United Airlines CEO Glenn Tilton is determined to wring added lucre from his now-profitable airline. Tilton is considering 250 unpopular ideas, such as charging economy-class passengers a fee to avoid receiving their luggage last, and spinning off United’s already wounded frequent flier program, Mileage Plus.
United appears to be following a strategy set by Air Canada, which gained billions of dollars after it emerged from bankruptcy in 2004 by spinning off its maintenance division and frequent-flier program into separate businesses, analysts say.
“Every management team needs to address it,” said Kevin Crissey, senior analyst for U.S. airlines with UBS Investment Research.
The Chicago-based carrier is also the first in the U.S. to navigate the disquiet, even anger, that these strategies engender in employees. Many United workers are dismayed that the company didn’t explore the spinoffs during its bankruptcy, when the proceeds could have been used to fund pension plans that were terminated.
Passengers who refuse to pay the baggage extortion fee can at least mill around confident that their bags will appear within twenty-five minutes.
United chief chases change [Chicago Tribune]
(Photo: AFP/Getty Images)