United Airlines CEO shares grim warning about companies ‘going out of business’ – they’re making mistakes customers hate

The CEO of UNITED Airlines has criticized the business models of other airlines, claiming that a major issue is preventing them from gaining repeat customers.

United Airlines CEO Scott Kirby believes “low-cost” airlines will go out of business.

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“It’s a fundamentally flawed business model,” he said Air Show Podcast. “Customers hate it.”

The CEO believes that airlines that offer basic planes in exchange for low cost often end up providing a poor customer experience.

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

“They didn’t treat customers right,” he said.

The CEO revealed that the experiences these travelers are having often make them not want to fly with these airlines again.

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

“And these airlines have grown enough that they really need repeat customers.”

Airlines like Spirit Airlines and Frontier are known for their low fares and proved Kiriby’s point.

Both airlines were ranked last and second to last in economic experience by J2024 D Power Survey which examined 11 North American airlines.

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

During this time, the airline’s shares fell by 73% and 39%.

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

The airline now offers a basic ticket that does not allow hand luggage, cancellation or flight change.

“They want the lowest price and are willing to have unbundled pricing,” he said.

“So we needed to build a basic economic pantry.”

AIRLINE DRAMA

Another airline is offering a cheaper flight option.

WestJet Airlines has now announced that it would offer “ultra-basic” airline tickets.

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

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

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

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

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

“There are few industries that can claim such price reductions over three decades, and we are very proud of the role we have played in making air travel affordable.”

Weatherhill also highlighted how the change will make flying more affordable.

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

“With UltraBasic, guests can customize a travel experience that meets their needs, without paying for additional services they take for granted.

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