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4-Traders Homepage  >  Equities  >  Nyse  >  UNITED CONTINENTAL       

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United hit by delays as glitches beset system merger

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03/04/2012 | 10:36pm CEST

United Airlines battled service problems including flight delays, faulty kiosks and jammed phone lines this weekend as it worked through technical glitches during its combination of the United and Continental Airlines reservation systems.

The airline on Saturday adopted the reservation platform of the former Continental Airlines after the companies merged to form the world's largest carrier, now known as United Airlines. It is owned by United Continental Holdings Inc (>> United Continental Holdings, Inc.).

But after spending months preparing for the change -- including training about 15,000 employees on the new software -- United said on Sunday that technical issues had flared up at airports across the system, causing delays.

In particular, problems with the company's airport check-in kiosks meant customers had instead to line up to see service agents, spokeswoman Megan McCarthy said.

"We did have some issues with our kiosks and at times that slowed the check-in process," McCarthy said, adding that the airline's performance had improved by Sunday afternoon.

By 2:30 p.m. CST (2030 GMT), 83.1 percent of domestic mainline flights were arriving on time, in line with the company's 80 percent monthly goal, McCarthy said.

Earlier on Sunday only 75.5 percent of United's mainline flights were on time -- arriving within 14 minutes of their scheduled slot -- as were about 87.1 percent of its Express flights. The day before, just 75 percent of flights were departing within 30 minutes of their scheduled time.

"Our IT department still continues to fine-tune our system," McCarthy said.

The company's website said its call centers were "currently experiencing extraordinarily high call volumes" and that in some cases, hold times were more than an hour. Customers might be advised to call back another time, it said.

Other issues that irked some customers included a delay in merging the airlines' air-miles programs. The airline said it had put up a notice on Saturday morning saying air miles could take up to 72 hours to be updated.

United promised one customer, Daniel Woo, in its Twitter feed on Saturday morning that he would be able to see combined miles within 24 hours.

But on Sunday, a Reuters editor flying United said the check-in computer had not recognized her frequent-flier number in a manual entry nor in a reading of a United credit card.

KIOSK, AIR-MILE PROBLEMS

Michael Boyd, an airline consultant at Boyd Group International in Evergreen, Colorado said his wife was waiting for her air miles to be transferred but added that two of his colleagues had travelled United without incident on Sunday.

"It doesn't look like it's a major meltdown. It looks like a glitch," said Boyd, who says he has carried out no consulting work with United and is not working with any of its competitors.

Boyd said arrival times seemed normal but added that kiosk problems would make travelers anxious, particularly as airlines tended to have much fewer check-out counters open since kiosks had become more prevalent.

"When the kiosk refuses to talk to you, who do you yell at?" he said.

Migration to a single reservation system comes with risks, as US Airways Group (>> US Airways Group, Inc.) learned in 2007 when it attempted to combine the reservation systems of the former America West Airlines and US Airways. The two airlines merged in 2005.

A glitch in combining that system caused self-service kiosks to fail and forced passengers to stand in extraordinarily long lines. Thousands of travelers had to wait and about 500 at the Charlotte, North Carolina hub missed flights.

Delta Air Lines (>> Delta Air Lines, Inc.) had a much smoother transition to a single reservation system following its 2008 merger with Northwest Airlines.

Since the United transition, customers going to the Continental.com website are now directed to the United website.

The United website said on Sunday afternoon that "the systems integration process is almost complete". It said the system conversion involved moving millions of reservations and re-establishing numerous communications links.

(Reporting by Sinead Carew in New York and Kyle Peterson in Chicago; Additional reporting by Ros Krasny in Seattle; Editing by Dale Hudson)

By Sinead Carew and Kyle Peterson

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Financials ($)
Sales 2016 36 155 M
EBIT 2016 4 680 M
Net income 2016 2 444 M
Debt 2016 5 382 M
Yield 2016 -
P/E ratio 2016 7,30
P/E ratio 2017 7,73
EV / Sales 2016 0,60x
EV / Sales 2017 0,61x
Capitalization 16 488 M
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Mean consensus OUTPERFORM
Number of Analysts 14
Average target price 58,7 $
Spread / Average Target 15%
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Managers
NameTitle
Oscar Munoz Chief Executive Officer & Director
J. Scott Kirby President
Robert Aaron Milton Non-Executive Chairman
Gregory L. Hart Chief Operating Officer & Executive Vice President
Andrew C. Levy Chief Financial Officer & Executive Vice President
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