX.
In addition to our domestic growth, we're also introducing a seasonal SFO-MUC (Munich) flight for the first time. Our joint venture (JV) partnerships are important to United's success, and we need to work cooperatively with our partners to make all of us more competitive. Through these government-approved partnerships, we jointly coordinate our schedules, sales, marketing and customer service to offer our customers many more travel options than we would otherwise be able to provide by ourselves. By cooperating closely and sharing the economic benefits in these relationships, we provide much better access for all customers to the broader networks of both United and those of our important partners. I haven't been shy about telling you and our JV partners, however, that the relationships need to be balanced - both financially and in terms of the amount of flying each airline does. Historically, United has been shrinking while our JV partners have been growing. The addition of this SFO-MUC flight is a down payment on restoring the equity in flying JV routes we all want and deserve.
We have a lot of work ahead to transform our network into the best in the world, but this summer is a great start. In the meantime, as I travel around the system - and I am doing a lot of that - I have never seen a team of aviation professionals working harder, smarter and more collaboratively than all of you to make United the world’s best airline for you, our customers and everyone we serve.
Let's go!
Scott
p.s. I'm sorry for the really long note, but I'm just so excited about the future here at United that I couldn't help myself.
Wonder if they will ever open a new hub altogether like DL did with SEA. One area UA is lacking is the southeast US.
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