Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek.
No, not that the airline’s doing badly. Not at all.
It’s actually doing quite well, thank you very much.
Its executives, though, are a little worried that the airline isn’t doing well enough.
I know this from a moving interview recently given to Chris Sloan at the Points Guy by United’s chief operations officer Greg Hart and its chief commercial officer Andrew Nocella.
Their own perception, though, is that the airline is lagging in one very important area: It’s not squeezing enough money out of passengers.
As Nocella helpfully explained, United now has better systems. For example, “our new revenue-management system and how we’re approaching segmentation for our customers.”
What’s most exciting about that is we’ve just started, from a product perspective and segmentation perspective. Quite frankly, we’re a little bit behind some of our competitors on this front. As we catch up, I think that’s going to be even more and more meaningful to our results.
May I offer you a meaningful translation to all this?
The airline, similarly to American and Delta, wants to create more segmentation, which means using technology and other means to segment customers according to psychographics, demographics and all sorts of other blissful data parameters.
The hope is to find ways to charge customers more and give them little to nothing that’s new.
In essence, it’s a way to push customers’ boundaries in terms what they’re prepared to pay for.
Which inevitably means more charges for just about everything you used to think was free.
Every seat, every slight betterment — and, for all I know, every slight peppermint — will likely come with a fee.
It’s quite conceivable, for example, that United — and other airlines — will have baggage fees that vary according to the time of day you’re flying. Or even a special, additional, “sitting together fee.”
Now that’s a segmentation that will cause excitement.
Shortly after this interview, United announced it would start charging more for ordinary Economy Class seats that simply happen to be nearer the front of the plane. Well, other airlines do it.
Our hope is to reinvest in a more enjoyable and caring flight experience for you and all of our customers.
That’s quite an exciting hope, isn’t it? If you believe such grisly guff, of course.
Please, I don’t mean to sound as if I’m not impressed. United has indeed, as Nocella said in this interview, created a fine product in its Polaris Business Class.
It has also, though, been extremely slow in actually putting it into its planes and Polaris Clubs into airports.
Oh, but I hear you cry that United has gone against Wall Street’s large, but addled brains and insisted on increasing its capacity. Yes, more seats. Doesn’t that sound good for customers?
Nocella explained that this wasn’t entirely meant to be a people-pleaser:
It’s not a capacity number that we’re trying to shoot for, it is an earnings number. We think the capacity number allows us to achieve the earnings number.
Oh, it’s money that they’re into? Now I’m really excited.