Dreamliner Arrives, but Is It Enough For United?
On a day when United Airlines was basking in the glow of being the first U.S. Airline to take delivery of a 787 Dreamliner, its CEO admits his airline has to do better.
“We had a really bad operational Summer, there is no question about it,” said United CEO Jeff Smisek. “We didn’t deliver the product that our co-workers want to deliver. We didn’t deliver the product our customers expect.”
Smisek’s candor comes as the airline tries to rebound from a summer that left customers and investors wondering why the country’s largest airline had become one of America’s poorest performing airlines.
Among the problems:
-Just 64 percent of United’s flights in July arrived on-time. Worst -performance in the industry.
-United’s reservation system crashed for two hours in late August
-Passenger revenue dropping 1-2 percent in the third quarter.
“We threw a lot of change at our folks very quickly. We redeployed aircraft. We did a lot of things all at once,” said Smisek. “We made some mistakes, we fixed those mistakes and we are back. Actually our on-time performance this month is above our goal.”
While September’s numbers may be better, we have yet to see the operational figures for August. When you go in frequent flyer chat rooms on the internet there are plenty of comments from frustrated United customers. Smisek has heard those complaints and vows to do better.
“I think you’ll see us return to a level of customer service and reliability that people expect form an airline like us,” he said.
(Read More: Is the Boeing 787 Dreamliner Truly a Game Changer?)
Part of United’s game plan for improving service and its bottom line revolves around the Dreamliner. Being the first U.S. airline to fly the 787 is nice for marketing that things are changing, but Smisek believes the Dreamliner is truly a game changer.
“From the customer perspective with the interior, big windows, big bins it’s a home run from a customer perspective. And for us as an operator it’s a very fuel efficient and maintenance reliable airplane,” said Smisek.
Boeing sold the Dreamliner to airlines with the promise it would be 20 percent more fuel efficient than the current planes being flown. United has checked with other airlines already flying the Dreamliner overseas and has heard the 787 is living up to expectations operationally.
The question is whether the 787 will truly usher in a new era with better performance for United. One plane by itself won’t change everything and it will be several years before United takes delivery of all 50 Dreamliners it has ordered.
With shares of UAL down 6.98 percent this year while the NYSE Arca Global Airline Index is up 17.8 percent it’s clear investors are not ready to wait years for United to do a better job. They’re looking for improvement now, and Smisek said his airline will deliver.
-By CNBC's Phil LeBeau
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