Who's the 'ugly girl' in the airline business?

Continental Airlines CEO Jeff Smisek, on the job only a few months, is turning out to be full of quips meant to be humorous or sarcastic that not everyone thinks are funny. Last month, he called the new federal tarmac-delay rules "stupid," without making it clear that it was a six-hour stranding of passengers on a Continental Express flight last summer that contributed significantly to the rules being adopted.

On Monday, Smisek called US Airways the "ugly girl" in United's courtship of a merger partner, won by the "pretty girl," Continetal. He apologized to US Airways CEO Doug Parker, as reported in this AP story. Parker issued a long message to his employees, many of whom, he said, had sent him messages about the insult. The statement was also sent to the media but I don't find it on the US Airways Web site, so here are some relevant portions:

"In fact, we are performing better than Continental on almost all of the important metrics of our business. Financially, we each reported first quarter financial results in the past two weeks, and while we both lost money, we both lost much less than last year. However, US Airways' rate of improvement was much better than Continental's driven by both higher revenue growth and better cost control. On an absolute basis, our profit margins are now higher than Continental's.

"Operationally, we're performing much better than Continental in the primary customer service metric of on-time performance. US Airways jets arrived on-time more often than Continental's during the first quarter 2010, and we also outperformed them in on-time during all of 2009 and 2008. We are also now neck and neck with Continental in areas like baggage and complaints. This is all being noticed by the outside world, as US Airways stock price is up 42 percent so far this year, while Continental's is up 15 percent, even after announcing their merger.

"Bottom line, I think both of our airlines are doing a great job in a challenging business – but if I were them I wouldn't be pointing fingers."

Parker did add that Continental has a stronger route network than US Airways, with hubs in larger cities and more extensive overseas networks. And that does make Continental prettier in important ways.