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United Ground Express Expands To New Locations?

United Ground Express

United Ground Express ramps up its presence in other US airports with new job postings.

United Ground Express

December 9, 2015 is the first day of operations for United Ground Express at Battle Creek International Airport in Kalamazoo, Michigan (AZO) (News – August 10, 2015).  Per review of the latest job postings, the Chicago based airline looks to expand quickly to other cities. The next wave of airports that would likely include the following:

  • Binghamton – Greater Binghamton Airport (BGM)
  • Greenville–Spartanburg International Airport (GSP)
  • Hobbs – Lea County Airport (HOB)
  • Monterey Regional Airport (MRY)
  • Santa Fe Airport (SAF)
  • Syracuse Hancock International Airport (SYR)
United Ground Service 2016 Cities
2016 Potential Expansion Cities
Source: United Ground Express

All these airports feature United Express service (no more than three times daily using smaller regional jets from Embraer or Bombardier connecting to one of its hubs at Chicago (ORD), Denver (DEN), Newark (EWR), San Francisco (SFO) or Houston (IAH).

Analysis

United Ground Express will focus in the following areas:

United Ground Express Focus Areas
United Ground Express Focus Areas – Information taken from airline’s website. Infographic created by Experience The Skies  (All Rights Reserved)

Many airlines outsource their ground handling service to third party vendors to varying success. The major benefit is cost containment. To provide airlines with a better cost advantage, many vendors may offer a reduced set of wages and benefits to the employees. This may impact the quality of service and increase reputational and financial risks for the airline. As well, airlines may not have influence over strikes as some vendors are hired by airports directly (Refer to our coverage on a strike example at London/Manchester in late 2014 here)

Benefits and Costs

Bringing ground handling service in house can bring the following benefits for the new venture:

  • Companies will share the same policies on managing passenger expectations. Having the same objectives and performance metrics will lead to consistent set of goals for success that can be better measured and reported.
  • Easier to track any inefficiency and challenges in different stations and implement fixes in a more timely fashion instead of through additional contract negotiations or third party discussions
  • Quality control procedures can be implemented at all stations
  • Training can be managed in house which can reduce cost
  • Turnovers can be internally tracked and managed. There may be more incentive for employees to stay longer in the company for internal transfer opportunities, profit sharing availability and pension benefits

In doing so, United Airlines will likely incur initial setup outlays (including costs for hiring, training and onboarding). If operations are not managed with a set of standards / operating metrics, more costs can incur to remediate inefficiencies.

Key Success Factors for United Ground Express

For this new operations to be successful, United Ground Express should set consider the following items as part of forming a list of key success factors:

  • Employ industry wide standards (such as ISO9001:2008—Quality management systems) in managing the ground handling services. Control audits should be established  to evaluate performance and build improvements in a timely manner
  • Communicate and build performance metrics that is part of the company’s overall objectives. This will provide a common platform to set achievement goals
  • Don’t let costs be the only determining performance factor. Customer service such as timeliness in processing lost baggage can also be important.

Final Call

United Ground Express is expected to ramp up service very quickly as it takes over contracts from third party vendors. Six new airports are candidates for the new offering in 2016. It is a good idea for United Airlines to gain experience in operating the new service before expanding to bigger airports.

 

2 thoughts on “United Ground Express Expands To New Locations?

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