How can an airline that charges for on-board food, offers beverages in measured quantities, and has a funny name be a success story?
Apparently, when your only choices are either to sink like Independence Air or book a permanent berth in bankruptcy court like US Airways, you start questioning the fundamental way you do business and improve your game. Of course, if you have a team of battle-hardened industry veterans supported by top notch Wharton-grade consultants, your odds are perhaps better than most. The fact that you are part of an industry colossus like United had its advantages too: established route structures, excellent aircraft maintenance facilities, and above all, easier brand association.
This is precisely how the story of Ted, the low cost carrier (LCC) within United Airlines, was described by Sean Donohue, the head of Ted and United Express; Allen Will, Director of Finance at Ted; and Andrew Watterson, Director of Mercer Management Consulting's Aviation Aerospace and Defense Practice.
Ted started as an experiment within United two years ago. Its quirky name is derived from the last three letters of UniTED, and Sean was the first to admit that he originally believed that the name was the product of someone's wicked sense of humor. However, the name grew on the airline's management team, and United's employees have embraced their 'little sibling,' and view Ted as an opportunity for them to have fun at a time when very few legacy airline employees have much to celebrate.
The basic premise was simple: utilize just one aircraft type (Airbus A320), concentrate on leisure traveler dominated routes eliminate costly frills like food, increase capacity by replacing the first class cabin (usually filled by customers redeeming frequent flyer miles or upgrading from cheap fares anyway) with Premium Economy, and what do you get? PROFITS!
The Wharton Journal
Apparently, when your only choices are either to sink like Independence Air or book a permanent berth in bankruptcy court like US Airways, you start questioning the fundamental way you do business and improve your game. Of course, if you have a team of battle-hardened industry veterans supported by top notch Wharton-grade consultants, your odds are perhaps better than most. The fact that you are part of an industry colossus like United had its advantages too: established route structures, excellent aircraft maintenance facilities, and above all, easier brand association.
This is precisely how the story of Ted, the low cost carrier (LCC) within United Airlines, was described by Sean Donohue, the head of Ted and United Express; Allen Will, Director of Finance at Ted; and Andrew Watterson, Director of Mercer Management Consulting's Aviation Aerospace and Defense Practice.
Ted started as an experiment within United two years ago. Its quirky name is derived from the last three letters of UniTED, and Sean was the first to admit that he originally believed that the name was the product of someone's wicked sense of humor. However, the name grew on the airline's management team, and United's employees have embraced their 'little sibling,' and view Ted as an opportunity for them to have fun at a time when very few legacy airline employees have much to celebrate.
The basic premise was simple: utilize just one aircraft type (Airbus A320), concentrate on leisure traveler dominated routes eliminate costly frills like food, increase capacity by replacing the first class cabin (usually filled by customers redeeming frequent flyer miles or upgrading from cheap fares anyway) with Premium Economy, and what do you get? PROFITS!
The Wharton Journal
