World’s Largest Airline

Posted: 03/02/2012 in Marketing, Strategy

Merging Continental and United means endless decisions, from uniforms to coffee

Last July, 14 months after United and Continental Airlines announced they were combining to form the largest carrier in the world, the merged airline took one of the thousands of steps required to integrate its fleet: It harmonized the coffee. Just as each carrier had its own logo, slogan, and peerage of frequent-flier status levels, each served its own blend of joe. Continental’s coffee was from a company called Fresh Brew, United’s was from Starbucks (SBUX).

“The new United,” as the merged airline called itself, had to choose. With one food-service supply chain, it made no sense to maintain two coffee contracts. And buying from one source offered the possibility of bigger volume discounts, exactly the sort of savings that United and Continental executives had hoped to create with the merger. The coffee question represented a tiny aspect of the problem of running an airline, but the quantities were huge: Last year the new United (UAL) sent enough coffee into the sky to brew 62 million cups.

On July 1 the new United introduced its new coffee. Fliers on the “legacy United” fleet, accustomed to Starbucks, let out a collective yowl of protest. Pineau-Boddison had expected some resistance—Starbucks, after all, is a popular brand—but this was something else. Flight attendants reported a barrage of complaints.

The beverage committee launched an inquiry. The coffee itself, they discovered, was only part of the problem. Airplane coffee is made from small, premeasured “pillow packs” that sit in a brew basket drawer at the top of the galley coffee machine. When the drawer is closed, boiling water flows through the pillow into the pot below. The old United brew baskets, the committee discovered, sit a quarter of an inch lower than Continental’s, leaving a space for water to leak around the pillow pack. That fugitive water was diluting the coffee—in fact, the old United had installed the deeper brew baskets for that very purpose, after passengers complained that their Starbucks was too strong. And so, by the end of the year, the beverage committee found itself back where it had started, trying out new pillow packs.

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