United-US Airways Merger: Who does it benefit?
The on-again, off-again merger talks between United Airlines and US AIrways are, for now, off again. But if the two airlines do decide to merge their businesses together, who will reap the benefits?
On April 15, 2008, Delta and Northwest Airlines announced they reached an agreement to merge the two companies. The deal, if approved, will create the world’s biggest airlines.
Industry experts have speculated that this move would trigger a slew of consolidations and would dramatically shake up the airline industry in the U.S. United and Continental were said to be near finalizing a consolidation plan, when Continental abruptly announced that it has abandoned merger talks. It has been speculated that Continental’s move came after United’s parent company announced a $537 million loss during the first quarter of 2008 .
Undeterred, United was said to be in merger talks with US Airways [Read more]
United’s Incentive Pay Plan Brings Up Old Memories For Employees
On May 3, 2008, the Chicago Tribune reported a pay controversy, as United Airlines prepares to set aside $130 million worth of stock in an incentive plan to “attract, retain, and reward exceptional senior leaders”, said United spokeswoman Jean Medina.
This plan needs the approval of the airline’s shareholders, who will vote at United’s annual meeting in June, and has further angered employees still upset about the $150 million executive incentive plan just two years before. [Read more]
Paying More for Less? Rising Ticket Prices at United
While ranking at or near the bottom in customer service in various reports, United has attempted to raise fares 14 times between January 1st and April 28th . Airfare hikes have been initiated by both United and Delta, and after successful system-wide increases, passengers are paying up to $130 more per domestic airline ticket than they did in January. Rick Seaney, chief executive of FareCompare.com, has put together the list of the fare hikes: [Read more]
United Airlines Cancels Flights for Safety Inspections
On April 2, 2008, United – following Southwest, American, and Delta – became the fourth carrier within one month to cancel flights for inspections after it admitted to the FAA that it had failed to completely inspect the fire suppression system on its Boeing 777 aircraft. United canceled 38 flights and delayed dozens of others to carry out inspections on 52 of its 777s, stranding thousands of passengers, especially those on its international routes .
This string of cancellations and inspections came after two FAA inspectors blew the whistle on FAA’s lack of oversight [Read more]
How’s Customer Service at United?
The DOT’s Air Traveler Consumer Report released in January 2008 found United to have the highest rate of consumer complaints out of 20 domestic airlines, with an average of 2.74 complaints per 100,000 passengers, surpassing other airlines such as US Airways, Delta, or American. United fared a little better in February 2008 – ranking 19th out of 20 airlines – but slipped to the bottom again in March.
Two United Planes Skipped off Runways in 4 Months
On October 9, 2007, and February 25, 2008, two United planes – both Airbus A320 – skidded off the runways during landing at O’Hare and Jackson Hole Airport.
Investigations later revealed that the problems were caused by crossed wiring [Read more]
United Airlines’ On-Time Performance
According to the Department of Transportation’s Air Travel Consumer Report Released in January 2008, United dropped from 11th place to 20th place out of 20 airlines when ranked for on-time performance.
