Sunday, May 09, 2010

Continental-United merger poses questions

By Dan Reed, USA TODAY
Whose service will greet passengers at the merged Continental and United airline: Continental's highly rated or United's low-rated?

Will the new airline — to fly under the United name — have two, three or four classes of seats? Will it fly big or little planes?

The new airline needs to get approved by federal regulators before it can fly. And the airlines have yet to put together teams that will work out answers to important passenger questions.

"It's very early in the process," Continental spokeswoman Christen David says. "We've had lots of questions asked already, including, 'What operating system will we use, Vista or Windows 7?' But we don't have any answers yet."

Among key issues for passengers:

•Customer service. Continental is regarded as having the better image. It ranked second among U.S. airlines in the University of Michigan's latest American Customer Satisfaction index, second only to Southwest. United came in last.

•Classes of seating. United has conventional first, business and coach sections, plus an "Economy Plus" section with economy seats that have a few extra inches of legroom. Continental has a standard coach section, plus "Business First." It's a hybrid designed to be near first-class quality but priced near business class.

•Size of planes. More than half of United's departures are flown under contract by United Express carriers, which fly smaller planes. Continental farms out a smaller share to regional affiliates.

Millions of dollars in revenue hang on how the issues are decided. For example, Continental can pack a maximum of 285 passengers on its Boeing 777s used on international routes. United can get only 253 passengers on its 777s. But 138 of those passengers on United's 777s pay premium prices to sit in first, business or Economy Plus sections.

"There are two key areas of concern: product delivery and service delivery," says marketing consultant Shashank Nigam, CEO of "They are two different things: One has to do with the seats and cabins and how all the amenities are packaged. The other has to do with how the airline's people greet and handle and serve passengers. Continental and United do those things very differently from one another today."

Industry consultant and analyst Michael Boyd at the Boyd Group International says success may hinge as much on whether the new airline flies its big, mainline jets or the smaller, less-comfortable planes of its regional affiliates.

"More customers will fly on small jets than will ever sit in first class," Boyd says. "So that decision will affect far more people than anything else United and Continental can decide."

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