United's wooing of business travelers paying off

Rohit Khare (khare@mci.net)
Sun, 10 Aug 1997 02:12:32 -0400

United's wooing of business travelers paying off

United Airlines may be backing off its 32-year-old slogan, ``Fly the
Friendly Skies,'' but it is trying to make its skies friendlier to one
group of fliers: high-fare-paying business travelers.

``One of the things we're trying to do is to pay a lot more attention to
customers who pay us most,'' United President John Edwardson says.

So United will spend $400 million this decade to give business travelers
bigger and better seats, better food, special pre-departure service to let
them skip long lines of befuddled non-business fliers, better lounges, more
frequent-flier benefits and special perks such as showers in terminals.

United is even sending flight attendants to class at Ritz-Carlton hotels
and other posh locations for lessons on how to serve meals in business and
first class.

The service improvements, along with the new image campaign that sidelined
the Friendly Skies slogan, were unveiled in late May. They've begun to pay
off: The second quarter, United's revenue per passenger mile grew 1.2% to
12.59 cents a mile even as its expenses per seat mile grew less than 0.4%
to 8.92 cents. Its revenue is growing faster than its expenses, mostly
because it's attracting more full-fare-paying business travelers.

Business travelers account for about 40% of United's business by head count
but 72% of its revenue, says David Coltman, United's senior vice president
of marketing.

By contrast, the other 60% of its travelers, many of them occasional fliers
or ``mile-collecting vacationers,'' as United calls them, are good for only
28% of revenue.

More important, the hardest-core business travelers, dubbed ``road
warriors'' by United, generate 37% of revenue even though they represent
only 6% of its customers, Coltman says.

They are the audience to which United must make amends.

United's own customer surveys found that these are the people who are least
happy, and the most frustrated, with air travel. Coltman says he was
``stunned'' at the degree of cynicism and discontent among United's road

``Air travel doesn't seem very friendly, so talking about friendliness
makes us appear (to business fliers) to be out of touch with what their
true experience is,'' Coltman says.

By David Field, USA TODAY

Rohit Khare /// MCI Internet Architecture (BOS) /// khare@mci.net
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