United touts growth in its share of new travellers as rivals see loyalty boosts

31 July, 2019

United Airlines grew the number of new flyers travelling with the airline by double digits in early 2019, and cited particularly robust growth among Millennial customers.

Executives from United recently explained that its share of new flyers - customers that take three or more trips per year with the airline - grew +11% in early 2019, "a noticeable increase year-on-year", noted company chief commercial officer Andrew Nocella.

He added United is seeing strong engagement with those new flyers across multiple areas including travel spend, being a co-branded credit card holder and achieving premier status with the company's MileagePlus loyalty programme.

"Growth among millennial travellers has also been especially strong, which is critical to securing our next-generation of loyal repeat customers," Mr Nocella concluded.

United's corporate revenues in 2Q2019 grew +6% year-on-year, which was consistent with its top-line passenger revenue growth of +6.1%.

The airline's new revenue management system Gemini helped United post a 13% increase in corporate revenues in 1Q2019. With Gemini, United has been holding more seats for billing later in the booking curve. The airline's double digit top line corporate revenue growth for the first three months of 2019 was nearly double its top-line revenue passenger revenue growth of +7.1%.

Other US carriers are touting the value of their loyalty schemes. Southwest Airlines president Tom Nealon stated on a recent earnings call that the carrier's Rapid Rewards programme achieved "extraordinarily strong performance" in 2Q2019, with revenue up +15%. Credit card acquisitions were "strong" while credit card retention rates "continue to be very high", he noted, adding the programme's economics are "very, very strong".

The carrier recorded a "slight negative impact" to Rapid Rewards redemptions and ancillary revenue due to the Boeing 737 MAX grounding, but Mr Nealon sees a "tremendous number of opportunities" for its Rapid Rewards programme to "significantly" grow in the future.

Meanwhile, American Airlines Group president Robert Isom has stated the carrier continued to see growth across its loyalty programme in 2Q2019, with members "engaging with us more" and redemption bookings increasing. He noted there was also a "strong" trend in credit card acquisitions, spend and account growth.

Mr Isom also confirmed corporate revenue growth was "in line" with its system revenue growth during the period. Corporate growth continued to grow and was "further strengthened" with "industry leading" corporate passenger share performances during the "last six weeks of the quarter". He noted the "small to medium" business segments experienced "significant growth", resulting in "nearly double digit revenue growth" year-on-year.