United committed to continuing Ted, its discount airline
By Mark Skertic
Tribune staff reporter
October 29, 2005
United Airlines on Friday said it remained committed to expanding its discount airline, Ted, even as competitor Delta Air Lines announced it was abandoning its own low-cost carrier, Song.
Delta said it would take features available now only on Song, such as personal in-flight entertainment systems and leather interiors, and expand them to the rest of its fleet. Delta will stop flying Song as a separate brand after May, the Atlanta-based airline said Friday.
"As Delta continues its transformation to become a more customer-focused airline, we are incorporating the best of Song into the best of Delta," Chief Executive Gerald Grinstein said in a statement.
Meanwhile, United is expanding Ted by nine aircraft this year, bringing the total to 56 United planes bearing the orange Ted logo. The quirky name comes from the last letters of United's name. Next week, United's flights to Miami from Chicago's O'Hare International Airport, Denver and Washington Dulles all will fly under the Ted banner.
New service to Mexico and the Caribbean, if approved, also will be Ted flights, a spokesman for the airline said.
"Ted is doing exactly what we wanted it to do. It turned around the financial performance in the leisure markets for us, and we're grabbing market share," said Sean Donohue, vice president of Ted. "We're trying to find what I like to call the sweet spot--where people realize Ted has a level of distinction, but it's also part of United."
United offers flights under the Ted banner at O'Hare and Midway airports and has grown to account for 15 percent of all United departures. Delta, which has limited service to Chicago, never offered Song in the market.
Song launched in 2003, and Ted followed in early 2004. Both were efforts by mainline carriers to recapture some of the business taken by Southwest Airlines and other low-cost carriers.
They have unusual names, promise low fares and have no first-class seating. Both also use advertising that attempts to convey a hip appeal. Ted offers special movie/TV viewing and music channels, while Song has personal systems that offer movies, live television and video games.
Ted has been one of the highest-profile moves for United while the Elk Grove Township-based airline has been in bankruptcy. Delta, which filed for bankruptcy protection last month, said the decision to pull the plug on the Song brand is part of the carrier's restructuring.
Neither airline breaks out financial information about its discount carrier, so determining how much they make or lose is difficult. Instead, the performance of each is wrapped into its parent's overall results.
While Ted promises low fares, it does not have the same cost structure as most low-cost carriers. The crews are paid what others in the United system make, although compensation throughout the airline has come down through contract changes during the bankruptcy restructuring.
Donohue credited a focused approach and the work of employees with making Ted a success.
Delta's decision to ground the Song name does not mean the airline will pull flights out of those markets. The airline still will fly to the same places, and the planes will add back first-class cabins.
Airline analyst Mike Boyd has been among the critics of United's Ted, which he derides as little more than a special paint job on some airplanes.
"It confuses the customer with two identities," he said. "It is United. It's part of United except it's a different identity. Except for United's first-class customers, because when he gets to Denver and wants to connect to Phoenix, he gets ticked off because there's no first-class [service] on Ted."
Copyright © 2005, Chicago Tribune
By Mark Skertic
Tribune staff reporter
October 29, 2005
United Airlines on Friday said it remained committed to expanding its discount airline, Ted, even as competitor Delta Air Lines announced it was abandoning its own low-cost carrier, Song.
Delta said it would take features available now only on Song, such as personal in-flight entertainment systems and leather interiors, and expand them to the rest of its fleet. Delta will stop flying Song as a separate brand after May, the Atlanta-based airline said Friday.
"As Delta continues its transformation to become a more customer-focused airline, we are incorporating the best of Song into the best of Delta," Chief Executive Gerald Grinstein said in a statement.
Meanwhile, United is expanding Ted by nine aircraft this year, bringing the total to 56 United planes bearing the orange Ted logo. The quirky name comes from the last letters of United's name. Next week, United's flights to Miami from Chicago's O'Hare International Airport, Denver and Washington Dulles all will fly under the Ted banner.
New service to Mexico and the Caribbean, if approved, also will be Ted flights, a spokesman for the airline said.
"Ted is doing exactly what we wanted it to do. It turned around the financial performance in the leisure markets for us, and we're grabbing market share," said Sean Donohue, vice president of Ted. "We're trying to find what I like to call the sweet spot--where people realize Ted has a level of distinction, but it's also part of United."
United offers flights under the Ted banner at O'Hare and Midway airports and has grown to account for 15 percent of all United departures. Delta, which has limited service to Chicago, never offered Song in the market.
Song launched in 2003, and Ted followed in early 2004. Both were efforts by mainline carriers to recapture some of the business taken by Southwest Airlines and other low-cost carriers.
They have unusual names, promise low fares and have no first-class seating. Both also use advertising that attempts to convey a hip appeal. Ted offers special movie/TV viewing and music channels, while Song has personal systems that offer movies, live television and video games.
Ted has been one of the highest-profile moves for United while the Elk Grove Township-based airline has been in bankruptcy. Delta, which filed for bankruptcy protection last month, said the decision to pull the plug on the Song brand is part of the carrier's restructuring.
Neither airline breaks out financial information about its discount carrier, so determining how much they make or lose is difficult. Instead, the performance of each is wrapped into its parent's overall results.
While Ted promises low fares, it does not have the same cost structure as most low-cost carriers. The crews are paid what others in the United system make, although compensation throughout the airline has come down through contract changes during the bankruptcy restructuring.
Donohue credited a focused approach and the work of employees with making Ted a success.
Delta's decision to ground the Song name does not mean the airline will pull flights out of those markets. The airline still will fly to the same places, and the planes will add back first-class cabins.
Airline analyst Mike Boyd has been among the critics of United's Ted, which he derides as little more than a special paint job on some airplanes.
"It confuses the customer with two identities," he said. "It is United. It's part of United except it's a different identity. Except for United's first-class customers, because when he gets to Denver and wants to connect to Phoenix, he gets ticked off because there's no first-class [service] on Ted."
Copyright © 2005, Chicago Tribune
