It's Already Backfiring. But Mistakes Can Be Corrected.
Ted: It's The Same Costs,
It's The Same Dodgy Economics.
But It's Still United Airlines.
Never in the history of aviation has a simple coat of airplane paint been hyped so expensively.
We refer, of course, to United's "Ted", which is fast becoming a raging joke in the airline industry. Nobody outside of United itself seems to be buying the hype, nor the hogwash about how a new name, a sub-fleet, and not much else, will magically lower fares.
But in the final analysis, that's all it is - a foray into ivory-tower B-school airline theories. Essentially, Ted's just some A-320s in drag - United A-320s, staffed and operated by United employees, not newly-hired, shiny-faced kids who can't tell a flight coupon from a speeding ticket.. All Ted fundamentally represents is 45 all-coach airplanes drowning in a torrent of embarrassingly tacky PR and hokey marketing. Sure, it will mix products at the same hub. It will confuse the public (it already is doing so) and it won't materially reduce fares (if at all) below where they've already been. All that aside, Ted's nothing that can't be easily reversed. Mistakes can be fixed.
Nevertheless, that won't happen anytime soon. There's the issue of "face." For over a year, United's senior management has hung its hat on starting a "low cost" internal airline. That's just what Ted isn't, except in the fertile minds of the PR companies eagerly trying to develop Cleo-winning ads for the entity. With all the bucks and energies spent on this sideshow, to turn back now would cause United's senior management to look perhaps even sillier than they do already. So, it's full speed ahead.
The official roll-out of the concept on November 18 featured more delusional babble than a Democratic presidential debate. One UA VP, apparently thinking that the flying public and the rest of the aviation industry just fell off a turnip truck, touted the "savings" of Ted operating just one type of aircraft - gee, just like Southwest. He conveniently left out the fact that Ted isn't a stand-alone airline. The crews, maintenance, and other support for this coat-of-paint operation are part and parcel of the entire United system, have the same contracts, and represent the same fundamental costs as mainline United.
Another United VP, trying to dispel the (correct) notion that this is not much more than Son-of-Shuttle, claimed that the now-defunct United Shuttle was profitable its first few years, something that United's own president denied soon after it was started. The VP went on to say that the Shuttle went glub-glub when its costs went up - i.e., after it was blended back into the United hub system, when the Shuttle-related B-scale contracts ended, and its costs matched the rest of United's hub system. Oops, that pretty much describes Ted. Other than stuffing more chairs in the cabin, thereby creating a sub-fleet which can reduce operational flexibility, there's virtually nothing at Ted that will substantively reduce the sector costs of tossing an A-320 between two points. In fact, by increasing seat capacity from 138 to 156 seats, Ted flights will actually require one additional flight attendant.
Frontier: Gee, Ted, Thanks For The Free Advertising. The elaborate marketing program for "Ted" initially succeeded in giving the public the perception and expectation of new lower fares. Unfortunately, that perception - which simply isn't accurate - is starting to come around and bite United in the proverbial tail.
In its guerilla marketing campaign prior to the official unveiling, United had representatives of "Ted" running around Denver giving stuff away. Like, suddenly buying desserts for everybody in a given restaurant. Or a free latte to people in line at Starbucks. A free pizza. Or a free newspaper. Or, 100 free miles to Denver-area MileagePlus members. It built a "buzz." But by building inaccurate consumer expectations regarding fares, Ted has also given away something unintended: a free advertising bonanza to its main competitor.
Clearly, the target for Ted is Frontier Airlines. But United wasn't and isn't being clear about the simple fact that United has been already matching most of Frontier's fares. Worse, it's become the staple of investigative and consumer reporters in Denver to do fare comparisons between Ted and Frontier. In almost all cases, the findings are that consumers will pay the same, and sometimes more, to fly Ted, giving Frontier some very positive - and very free - publicity. The message: Hey, if you want a low fare, forget Ted. Call Frontier first.
The entire expensive advertising campaign intended to build awareness for Ted has been hijacked on the 11PM news to the benefit of Frontier, simply because it implied a perception that gave the public the wrong expectations.
It May Be A Misfire, But It's Still United Airlines. The Ted concept is clearly the product of some MBA class project run amok. It's likely going to end up much as the United Shuttle did - phased out.. But until then, it's still United Airlines in a slightly different livery. That means its competitors - at Denver and wherever this silly thing expands to - should not take it lightly. It will still be part of a professional global airline. At Denver, it will still be part of United's hub system. It will still have United service delivery, which is among the best and most customer-focused in the industry. (For example, United's customers don't get checked-in by agents who may be multi-tasking, i.e., sucking on a Quizno's soda and maybe even munching on a bag of Fritos - something not uncommon at some of United's competitors.)
So regardless of the color of the airplane, Ted is a management distraction and an expensive marketing detour for United, nothing more.
At least for now.
http://www.aviationplanning.com/
Ted: It's The Same Costs,
It's The Same Dodgy Economics.
But It's Still United Airlines.
Never in the history of aviation has a simple coat of airplane paint been hyped so expensively.
We refer, of course, to United's "Ted", which is fast becoming a raging joke in the airline industry. Nobody outside of United itself seems to be buying the hype, nor the hogwash about how a new name, a sub-fleet, and not much else, will magically lower fares.
But in the final analysis, that's all it is - a foray into ivory-tower B-school airline theories. Essentially, Ted's just some A-320s in drag - United A-320s, staffed and operated by United employees, not newly-hired, shiny-faced kids who can't tell a flight coupon from a speeding ticket.. All Ted fundamentally represents is 45 all-coach airplanes drowning in a torrent of embarrassingly tacky PR and hokey marketing. Sure, it will mix products at the same hub. It will confuse the public (it already is doing so) and it won't materially reduce fares (if at all) below where they've already been. All that aside, Ted's nothing that can't be easily reversed. Mistakes can be fixed.
Nevertheless, that won't happen anytime soon. There's the issue of "face." For over a year, United's senior management has hung its hat on starting a "low cost" internal airline. That's just what Ted isn't, except in the fertile minds of the PR companies eagerly trying to develop Cleo-winning ads for the entity. With all the bucks and energies spent on this sideshow, to turn back now would cause United's senior management to look perhaps even sillier than they do already. So, it's full speed ahead.
The official roll-out of the concept on November 18 featured more delusional babble than a Democratic presidential debate. One UA VP, apparently thinking that the flying public and the rest of the aviation industry just fell off a turnip truck, touted the "savings" of Ted operating just one type of aircraft - gee, just like Southwest. He conveniently left out the fact that Ted isn't a stand-alone airline. The crews, maintenance, and other support for this coat-of-paint operation are part and parcel of the entire United system, have the same contracts, and represent the same fundamental costs as mainline United.
Another United VP, trying to dispel the (correct) notion that this is not much more than Son-of-Shuttle, claimed that the now-defunct United Shuttle was profitable its first few years, something that United's own president denied soon after it was started. The VP went on to say that the Shuttle went glub-glub when its costs went up - i.e., after it was blended back into the United hub system, when the Shuttle-related B-scale contracts ended, and its costs matched the rest of United's hub system. Oops, that pretty much describes Ted. Other than stuffing more chairs in the cabin, thereby creating a sub-fleet which can reduce operational flexibility, there's virtually nothing at Ted that will substantively reduce the sector costs of tossing an A-320 between two points. In fact, by increasing seat capacity from 138 to 156 seats, Ted flights will actually require one additional flight attendant.
Frontier: Gee, Ted, Thanks For The Free Advertising. The elaborate marketing program for "Ted" initially succeeded in giving the public the perception and expectation of new lower fares. Unfortunately, that perception - which simply isn't accurate - is starting to come around and bite United in the proverbial tail.
In its guerilla marketing campaign prior to the official unveiling, United had representatives of "Ted" running around Denver giving stuff away. Like, suddenly buying desserts for everybody in a given restaurant. Or a free latte to people in line at Starbucks. A free pizza. Or a free newspaper. Or, 100 free miles to Denver-area MileagePlus members. It built a "buzz." But by building inaccurate consumer expectations regarding fares, Ted has also given away something unintended: a free advertising bonanza to its main competitor.
Clearly, the target for Ted is Frontier Airlines. But United wasn't and isn't being clear about the simple fact that United has been already matching most of Frontier's fares. Worse, it's become the staple of investigative and consumer reporters in Denver to do fare comparisons between Ted and Frontier. In almost all cases, the findings are that consumers will pay the same, and sometimes more, to fly Ted, giving Frontier some very positive - and very free - publicity. The message: Hey, if you want a low fare, forget Ted. Call Frontier first.
The entire expensive advertising campaign intended to build awareness for Ted has been hijacked on the 11PM news to the benefit of Frontier, simply because it implied a perception that gave the public the wrong expectations.
It May Be A Misfire, But It's Still United Airlines. The Ted concept is clearly the product of some MBA class project run amok. It's likely going to end up much as the United Shuttle did - phased out.. But until then, it's still United Airlines in a slightly different livery. That means its competitors - at Denver and wherever this silly thing expands to - should not take it lightly. It will still be part of a professional global airline. At Denver, it will still be part of United's hub system. It will still have United service delivery, which is among the best and most customer-focused in the industry. (For example, United's customers don't get checked-in by agents who may be multi-tasking, i.e., sucking on a Quizno's soda and maybe even munching on a bag of Fritos - something not uncommon at some of United's competitors.)
So regardless of the color of the airplane, Ted is a management distraction and an expensive marketing detour for United, nothing more.
At least for now.
http://www.aviationplanning.com/
