FlightPlan III: COVID-19 Could Signal End of Commodified Airline Industry, Says Kirby
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The final interview session during FlightPlan III: C-Suite Week, which was developed by Inmarsat Aviation and APEX, saw United Airlines CEO Scott Kirby discuss how he plans to position United as an industry leader in terms of both the passenger experience and sustainability.
United Airlines’ CEO Scott Kirby believes that should airlines use COVID-19 as a “transformative moment” to refocus on “turning air travel from something people dread into something they look forward to,” we could see the de-commoditization of the industry as a result.
And with its recent order for 270 new aircraft, as well as its plans to become the launch customer for Boom’s supersonic jets, United is already acting on its bet that in a post-COVID-19 world passengers will care even more about the hard product than simply price and schedule.
As well as the pandemic proving a good time to purchase new aircraft, primarily because United was able to secure them at far below list prices, Kirby said the carrier was always planning to go the opposite way to the rest of the industry, which it predicted would pull back during COVID-19. The goal? To “cement its position as the biggest and best airline in the world.”
For Kirby, embedded in-flight entertainment (IFE) is number one in terms of importance when it comes to hard product, which is why all its new single-aisle jets will come with seatback IFE and United is hoping to complete “the fastest retrofit in history” on its existing narrow-body fleet. “People like the food better if there’s entertainment. The food scores go up about 10 points! It just shows you what a halo effect that creates … and it improves the soft product too, because the crew are proud of it.”
He also believes in the appeal of supersonic travel to all travelers, not only because tickets will be offered at standard business-class prices, but because of the experience. “I’ve had a huge number of emails from people asking if they can book on the first flight.” On the subject of potential routes, which Kirby explained will be over water due to the noise from the supersonic boom, he said, “We’ve talked about doing one flight a day for a while between the US and Hawaii, not because we need to, but because there would be demand.”
“People like the food better if there’s entertainment.”
Scott Kirby, United Airlines
In terms of United’s ongoing recovery from COVID-19, the airline has already reported that its domestic leisure demand has reached over 100% of pre-pandemic levels. “The psychological turning point was when the CDC said masks were no longer required indoors. That was a rocket ship to demand,” stated Kirby.
He is also optimistic that inter-US business travel will have completely recovered by 2023. “That belief has grown more and more confident over time. It’s about human relationships. I’ve started traveling for business again and I think once you do, you realize you took it for granted before,” he explained. “At the beginning of this year, US business travel was down 90%, but today it is only down 60%. That’s a big improvement.”
As ever, Kirby was outspoken on the topic of sustainability. As well as extolling the virtues of its future Boom aircraft, which he said will feature the first engine “built from the ground up for sustainable aviation fuel,” and will burn a fraction of what Concorde did because it won’t rely on afterburners, he called out governments and businesses on their approach to going green.
He supports the mission to achieve net-zero carbon emissions, but said it’s important to be realistic about when and how to achieve that goal. Referencing the recent heatwaves in the northeast US, he argued that setting a deadline of by 2035 isn’t achievable. “We wouldn’t have reliable power. If we turned off all the coal and natural gas plants in 2035, we wouldn’t have enough power to keep the air conditioning on. It would kill people … and that would do more damage than good in the fight against climate change.”
Kirby also reiterated that carbon offsets are not a viable solution, concluding, “We have to be real about what the real answers are.”
You can access the full interview and others from the event here.