The American airline United Airlines has often been associated with unflattering attributes. Customer service was rated as poor, so poor that a country band once wrote a song about porters smashing a guitar while recharging. The economic model – large hubs, few niches, large carriers, alliances – was also not very original and sometimes insufficiently implemented. United was the problem case among the big four in the US industry, which also includes American, Delta and Southwest.
That could change now. Last week, the airline announced it would make profit again in the second half of 2021. That would make it one of the first to turn around after lockdowns and billions in losses. But CEO Scott Kirby, 53, works on an airline that should be strategically completely different from the old one. As far as Kirby is concerned, United will be a pioneer in sustainability, leaving behind many customer complaints and becoming more innovative than the competition.
The plan has five elements: The airline is setting itself much stricter environmental targets than the industry. They even go far beyond what European suppliers want to achieve. United is promising to fly completely emission-free by 2050, without using offsets trading in emission certificates, the effectiveness of which often cannot be verified. While the industry is still debating how it can use electric or hybrid electric planes, United is making the facts. Together with a regional partner, the group has ordered 200 Heart Aerospace ES-19 19-seater 19-seater electrics, which will fly from 2026. Competition is hiding behind the scenes that the electric aircraft will not work, but United is now making investments to ensure Heart Aerospace can fund further development work.
United want to send supersonic jets across the Atlantic for the first time
Sustainability is one aspect, another concerns new areas of business: United has ordered 200 air taxis from California start-up Archer to bring passengers from surrounding areas to airports. And from 2029, United plans to send supersonic Boom Supersonic jets across the Atlantic for the first time.
Kirby, who has been at the helm of United since spring 2020, is the man behind the plan. He has worked in the industry for decades. In 1995, he joined America West Airlines as head of network planning, then held senior positions at US Airways and American Airlines. He was long considered the man to come, but was always only number two. In 2016, he moved to big rival United in Chicago with a lot of noise and once again had a boss under his nose in Oscar Munoz. But this time, it was clear Kirby would take over after a few years.
“Scott is starting to take on his leadership role,” said Mo Garfinkle, Managing Director of Tailwind Consultants and who has known Kirby for a long time. “His first job was to make sure the airline survives the pandemic. But now it’s about his leadership in the industry.” With his radical ideas, he is currently overtaking industry giants Doug Parker (American), Gary Kelly (Southwest) and Ed Bastian (Delta), who look quite old-fashioned next to him.
But why take the step to become a chief innovator now? “Kirby has always had the ability to grasp a complex situation,” Garfinkle explains. “And he doesn’t want United and the industry to turn into dinosaurs.” The environmental course also brings United points to new, younger customers who value sustainability, which clearly positions the airline politically.
If one of the initiatives doesn’t work, it’s not too bad either. Investments are limited. But when a project really takes off, United have built themselves a huge head start.