What does United Airlines provide on long flights?
United Airlines has survived the test of time for nearly 100 years and continues to be one of the largest airlines on the planet. What has helped United to weather the storms is its competitive edge. United, however, can use a variety of advantages to successfully navigate the airline business.
Large Route Network and Airport Hubs A significant advantage for United is its route network and airport hubs. United operates to more than 300 destinations across 5 continents. The airline operates through hub airports in major US cities including Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco, and Washington DC. At these centers, United schedules flights to pick up and disperse passengers with maximum efficiency. That gives United unparalleled connectivity to a huge number of destinations. It's scale and hubs that allow United to court high-yield business travelers who prize flexibility.
Plus, United is the biggest airline at most of the major US airports it flies to. Power at airports such as Chicago O'Hare gives United an advantage in exclusive gates, check-in counters, baggage systems, and other facilities. Generally speaking, United's airport network and route structure are structurally superior to its smaller rivals.
Loyal Customer Base United's second big advantage is its massive loyalty program membership base. More than 100 million people worldwide are members of United's MileagePlus loyalty program - the second largest US airline. These members are motivated to keep flying United to receive elite status perks, priority upgrades, and to cash in miles. And a lot of MileagePlus members stick with United, anyway.
United also has co-brand credit cards with big banks such as Chase and Visa. Millions of travelers rely on United credit cards and buy things that earn the airline money. The co-brand cards work in a mutualistic relationship to enhance customer loyalty. Additionally, United's corporate travel programs with major corporations mean that many business passengers prefer to fly United for work-related travel.
Strategic Partnerships and Joint Ventures United's competitive footprint is broadened by its involvement in the Star Alliance and strategic partnerships. The Star Alliance is the world's largest airline alliance with 26 member airlines and was founded in 1997. Passengers can accrue and spend frequent flyer miles with any of Star Alliance's partner airlines. United can entice passengers to its flight that serves as a connection to another alliance carrier. That takes United's de facto worldwide network to more than 1,300 destinations.
Apart from the Star Alliance, United has antitrust-immune joint ventures with several major airlines - Lufthansa, Air Canada, ANA, and others. These joint ventures let United and its partners work together on rates, schedules, and capacity. This enables extremely well-coordinated and optimized route networks that cannot be achieved otherwise. Joint ventures allow United to move into regions of the world much more easily. The net result is a much bigger, de facto global network that delivers more value to customers.
Technical and Maintenance Capabilities Unlike low-cost carriers such as Spirit and Frontier, United has invested in the years to develop top-notch technical expertise in aircraft maintenance and IT. With more than 30,000 technical operations staff, United has significant in-house MRO capabilities at its hubs.
United also has software that measures on-time performance with accuracy and can forecast airport congestion days in advance. That knowledge is valuable for United as it works to reduce aircraft turnaround times and maintain flight delays to a low level in bad weather or at congested airports. United's technical prowess delivers cost and operational efficiency that lean LCCs cannot
Financial Resources and Buying Power Financial strength and purchasing power also give United a cost advantage. Large carriers need massive sums of money to purchase aircraft, fuel, crew, airport charges, and other costs. United has secured more than $27 billion in funding since the beginning of the COVID-19 pandemic. The carrier has access to capital markets, bank financing, and debt instruments not available to smaller carriers. This gives United additional financial cushioning to survive industry slumps.
And, even fewer businesses buy stuff and services the insane amount that United does. With significant volumes across wide categories - particularly fuel, aircraft, engines, airport fees, distribution channels, etc. - United can negotiate bulk discounts and favorable payment terms. Such buying power provides a considerable cost advantage over smaller carriers with less volume.
Strong Cargo Transport Business Besides a passenger-centric network, United also gets a competitive advantage from its proficient cargo transport operation. United's cargo space totals more than 2. 8 million square feet on its large-body passenger planes. The carrier also has Boeing 777 and 787 Dreamliner planes that are used exclusively to carry cargo in their holds.
In 2020, United phased out some of its Boeing 747 fleet, while retaining a smaller fleet of 747s that fly exclusively on cargo routes. The carrier is thus agile enough to position wide-body aircraft between passengers and cargo as market conditions and demand dictate. United's air cargo transport operation is one of the most highly developed of any US airline. And so cargo gives United an additional source of income and brings much-needed consumer goods and medical supplies to the world.
Overall, United has strengths in network reach, loyalty programs, alliances, technology, financial resources, and cargo transport that create significant competitive benefits. These assets allow United to contend in the long term. United's competitive strengths place the carrier in a good position to weather industry cycles and benefit from better external conditions in the future.
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