Tag: United Airlines

OM in the News: Operations Decisions at Newark International

On the Friday before Christmas, United Air Flight 1080 from Newark to San Jose, Costa Rica, returns to the gate with a mechanical issue. The only available replacement sits across the airport. Moving passengers would mean telling vacationers to switch terminals. Baggage-loaders would need to transport luggage across the airport, potentially making them late to service other flights. The crew would need to move, too. United operations staff, which includes customer service, ramp services and the aircraft move team— decide to tow the new plane to the travelers. Passengers wait an hour longer than they might have if the plane stayed put, but don’t have to drag their belongings across the airport.

The station operations center manager controls UAL holiday travel at Newark Airport.

“This is the center of a spider web,” says United’s station operations center director. If you touch one part of the web—maintenance, baggage, catering—you affect all parts.

For years, Newark has been a source of delays due to a shortage of air-traffic controllers, crowded skies and bad weather, writes The Wall Street Journal (Dec. 30, 2024). When the controllers are understaffed, fewer flights operate each hour. The shortages are particularly difficult for United, which makes up about 75% of Newark’s air traffic. When travelers have a bad experience with a delay or long wait on the tarmac, they often blame United.

Getting operations right is mission-critical, especially during a record-setting time for holiday travel. Throughout the day, staffers monitor what they call quick turns, or shortened times before a plane needs to take off again. Cleaning staff, baggage workers, ramp agents and others associated with prepping a plane use one app that gives specific time requirements for meeting performance metrics. Within 6 minutes of arrival for some planes, the cleaning crew should be on the plane.

The careful choreography of moving planes around a space-constrained airport doesn’t always work when catering is late or bags load slowly. The average taxi time at Newark is about 25 minutes, but can stretch above 40 minutes during irregular operations. The FAA can issue ground stops or delays due to weather.

In Chapter 15, Short-Term Scheduling, we open with a Global Company Profile on how Alaska Air deals with its frequent weather delays. United, as we see at Newark, also faces a slew of operations decisions.

Classroom discussion questions:

  1. What operations issues must airlines face every day?
  2. How does Newark differ from Seattle (home of Alaska air) and how are they similar?

OM in the News: United Turns to Farm Waste for Jet Power

Airlines are under growing pressure to reduce carbon emissions and lower costs
Airlines are under growing pressure to reduce carbon emissions and lower costs

“Sometime this summer,” writes The New York Times (June 30, 2015), “a United Airlines flight will take off from Los Angeles for San Francisco using fuel generated from farm waste and oils derived from animal fats.” For passengers, little will be different — the engines will still roar, the seats will still be cramped — but for the airlines and the biofuels industry, the flight will represent a long-awaited milestone: the first time a domestic airline operates regular passenger flights using an alternative jet fuel.

For years, biofuels have been seen as an important part of the solution to reducing greenhouse gas emissions. And airlines, with their concentration around airports and use of the same kind of fuel, have been seen as a promising customer in a biofuels industry. Airlines have every reason to adapt, not only to reduce pollution but also to lower what is usually their biggest cost: jet fuel.

United is announcing a $30 million investment in one of the largest producers of aviation biofuels, Fulcrum BioEnergy. Fulcrum has developed a technology that turns household trash into sustainable aviation fuel that can be blended directly with traditional jet fuels. It is building a biofuel refinery in Nevada, and has plans for 5 more plants around the country. The technology can cut an airline’s carbon emissions by 80% compared with traditional jet fuel.

United’s deal is one of many that airlines are making. Alaska Airlines aims to use biofuels at least at one of its airports by 2020, and Southwest just announced it would purchase 3 million gallons a year of jet fuel made from wood residues. Last year, British Airways joined with Solena Fuels to build a biofuel refinery near Heathrow Airport. The airlines seem to have little choice. Unlike automakers, they cannot turn to other options like electrification.

Classroom discussion questions:

1. Why is sustainability so important to the airlines?

2. What other measures can airlines take to become “greener”?

OM in the News: The Outsourcing Trend at Airlines

aa baggageAirline representatives at U.S. airports increasingly aren’t employees of the carriers they represent, reports The Wall Street Journal (July 8, 2014). United Continental Holdings, for example, will soon outsource jobs at 12 airports to vendors who will perform the duties at lower cost. The change impacts 635 workers in areas including check-in, baggage-handling, and customer service. Part of a broader effort by United to cut costs, it reflects how big U.S. airlines are using vendors to handle key jobs at most airports, a trend that can reduce expenses but also risks hurting customer service.  American, Delta, and Alaska Airlines are among the carriers that already outsource a large share of this work.

Passengers often don’t realize the check-in agents they deal with at airports don’t work for the airline they are flying. Often, at smaller airports, the same workers may represent multiple competing carriers.

United pays such workers from $12 to $24 an hour, while some vendors start workers at $9 an hour and don’t offer health coverage or travel benefits. Outsourcing the work will save United $1.6 million to $3.5 million per airport a year. “It does make economic sense,” said an industry consultant. “It’s not a $40,000 job to load bags. Cleaning planes is not a $20-an-hour job. But the outsourced work offers no career path, no loyalty. By its nature, it’s temporary, until the next bid comes up.” Indeed, the transition can be bumpy. When Alaska Airlines decided to use Menzies Aviation to handle ramp jobs at its Seattle hub in 2005, the shift was marked by misplaced luggage, late flights and an incident in which a damaged aircraft had to make an emergency landing. But the problems eventually were corrected.

In some cases, airlines are outsourcing airport work to their competitors. United last year turned over 500 jobs to a unit of American Airlines. United has said that as many as 30 more airports may be targeted for outsourcing, based on their higher expenses when benchmarked against competitor airport costs.

Classroom discussion questions:

1. What are the advantages and disadvantages of outsourcing in this industry?

2. Do customers care which system is used?

OM in the News: How Operations Management is Helping United and Continental Merge

The “productivity challenge”  that we discuss in Chapter 1 comes to the forefront in the merger last October of two mega air carriers, United and Continental. Now the world’s largest airline (with more frequent flyer members than France has citizens), United Continental has turned to OM to lead the integration efforts. Shaving a half-cent off per-mile operating costs can boost profits by $260 million per quarter–something Wall Street was promised with the merger.

Businessweek (July 4-11, 2011) reports how “33 integration teams are making thousands of decisions, ranging from the fastest way to clean 1,260 airplanes and board passengers to which perks to offer in the frequent-flier program“. Most of the decisions are OM-related and team members come from technology, labor, fleet management, and network planning. In technology alone, the carriers have 1,400 separate systems, programs, and protocols. (Continental had 600 programs for tasks such as crew scheduling, dispatching planes, and managing cargo, while United had 800).

Economies of scale favor big airlines, but mismatches complicate every detail. Workers, for example, come from different labor unions with dissimilar work rules. United has 1st class cabins, while Continental has just business and coach. And history has not been kind. Pilots and flight attendants at US Airways (the merger of US Air and America West) are still operating under separate contracts with different pay, schedules, and work rules–6 years after their marriage!  Delta has been bogged down in a labor dispute over pay and work rules since its merger with Northwest in 2008.

That’s why United Continental execs are so focused on the minutiae of the operations integration. “It’s not important how many things come from United and how many from Continental”, says the VP-Integration Management. “Keep the emotions out of it and don’t keep score”.

Discussion questions:

1. Why does OM drive a successful airline merger?

2. Why have other mergers run into problems?