United seeking to recapture business customers

By Robert Manor and Becky Yerak
Chicago Tribune

CHICAGO — United Airlines is telling business customers that "it's time to fly" again.

The airline is bringing back hot meals on long flights, adding a key route to Asia and is even changing the color of its planes.

The aggressive branding campaign, which began yesterday when it introduced an airplane with the new look, is United's first significant customer promotion in more than four years.

It comes at a time when business travel is picking up across the country.

The airline, operating under bankruptcy protection, until recently had focused on cutting expenses. But last week United launched its new discount carrier, Ted, and yesterday made clear that it is looking to regain the business passenger.

In advertising, United will court that key market with the tagline "It's time to fly."

The airline's many destinations and flight options long made it the carrier of choice for business travel.

But United's advantage has diminished in recent years because of a weak economy and keen competition from low-cost airlines.

"You will see a stepped-up amount of advertising," said Martin White, head of marketing for United.

United began running print ads yesterday and television spots will start with ABC's Academy Awards broadcast on Feb. 29.

Along with the new tagline, the ads will feature the importance of face-to-face meetings. The marketing effort was created by the Minneapolis office of Fallon Worldwide.

United executives declined to say how much they are spending on advertising.

Since the Sept. 11 attacks and throughout its bankruptcy, United has kept a tight grip on ad spending, having pulled much of its $75 million ad budget.

United did introduce a new ad campaign targeting business customers last summer, but that effort was under the "We are United" theme the airline adopted early in 2002 in the wake of the attacks.

United spent about $5 million for that campaign and had been advertising infrequently until then.

The new television commercials will air on cable programs appealing to business travelers, including CNN, CNBC, and A&E. Spots will also appear on high-profile primetime, early morning and sports programming.

United's renewed effort to woo business travelers is a wise strategy, analysts said yesterday, although it is by no means guaranteed success.

Richard Aboulafia, an aerospace analyst with the consulting firm Teal Group, said United's strategy makes sense, and if business travel continues to pick up, the airline should see improvement.

"A lot of this depends on the broader economy because business travel depends on economic conditions," Aboulafia said.

As part of yesterday's news, United said it would add a daily flight from San Francisco to Beijing, an increasingly important destination for business travelers.

United is a strong player in flights to Asia, where margins are typically higher, and that has helped the airline recently.

"The Pacific markets are doing surprisingly well," said Graham Atkinson, senior vice president of worldwide sales and marketing. "Japan is showing real signs of economic recovery."

Also, he said the airline will increase the number of hot meals it serves on longer flights, although the number has not been determined.

The change in the airline's paint scheme for its aircraft will take years to complete, but the first newly painted 777 was put on view in San Francisco yesterday.

United's aircraft are currently painted gray and blue with a red pinstripe. In the new scheme, the top of the plane is white, three progressively darker blue stripes encircle the craft below the passenger windows, and the bottom is navy blue.

One marketing observer said United's new strategy for luring business customers might not be enough.

"It's difficult for a dinosaur to run like a cheetah," said Mike Paul, president of MGP & Associates PR, among United's public relations firms in the late 1990s.

But United could prevail in its comeback if it follows the precedent set by Continental Airlines, one industry analyst said.

Continental went through two bankruptcies and tried to become a low-fare carrier.

"That didn't work so they went back to their core of high service for the business customer," said Joel Denney, airline analyst for U.S. Bancorp Piper Jaffray in Minneapolis.

"They were able to turn it around pretty quickly," he said, and United could succeed as well.