United Airline's E-Commerce Unit Takes Off

UAL Corp.'s United Air Lines Inc. is rolling out a wide variety of online travel services at Internet speed, thanks to its decision to split off a separate e-commerce unit.

Just last week, it unveiled a revamped Web site and a new flight-status paging service.

The moves follow a steady stream of e-commerce activity by the Chicago-based airline as it looks to capitalize on the $4.2 billion online travel market, which is projected to grow to $16.6 billion by 2003, according to Jupiter Communications Inc. in New York.

Earlier this month, United announced plans to launch a 70-person e-commerce subsidiary dedicated to online and wireless strategies.

Scott Praven, head of the new division, said the unit has an advantage because it can focus exclusively on growing online revenue.

In addition to its Web site, United has launched CollegeTravelNetwork.com, an online service created to address the travel requirements of college students.

It's also developing an online travel store with Aliso Viejo, Calif.-based retailer Buy.com Inc. It is scheduled to debut this month.

Last month, United announced a partnership with Delta Air Lines Inc., Northwest Airlines Inc. and Continental Airlines Inc. that will create the first multiairline travel portal to offer Net-only fares.

"[United is] strategizing so they're in every area of travel in e-commerce," said Krista Pappas, an analyst at Gomez Advisors Inc. in Lincoln, Mass.

Only 4% of United Airlines' tickets are currently issued online through UAL.com and other online booking services, officials said. That figure is expected to reach 20% by 2003.

To reach those goals, United and other airlines are separating their e-commerce units as "dot corps" to compete online. Delta launched its 40-person eDelta group last February.

"You have to have a group of decision-makers in one room to keep things moving continually," said Kevin Dunn, Delta's e-commerce manager.

American Airlines in Fort Worth, Texas, has an interactive marketing group, but it isn't a separate business unit.

These airlines "recognize that e-commerce operates at a different speed and a different culture ... with its own distinct technology needs and challenges," said Henry Harteveldt, an analyst at Forrester Research Inc. in Cambridge, Mass.

United's new Web site lets customers research fares and schedules, check flight information and access Mileage Plus account information directly from the home page. The number of mouse clicks required to accomplish most tasks has been reduced from eight to six, said Rick Collins, director of Internet marketing.

United also introduced a free paging service that informs customers of flight delays, cancellations and gate information via e-mail.

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