At the end of yesterday’s post, I was just beginning my talk with Brian Znotins, VP of Network for United during my day with United’s management. Now, it’s time to get dorky. (See Part 1, Part 2, Part 4)
Brian came from the Continental side of the house, so my first question was – what was it like to wake up one day with a lot more airplanes and some incredible new hubs? Brian got a little grin on his face. Clearly he loved the opportunity.
[Disclosure: United paid for my flights and hotel]
Brian explained that once the two airlines came together, there really weren’t any big holes in the network to fill. So it became all about trying to optimize the network to perform the best. That involved choosing routes, but it also meant putting the right airplanes on the right route. And I had a specific question about that.
Deciding Which Airplanes Go Where
I was surprised that there were so few Airbuses in the LA-Chicago market, as an example, because those airplanes were getting wifi first. That would seem to be an important market for wifi with both American and Virgin America offering it. But Brian noted that they really pay little attention to the onboard product when they schedule airplanes. It’s primarily about matching the number of seats up with the demand in the market. The 737s are generally larger than the Airbuses, and Chicago-LA needs bigger airplanes.
Sometimes, the plan to match capacity doesn’t work for a variety of reasons. The 747s, for example, were breaking way too often so they were forced to put them all in San Francisco until the maintenance team could get the problems under control. By their count, they had six more 747s in San Francisco than they could support, and that meant they had too much capacity, hurting the airline’s results. Now that the 747s are reliable again, they’ve moved some back to Chicago and that better matches capacity to demand.
New vs Old Airplanes
Staying on the fleet, I asked him about the airline’s strategy to buy new airplanes versus Delta’s more varied strategy of using older airplanes. Brian said they weren’t all about newer airplanes. They were, after all, going to keep the 747s for longer, but they do prefer more efficient airplanes.
He said that for every domestic 757 they pull out and replace with a large 737, the airline saves $2 million every year. That adds up quickly considering there are nearly 100 domestic 757s in the fleet. (And they’re going to start leaving quickly.)
And that’s why they do like their new airplanes. In the future, we’ll see the A350 as a replacement for the 747. The larger 787s will be able to replace the current 777 fleet. United is still evaluating the larger 777X, but that would probably be the largest airplane that would interest the airline.
767-400 and Joint Venture Love
Those 787s are coming quickly now, and we’ll see more new route opportunities open up because of the airplane’s capabilities. It can support those long, thin routes; the opposite of the 767-400. Brian said they love the 767-400 because it can fly a lot of people no more than 5,000 miles. With hubs in Newark and Dulles, that opens up plenty of opportunities to use the airplane within its range over to Europe. He said you really only want to buy the range you need, and in their network, that airplane fits very well.
Back to the 787s, that had me thinking more about joint venture partners and how they work together. He said that they work very closely with those partners. In particular, we talked about ANA in Japan. Apparently ANA hasn’t historically paid as much attention to connections as United would. But that is now changing and it’s opening up new opportunities. It lets United reduce flying within Asia (as we’ve seen) and it opens up new flights. I believe he used Narita-Jakarta as an example of an ANA route that will only work (if it does) because of connections between the partners.
I turned the conversation toward smaller airplanes. He said the math for the Bombardier C-Series just doesn’t work. It’s particularly tough to operate an airplane that size at mainline labor rates.
We talked about the upcoming change to the airline’s regional jet fleet. The new 76-seaters will be focused on business markets that need high frequency. That’s because those airplanes can technically hold more passengers but the pilot contract caps them at 76 seats. That means they have a rather high 12 First Class seats onboard, so it’ll fit well in business markets. The first hub to see those will be Chicago.
The small 50 seaters will continue to fly some longer routes but they try to keep those on routes with no other nonstop competition. In other words, you have two choices. You can fly nonstop in a tiny tube or you can connect. The nonstop usually wins.
I asked what kind of attention they pay to non-hub markets, and he pointed to Austin as one that they watch. United flies to
more nearly as many cities nonstop from Austin than from Tokyo/Narita. And they have tried to boost Austin by playing to its love of new tech. For example, they’ve optimized connections to the 787 in Denver heading to Narita because they knew the younger, tech crowd would possibly consider the airplane in their flight purchase decision.
What About Cleveland?
As I was being ushered out the door to my next meeting, I asked about Cleveland. With more 50 seaters leaving the fleet, what did that mean for the most at-risk hub? Brian said that Cleveland “has long been challenged to turn a profit.” But he noted that the city is fantastic to work with. It is a 50-seat-heavy hub, but he said that there will still be plenty of aircraft to service the hub if it works. Without offering any definitive insight, he simply said that Cleveland, like every other hub, has to work. I didn’t get a real sense one way or another on what that meant for Cleveland’s future.
I was originally scheduled for a break after this, but there was too much to do. I didn’t want to waste time. A couple of quick phone calls by Rahsaan got me a last minute tour of the NOC, the airline’s network operations center. The NOC, United’s network operations center, was designed to be state of the art. This is where the airline is truly run from an operations perspective so it better be functional.
Network Operations Center
The importance of a comfortable work environment was clearly thought through. There are windows all around the building, of course, but shades and lights are programmed to automatically compensate for changes in sunlight. In other words, it should look pretty much the same on the inside no matter what’s going on outside.
Management is centered on what they call the Bridge. There is an enormous set of screens that can be adjusted to show anything they want from around the network. That day we were watching DFW get pummeled with ice. That wasn’t a huge issue for United, but Denver was suffering through some pretty ugly delays that day as well. The dashboard showed whether they were meeting their performance goals in the hubs and whether the trend going forward was for improvement or not. It was all somewhat overwhelming, but in an awesome “these guys run the world” kind of way.
Seeing the NOC was a nice break, but soon it was time to go back in for more meetings. Next up was Tom O’Toole, SVP Marketing and Loyalty and President of MileagePlus. Tom’s background is in the hotel industry with more than a decade at Hyatt and more before that. I’ll have that discussion in the final post of this series tomorrow.
Great series, Bret. I particularly enjoyed part III, with VP Brian Znotins. An obviously sharp fellow oh, what an exciting, yet demanding job he has. With no joke intended, a few keystrokes from his office can make/break UAL.
I’d give the proverbial left one for an extended visit in their NOC. That’s where the magic happens and those who work those desks must love the high energy environment. Subtract 25 years and I’s probably pay for the right to work in that center.
All said, I must confess that I avoid UAL when I can. Their soft product, domestic and especially international is – to be polite – seriously lacking and I usually find the on-board staff to be minimalist time-clock punchers at best. (Sorry UAL, but it is true.) If asked about one single item to improve that impression it would be access to bottled water. Lots of water is essential when flying and the ‘potable’ water is just not. Please don’t surcharge me for ordinary water; I feel like a captive. (The crew sucks this stuff constantly; but I don’t think they are paying much for it!)
I’m enjoying this series and I look forward to the final few posts. UAL has shared some great information with you, as well as blowing some smoke… Thank heavens that you know the difference. Great posts, Bret.
The NOC isn’t horribly designed but they could have done a better job with it – they were so concerned about workstation “interchnagability” they forgot that different groups need different types of desks. For example, there’s an extreme lack of space for laying out aeronautical charts for route planning.
If CLE is a heavy 50-seater hub then it sounds like it shouldn’t be a hub. They can feed traffic via ORD/EWR/IAD in that area and not need CLE.
David – As Terry mentions, the key is local traffic. You can get 50-seaters to work if there’s enough high dollar local traffic and that should work in some if not many markets from Cleveland.
While local traffic is important, it is still hard to see how they can continue to justify such heavy use of RJ’s with the midsized numbers they are putting up on the pax side. At some point the maintenance issues and overall fleet rationalization will reduce significantly the need to maintain a fleet of RJ’s and the costs associated with them.
CLE and UA sounds like CVG and DL all over again.
Me being the conspiracy theorist that I am, I’d interpret the lack of a ringing endorsement of CLE as a sure sign that UA plans to de-hub it as soon as it’s practically feasible. In other words, “we’re waiting until it p*sses off the pols less”, most likely after whatever sweeteners the airport is offering expire (I assume there are some). Sarcasm aside, echoing what David says, I don’t think I’ve ever seen a primarily RJ-fed hub succeed, so from a pure dollars-and-cents perspective, I just don’t see how it’s viable long-term, especially with today’s operating costs. But we’ll see.
The key to Cleveland is to keep high level of O/D.
Regarding the “hub” that is CLE and the 50 seat RJ’s that fly there.
I used to fly United from ORD to CLE weekly back in the late 90’s. At that time United flew DC10’s/MD11’s that short distance and they were always packed.
Especially the ORD return on a Friday afternoon.
Except for a nice United club at CLE, you would never know that it is a United “hub”.
Like MeanMeosh I have to believe that they are just waiting for the subsidies to end.
“They really pay little attention to the onboard product when they schedule airplanes. ”
Yikes. Good to know.
Sad about the C-Series. I hope that can change. However, I would take the E-175’s over just about most other aircraft domestically for 2 – 3 hour runs.
Thank you, United Airlines, for your continued interest and investment in our growing Austin market. Cranky, we appreciate your including this mention in the feature.
Hi Bret, It’s your old retired friend from the Trans Texas days, and Continental, and Virgin Atlantic, and most recently up through retirement, Emirates. I find it so interesting to see how quickly things have changed in the three short years since my retirement. It seems that airlines have gone completely nuts and it still goes back to deregulation and the disintegration of the entire industry. I still miss the days of integrity, respectability and the way life used to be before airlines had to completely dismantle themselves, and sell themselves out to survive their jobs. I sure miss the old days, and I’m not even old! Bret, you are wonderful and are doing such a great service to the industry. I respect you so much!