January 4, 2007 - Performing for the Customer in 2007

Hi, it's Glenn.  It's Thursday the 4 th of January and this is our first call of the new year.  We have just finished one of our customers' busiest travel seasons and, while the period brought its share of unusual challenges, our performance year over year was significantly better than last year's in several important categories.  Although our cancellation rate was higher due to the weather, our departure rate was almost five points better than December of last year, with arrival performance better by 1 point.  United Express performance was also once again better than last year.

In talking with leaders across the company, the reason for the improved performance is very clear: no matter the issue, the teamwork and cooperation between our airports, operational groups and planning departments was very strong.  Whether we were facing record storms in Denver, ATC issues at O'Hare or code-share complications, we worked to serve our customers, minimize the impact to our operations and resolve issues quickly.  The ultimate outcome, despite some difficult days for both our customers and employees, was an overall response that managed complex issues effectively with the customer at the center of our focus.

Our performance in December creates a solid foundation as we enter 2007.  For more on our plans for the new year, I've asked Graham Atkinson, our chief customer officer, to join me on today's call.  So, Graham, I'll turn the call over to you...

Graham:

Thanks, Glenn.  In 2007, we are working against an aggressive agenda that will improve our premium customers' experience across a full range of areas.  The most significant projects will improve our customers' journey through our airports with a better lobby experience and faster boarding at our remaining four hubs in the first half of the year.  The lobby process will roll out to our top 21 stations in the second half of 2007 and the new boarding will expand to 40 stations by the end of the year.  All of this builds on the work our San Francisco team began in the last half of 2006. 

We're also focused on giving our Global Services members and 1Ks new ways to earn and redeem awards and upgrades.  Our customer-contact center employees are enhancing the support they provide to our Global Services members and other premium customers.  We're expanding EasyInfo and premium security lanes, and, by fourth quarter, we'll start rolling out our onboard premium product to provide our international customers with more space, amenities and service.

These product enhancements are just one part of the story, though.  We'll need to support all of this with a renewed focus on service that ensures we treat our customers as welcomed guests.  Just like Disney, Ritz Carlton and other well-known service brands, we want our customers to come back to United because of the experience they receive not only from our products, but from the quality of the interactions with our people.  We see countless examples of the kind of service that brings people back, but we also hear from customers that we are not as consistent with our service as they would like us to be.  For 2007, driving for consistency across their total travel experience will be our focus.

Helping us get there, we'll draw on solid, real-time data that provides meaningful feedback to our front-line employees and leaders.  In 2007, we will now have access to a much better source of data through our new customer metric, United Promoters. 

United Promoters replaces definite intent to repurchase as our key metric to measure customer satisfaction.  It is derived from the customer survey question: Based on your experience today, would you recommend United to your friends and acquaintances? 

Customer responses to this question are organized into three categories:

• Promoters who are loyal enthusiasts and definitely would recommend United
• Passives who are satisfied, but not enthusiastic and probably would recommend United; and
• Detractors who are unhappy customers and likely or definitely would not recommend United

To get the United Promoters score, we calculate the promoters minus the detractors, and that gives us a very good idea of customer behavior because we are asking our customers to link their own reputations with our own.  Research has proven that creating that link -- recommending a product to a friend -- is a predictor of customer revenue and that it does equate to customer satisfaction. 

For the first quarter of 2007, we'll continue to use Marketrak on board to administer the United Promoters question, but we will move to an online system called C-Track beginning in the second quarter.  Once we move to the online system, we will have access to the kind of real-time data that will help us meaningfully track and measure our performance for our products and services right across the company.

2007 will be an interesting, challenging and exciting year.  As we introduce new products, services, metrics and processes, we will continue to improve our customers' experience.  On one final note:  To help us with our work, we are announcing today that Barbara Higgins is joining United as vice president-Customer Experience, reporting to me.  Barbara has spent her 18-year career at Disney, building and leading that company's service organization.  We are looking forward to the leadership she will bring to the work we already have under way.  Glenn...

Glenn:

Thanks, Graham, and welcome to Barbara.  I also want to put the United Promoters metric into the larger context of the Success Sharing program.  For 2007, we are making a few changes to the program to align it with our business strategy and to continue to tie opportunities for reward for all employees to the performance of our business. 

Beginning with the first quarter, we will measure our quarterly performance against two operational metrics: on-time zero and United Promoters.  Our annual financial goal for 2007 will be operating earnings.  Operating earnings is a widely reported metric that reflects the financial strength of the company.  You will see more information next week in NewsReal and on SkyNet on our specific quarterly goals and throughout the coming weeks on Success Sharing. 

In 2006, we demonstrated how well we can perform when we work closely together. If we continue to deliver the experience our customers expect, particularly the value-added service our premium customers are willing to pay for, and continue to effectively manage our revenue and costs, we will raise the bar again in 2007.

That's it for now.  I'll be talking to you again soon.  Until then, stay focused on our customers, and of course on one another... and stay united.