United Airlines CEO shares dark warning about companies 'going out of business'

UNITED Airlines’ CEO has taken shots at other business models, claiming that one key issue is stopping them from getting repeat customers.

Scott Kirby believes that low-cost airlines are going to run themselves out of business.

United Airlines CEO Scott Kirby believes certain airlines won't be able to make it due to their business mode

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United Airlines CEO Scott Kirby believes certain airlines won’t be able to make it due to their business modeCredit: AFP or licensors
Kirby believes there is a key issue preventing airlines from getting repeat customers

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Kirby believes there is a key issue preventing airlines from getting repeat customersCredit: Getty
United Airlines CEO Scott Kirby believes that "low-cost" airlines are going to run themselves out of business

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United Airlines CEO Scott Kirby believes that “low-cost” airlines are going to run themselves out of businessCredit: Getty

“It’s a fundamentally flawed business model,” Kirby told The Air Show podcast.

“The customers hate it.”

The United Airlines CEO believes airlines that offer bare-bones planes in exchange for a low cost usually end up giving customers a bad experience.

Kirby explained that these companies often end up ignoring customer service in the long run.

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“They haven’t treated customers right,” he said.

The CEO revealed the experiences these travelers are getting, often make it so they don’t want to fly with these airlines again.

“You can do it once, but you don’t get to do it to them twice,” Kirby said.

“And those airlines grew big enough that they actually need repeat customers.”

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Airlines like Spirit Airlines and Frontier are known for their low fares and have proven Kirby’s point.

Both airlines have been ranked last and second to last in economy experience by JD Power’s 2024 survey that examined 11 North American airlines.

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The two also received the highest number of customer complaints in 2023, according to the Department of Transportation.

However, Kirby had to admit that while he believes the business model has its faults, United Airlines did need to adopt its own cheaper tickets.

The airline now offers a basic ticket that doesn’t allow a carry-on, cancellations, or any flight changes.

“They want the lowest price, and they’re willing to have a disaggregated price,” he said.

“So, we needed to build a basic economy cup.”

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Another airline is offering a cheaper flight option.

WestJet Airlines now announced that it would be offering “ultrabasic” airfare.

Like United, the new flight option would not include many of the amenities of coach, including a free carry-on bag.

John Weatherill, WestJet Group executive vice-president and chief commercial officer, explained the change in a statement.

“At WestJet, we take our responsibility for providing affordable air travel to Canadians very seriously, and our track record in doing so is unmatched,” he said.

“As the airline that democratized low-cost air travel in Canada, real ticket prices have dropped by roughly half in the two decades following WestJet’s first flight.

“[Thus] enabling twice as many Canadians to travel by air.

“There are few industries that can claim such a price reduction over three decades, and we take great pride in the role we have played in air travel affordability.”

Weatherill also highlighted how the change will make flying more accessible.

“We are committed to air travel affordability, and UltraBasic is an innovative cost-effective solution that strengthens WestJet’s ability to offer guests budget-friendly airfares to more destinations,” he said.

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“With UltraBasic, guests can tailor a travel experience that meets their needs, without paying for additional services they don’t value.

“We are delivering on our low-fare promise and believe UltraBasic will give more Canadians the opportunity to fly.”

Article source: https://airlines.einnews.com/article/718281759/yNqHKqmWZ2GxcrP3?ref=rss&ecode=vaZAu9rk30b8KC5H

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