Taipei Times: Who is United Airlines Taiwan and what is your company's current market position vs. other international airlines flying the Taiwan route?
Andrea Wu (
PHOTO: CHIANG YING-YING, TAIPEI TIMES
The majority of our clients are business travelers who put value on the airline's networks and reliable services. For example, United serves a daily non-stop flight to one of its west coast gateways, San Francisco, arriving in the morning and conveniently connecting to other destinations in the US. The same flight flies on to New York, the American financial hub. Our customers choose us over our competitors for this network and convenient connections. We have positioned ourselves as the airline of choice for business travelers, a high yield market in Taiwan.
TT: When flying internationally out of Taiwan, why would travelers want to choose United over the competition?
Wu: We offer a comprehensive network of over 200 destinations in the US with convenient connections from our gateways.
On the product and service side, we have been investing heavily in enhancing our customers' travel experience with the introduction of premier seating products. We have already announced a program to upgrade our inflight products, and the installation of a lie-flat bed in the First Class of our international fleet will be completed at the end of this summer. We are the first US carrier to offer this product to our customers. I'll tell you, once you try the lie-flat bed, its hard to go back to regular seating on long-haul flights.
The program will continue until the reconfiguration of our Business Class cabin and installation of Economy Plus in our international fleet is completed later this year. Both of these initiatives basically mean more leg room for passengers.
We have reconfigured 88 seats on 747s with extra leg room in Economy Plus class -- for the same price. These seats are for our loyal customers who are Mileage Plus members.
Our Mileage Plus frequent flyer program plays a key role in retaining customer loyalty. Mileage plus is one of the most generous mileage programs in the world, giving mileage awards for all paid tickets including full fare tickets, discounted tickets and group tickets. People do come back for Mileage Plus. We have 150,000 Mileage Plus members of which 30,000 are active members in Taiwan.
United was also a pioneer in the creation of a local online booking engine for Taiwan. In addition to being able to book travel via the site http://www.tw.ual.com, it also offers a number of travel related services and information on our products and services.
TT: Taiwan as a nation suffers from a poor air safety record. How is UA's safety record?
Wu: Safety is always on the customers' minds when they book air travel. United always puts safety as a top operational priority and has a proven safety record.
We often use stricter safety standards on our aircraft than is required by the US aviation authority. United operates a fleet of over 600 aircraft made up of Boeing, Airbus and McDonnell Douglas aircraft. A key to safety is having a strong maintenance team. Due to our top-notch maintenance record, we have been retained by the US government to lend our expertise to the US Air Force.
United Services, a subsidiary of UA, signed a five-year contact with Boeing in 1997 to provide routine maintenance and repair for the US Air Force's four C-32As. C-32A is the same version of B757-200 in the commercial planes. In addition, several United Services employees are stationed at Andrews Air Force Base to provide logistics and technical support, while mechanics at the San Francisco Maintenance Center perform C-32A component maintenance and engine overhauls. The US Air Force's 89th Airlift Wing operates the C-32As, providing service for the US vice president, cabinet members and other high-ranking US and foreign government officials.
TT: Where does the nation stand as a revenue earner for United in Asia?
Wu: Asia is increasingly important to our operations financially and we operate to 13 destinations in Asia Pacific with the majority providing non-stop service to the US.
In 2000, UA's Pacific operations accounted for 16 percent of the company's total revenues. Though the percentage that Taiwan contributes to the airline's global operation may not be significant, I would like to stress that Taiwan is important to United because of the strong trade partnership between the two countries.
TT: With most airlines witnessing a serious drop off in business class travelers, how much has United's Taiwan outbound business class been effected?
Wu: We have to admit that like other airlines, our business in Taiwan has been impacted by the global slowdown of business travel. United is doing okay in the Taiwan market given the strong business ties between Taiwan and the US. The slowdown is more on the US side -- inbound Taiwan flights, outbound flights have not been affected as much.
We did better than our forecast in the first quarter but expect to face more challenges in the coming months. It is not our company policy to disclose actual business figures.
TT: Air fares across the Asia-Pacific region rose in all classes during the second quarter as airlines tried to improve profitability. So why are prices dropping in Taiwan and what is United's local pricing strategy?
Wu: Because this is the high-season for air fares -- mid-June through the end of July -- and of course there is also another high season around Chinese New Year -- this year is particularly bad and other carriers are all feeling the heat of low volume this summer. They are already dropping prices to fill seats. But fortunately our load is still good, so I don't see why we should cut prices at this point. We hope we don't have to because when the prices go down its hard to bring them back up.
If everyone joins the price war, this market will result in low profit margins for everyone. That is why you have seen some other international carriers enter the market, only to later leave. We don't want to see that happen, we have been here for 15 years and plan to stay.
TT: What kind of opportunities does Taiwan's planned entry into the World Trade Organization (WTO) late this year or in early 2002 create for United?
Wu: We see a positive impact for United from Taiwan's proposed entry to the WTO. With WTO status, Taiwan is in an even better position to build business links with the world. This will build on the already close links between Taiwan and the US and benefit business on the both sides. In the short term, we will still face the challenge of an economic slowdown but we are optimistic for growth in the long term.
TT: Currently the Chen Shui-bian administration is busy putting the final touches on a draft of what has been called a positive and comprehensive policy regarding the implementation of full direct trade, transportation and communications ties with China. What, if any, plans does United have to compete in cross-strait transportation and what do you make of China's talk of classifying the air links domestic, purportedly to ban international carriers from the routes?
Wu: United appreciates that commercial opportunities are growing in both Taiwan and mainland China as the two territories come close to WTO entry. We always monitor trends in the markets and will move quickly to respond to changes in demand. United does not fly between Taiwan and mainland China via other destinations in the region but instead fly non-stop to Beijing, Shanghai, Taipei and Hong Kong from the US. We believe that any initiatives by the two Chinese governments to promote trade, transportation and communications across the Strait will benefit the two economies and have a positive impact on the demand for air transport in general.
TT: What do you think about the local perception that the young, energetic staff employed by Asia-based carriers offer better inflight service than the often aging inflight staff of international carriers?
Wu: As an airline employer, we do not see age as an important factor when it comes to our staff providing quality service to our customers. A cabin crew's service onboard consists of more than just offering drinks and snacks. If I were a passenger I would look for experience -- age is not the key to professionalism.
A major part of their work is to ensure flight safety. They have to be able to react quickly when something happens during an emergency flight situation, only well-trained personnel will know what to do. We have a very strict training program for all pilots and flight attendants. Again, beauty and youth mean nothing in an emergency.
TT: What are the pros and cons of being a woman at the top of one of the biggest international airlines in Taiwan?
Wu: Because I represent a very reputable international company, people don't approach me or avoid me because of my gender -- unless it's related to some women's organizations.
As for business organizations, they are above the gender issues and approach me for who I am and the organization I represent.
I am proud of my gender and grateful that society has matured to the level that this is not really an issue. Actually the heads of several airlines in Taiwan are women, including China Airlines, Philippine Airlines, Air France and British Airways. Personally, I hope to be a role model for young women and encourage them that you can achieve anything you want if you really put your heart into it.
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