Wednesday, Nov. 19, 2003 | 11:09 a.m.
SUN STAFF AND WIRE REPORTS
DENVER -- United Airlines officially unveiled its low-fare carrier Ted on Tuesday, a venture executives said could prove crucial to the bankrupt company as it tries to hang on to customers.
Will cheap tickets (in some cases), a goofy name, kids' toys for sale and free entertainment via multicolored earphones be enough?
"We'll measure success with Ted by whether we make the markets profitable and we keep the markets on our network for travelers," said Ken Bostock, United's manager for Denver operations.
The Ted fleet will begin with four Airbus A-320 aircraft and expand to as many as 45 planes by the end of 2004 (19 will be based in Denver, Ted's hub). Each A-320 will have 156 seats.
Ted tickets went on sale Tuesday, but the carrier won't start flying until February. Denver International Airport is also the home of discount carrier Frontier, and United's parent, UAL Corp., clearly hopes Ted will be competitive with low-cost carriers that are snatching customers from big airlines.
United is pitching Ted as laid-back fun, with free entertainment programming like Tedtv and Tedtunes.
"We want everything about Ted to be a little bit unexpected, a little bit outside the norm," said Sean Donohue, a United vice president and the company's "head of Ted."
Ted passengers can earn frequent-flyer miles on United and gain access to United destinations, and planes will include 66 seats with 4 extra inches of leg room, Donohue said.
Sample fares range from $59 from Los Angeles to Las Vegas, to $409 from Denver to Fort Lauderdale, Fla., Las Vegas, Phoenix and Reno.
The $59 Los Angeles tickets are one way, non-refundable and require a round-trip purchase, making the round-trip total cost $118 before taxes. That compares to Southwest Airline's $64 roundtrip fare, raising the question of whether Ted will be competitive on that route.
Other Ted fares for flights to and from Las Vegas: Denver, $328 round trip before taxes and San Francisco, $252 round trip before taxes.
Ted also will offer one-way, refundable walk-up fares on those three routes. Those fare include $193 to Los Angeles, $275 to San Francisco and $409 to Denver.
Ted also will serve New Orleans; Tampa and Orlando, Fla.; Ontario, Calif., and San Francisco. It is expected to have 106 daily flights by early April.
"For the longest time, we would see a lot of customers going to the competition," Ted pilot Luis Castillo said. "It was frustrating to see customers slip away and not do something about it. With the launch of Ted, we're doing something about it."
United is not the first traditional hub-and-spoke airline to try a discount carrier to compete with low-cost companies such as Southwest that have been gaining market share. In April, Delta launched Song, a low-fare airline that competes with JetBlue and AirTran on the East Coast.
Blaylock & Partners airline analyst Ray Neidl credited United for generating buzz for Ted but said it was too early to tell whether it would succeed.
"I'm a skeptic on low-cost airlines within airlines, because you don't get costs out of the system," Neidl said, adding that workers' salaries will still be high.
United has tried a low-fare operation before with United Shuttle, which was discontinued after the Sept. 11 attacks.
Donohue said Ted, which will use United pilots, is starting from a lower cost structure now that United has slashed $2.6 billion from annual labor expenses through the bankruptcy process.
Donohue would not detail Ted's costs, but said planes will be used more efficiently and be prepped for the next flight up to 20 percent faster than mainline United planes.
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