Munoz Optimistic After United’s 2016 Performance Sparks Elevated Customer Experience

Back in June, United Airlines CEO Oscar Munoz laid out some key initiatives to magnify brand loyalty and make United the greatest airline in the world.

Those initiatives are expected to drive more than $3 billion in incremental value to United by 2018 through a combination of cost savings and increased revenue.

These initiatives include:

Commercial Enhancements: Improvements across the commercial organization will drive approximately $1.5 billion of value through increased customer segmentation, updates to its MileagePlus program and modifications to its revenue management system.

Cost Structure Improvements: Upgauging aircraft and installing slimline seats, combined with continued sensible cost management, will drive approximately $1.3 billion of benefit.

Strong Operational Performance: The company expects approximately $300 million of value from running a more reliable airline. This operational improvement will grow United’s share of premium customers, reduce costs associated with delays and cancellations, decrease the number of passengers re-accommodated on other airlines, and improve schedule utility.

Sustained Improvements: Since the beginning of 2016, United has achieved significant improvements in its on-time arrival performance, finishing first or second among industry peers all year. United has achieved top-tier performance in baggage handling.

As United continues its focus on elevating the customer experience, it recently announced the all-new United Polaris business class, free snacks, and transformed airport clubs. For employees, the company has delivered new contracts for the pilots, IAM-represented employees and dispatchers this year and new and improved tools. These and other enhancements are delivering improved service to United's customers, with the company achieving record-high customer satisfaction scores in three of the last four months.

During this week’s fourth-quarter earnings call, where United officials reported a full-year net income of $2.3 billion, Munoz talked about the progress made by the company in the past year.

“In 2016, we put into action our plan to become the best airline in the world and last year’s results demonstrate we’re well on our way to achieving that goal,” Munoz said. “We plan to continue delivering on this commitment by investing in employees, elevating our customer experience, and driving strong and consistent returns for our shareholders.”

Munoz said that new labor agreements for all United employee groups began a “new chapter in how we build a partnership between management and labor while driving higher employee engagement. We also continue to build upon an industry-leading leadership team, a critical step forward in our progress as an agile and innovative leader in the industry. We delivered significant improvements operationally, substantially increasing our reliability and customer satisfaction, as well as achieving the best on-time performance in our history and delivering the most zero cancellation days ever.”

Munoz praised United employees, particularly, for their hard work during the busy holiday season.

“Above all, I believe we’ve begun to change the conversation about United from the question what’s wrong to an optimistic what’s next and that has been the most powerful change of all,” he added.

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