United: Ads will 'play a big role'

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As it faces bankruptcy, United Airlines said it would continue to invest in advertising to keep customers from fleeing to rival airlines.

"Marketing will play a big role in our recovery," United Worldwide VP-Marketing Jerry Dow told Advertising Age last week. "For the immediate future our intent is just to communicate in a frank, open and honest way with our customers to manage their expectations."

A weekend bankruptcy filing for the UAL Corp.-owned carrier appeared imminent after the federal Air Transportation Stabilization Board refused to grant United a $1.8 billion bailout loan last week.

At least one airline analyst said it would take more than ads to maintain customer confidence. "Frequent fliers don't care whether you're flying today," said the analyst, who asked not to be identified. "They want to know if you'll be flying next year and the year after that."

Publicis Groupe's Fallon Worldwide, Minneapolis, handles United's domestic and global accounts. A print ad appeared Dec. 5 in The New York Times, a day after the decision against the loan. The ad promised cutomers: "We'll treat you like our future depends on it, because it does."


United is also in the middle of a review for its Mileage Plus customer loyalty account. "It's moving ahead," Mr. Dow said, "and I believe they will have a decision before Christmas." As many as 12 agencies contended for the $50 million account, although it is unclear how many remain involved. Fallon is not part of that review.

United spent $43 million through August in measured media, according to Taylor Nelson Sofres' CMR. It spent $58 million in all of 2001 and $78 million in 2000.

United's strategy is similar to that of US Airways, which filed for bankruptcy last August but continued its Dividend Miles program as a way to keep its customer base as it works toward recovery. United has 40 million enrolled members in its Mileage Plus program.

That task is made more difficult by rival carriers, which are likely to try to lure United's customers. Three United competitors-American Airlines, Continental and Northwest-lobbied against its application for a bailout.

Industry analysts said it is critical for United to convey to skittish customers that it will be business as usual during the bankruptcy filing.

"Bankruptcy is a highly uncertain process," said Garrett L. Chase, a Lehman Bros. analyst. "While the highest probability is clearly that United will reorganize and emerge from Chapter 11 largely intact, that is hardly a foregone conclusion."

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