NEW YORK (AP) — Jeff Smisek says he was drawn to the airline business for a simple reason: the complexity.
"People who love challenges get into this business," says Smisek, a former corporate lawyer turned airline CEO.
He faces many as he tries to combine United and Continental into the world's largest airline.
Most of his day is spent integrating the airlines' different cultures, fleets and unions. Managing sky-high fuel costs is also high on his to-do list. And before he leaves the office, Smisek reads as many emails as he can, including those from passengers upset they got stuck with the middle seat.
Smisek, 57, graduated with honors at both Princeton University and Harvard Law School. He was CEO of Houston-based Continental when it merged with United a year ago, leapfrogging Delta Air Lines Inc. as the biggest. The combined airline took United's name and its Chicago headquarters, but the top executives who run the operation came mostly from Continental.
In 1995, Smisek left a job as a partner at Vinson & Elkins LLP, specializing in mergers and acquisitions, to join a turnaround team at Continental. Now, he oversees more than 86,000 employees and 5,700 daily flights. United Continental Holdings Inc. carries more than 142 million passengers a year to 376 destinations around the globe.
Smisek jokes that if United and its partners don't fly someplace, then "you don't want to go there."
The combined airline isn't worrying so much about attracting vacationers. Instead, it is targeting business travelers who tend to pay more for last-minute tickets and focusing on lucrative international routes. The airline is also looking at new ways to get more money from passengers.
Smisek says airlines probably won't add more baggage fees. However, there will be plenty of other extra services that his airline will offer, for a fee.
Smisek sat down with The Associated Press in New York and discussed the economy, airfares, and why air travel was never glamorous. Below are excerpts, edited for length and clarity.
Q: What's your take on the economy and how that might affect air travel?
A: We have a lot of different geographies we operate in. Latin American markets are doing extremely well. The Pacific market is doing well. The European market is actually holding up far better than I would anticipate given all the turmoil. And the U.S. market is just sort of chugging along, sort of sideways. We're not seeing any decrease in business travel. We're not seeing any increase.
Q: Are there two or three big changes that air travelers will see in the next five years?
A: We have an enormous amount of data about our consumers that we do not adequately use today. You're going to see more targeted marketing, on an individual basis. We know how frequently they travel, where they travel, when they travel. Often we know whether they're renting a car, or a hotel. We know their propensity to upgrade or buy an upgrade.
Q: Is there anything that will make airfare pricing less complicated?
A: No. I think what you're going to see is more choice. And choice can become complex.
Q: What's your verdict on the status of the merger?
A: We're exactly where we expected to be, in terms of things that we've accomplished. The only thing where we haven't gotten where we wanted to be by this point is in getting the labor agreements done. With the pilots, there has been some degree of intra-union politicking going on and that has delayed it. But that, you can't lay at the feet of management.
Q: A lot of people love to hate the airlines. Do they expect too much from you?
A: We're in the business of getting people safely from point A to point B, on time, with their underwear. That's what we do for a living and we are really good at it. The mental image people have of the glamour of flying was when flying was unaffordable. When I was a child, I didn't fly — we couldn't afford to fly. Flying was for rich people. Today, flying is for everybody.
Q: Are there any foreign airlines doing things you think are especially innovative?
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