United's business plan

It looks like, contrary to my prediction, United may be exiting bankruptcy. The WSJ discusses United’s plan: after high costs plunged it into bankruptcy, become . . .a high-cost alternative to the budget-conscious airlines. The article says that United is better run now than when it went into Chapter 11. But as I noted in the post linked above, its gaffes keep alienating customers.

Moreover, if the company is planning to ride its highest-paying customers into its future, what happens the next time the economy turns down? Those $4500 first class seats to LA will be the first luxury to go.  And if the strategy works during good times, United can expect competition at the high end.  Then it's just going to have to be run more consistently than it has been for many years.

I continue to believe that at least one airline has to terminate for the industry to stabilize. Then, instead of competing with companies whose costs are artificially managed in bankruptcy, the airlines can invest in their brands. We might actually get an airline that offers an acceptable and consistent level of good service to a customer base it can sustain through good and bad times.

In the meantime, if United does check out of bankruptcy, I suggest that it leave some luggage with the front desk.