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United Airlines designed the Shuttle by United to compete in the short-haul air service market. Up to mid-1994, United had been steadily losing market share in the short-haul markets to new carriers with lower costs. It seized an opportunity created by an employee buyout through an employee stock ownership plan (ESOP) to reestablish itself as a competitor in those markets. Using a combination of market research, employee teams, and process analysis, United reduced its costs by 30 percent, increased plane utilization, and cut turnaround time in half from its existing air service. Its efforts have resulted in higher customer satisfaction, improved market share, reduced costs, and increased profitability.


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© INFORMS. Final version published as: Kimes, S. E., & Young, F. S. (1997). The shuttle by United. Interfaces, 27(3), 1-13. doi: 10.1287/inte.27.3.1
Reprinted with permission. All rights reserved.