Thursday, September 17, 2015

United Airlines' new CEO speaks out ... but says nothing

As you likely know by now, United Airlines CEO Jeff Smisek resigned amid a brewing scandal in early September and the airline replaced him with United Board member Oscar Munoz. On Sept. 15, Munoz sent an email to United customers to introduce himself and to outline his plans for the airline, though the "plans" he articulated were long on generalities and extremely short on specifics.

Here’s the message, and my responses to some of the points Mr. Munoz raises.

Dear Carl,

I was recently named the president and CEO of United [Airlines, (NYSE:UAL)] and would like to take a few moments of your time to introduce myself to you, our valued customer.

Oscar Munoz
Photo provided by United Airlines
I am excited about the incredible opportunity that the United team has to improve the travel experience essential to the vitality of global business and to the personal lives of millions of people. (Along with most other U.S. carriers, United has let things slip so far that there’s nowhere to go but up.) I want us to be your first choice for every trip you take, and we will put in the work needed to get there.

This goal can be achieved by delivering on three things that I believe are critical to any successful business.


First, we must focus on our customers. (Indeed, customers are the lifeblood of any business. Either it treats them well and it prospers, or it treats them poorly and it perishes.) Getting you to your destination, on schedule, can make or break your ability to succeed in a work endeavor or to hug a family member at an important moment. (Getting your customers to their destinations on time is important, but it is also important to treat them as though they are valued guests, not hostages. It is also important to get them there without the fatigue and resultant sub-optimal performance that come from being crammed into an aluminum tube like sardines in a can.)  If our performance has not met your expectations, I want you to know I'm committed to learning how to better meet your needs and desires. (Mr. Munoz, if you truly mean that I will fly to Chicago at my own expense if you will meet with me in person so that I can share some much-needed “voice of the customer.” Alternatively, have your senior leaders listen to -- and without disclosing who they work for, join in on -- conversations about air travel at virtually any bar at any decent business hotel in the country. Listen -- really listen -- to what those people have to say; you could learn a great deal.)

Second, it's all about teamwork. To get you where you want to go safely and happily requires thousands of us working together with a shared purpose. (That is true, but has not manifested itself well in the recent past with United. I hope you are able to instill a sense of teamwork and shared purpose across your organization; it is sorely needed.)

Third, this is a company and an industry that demands innovation. We are embracing the changes, and will continue to innovate with the goal of providing our customers better performance, service and products. (Here’s an innovation the entire U.S. airline industry should be embracing: Put the customer first, as you said in your first point. They are the reason you’re in business. Shareholders' demand should come second, though they will certainly reap the rewards if you treat your customers well and make them want to fly you again.) Above all, our passion for the safety of our customers and our people will be at the core of everything we do. (Agreed. I am a 3,500-hour pilot who knows first-hand that safety must be first and foremost. That said, United has taken some highly questionable actions using the umbrella excuse of “safety" including throwing a family off a flight for complaining about the choice to show the explicit, violent movie “Alex Brown” on screens the whole cabin – including kids – could see. Or throwing a blogger off an international flight for taking a picture of the in-seat display, with a flight attendant claiming in-flight photography is a violation of FAA regulations, even though it is not.)   

My co-workers and I will work each and every day to earn your loyalty by holding true to these principles. We can do better, and will keep listening to our customers to become the top-performing airline. My goal is for you to be as proud to fly United as I am to lead United.

Thank you for flying United.

Oscar Munoz
President and CEO, United Airlines

Here is my response:

Dear Mr. Munoz.

Congratulations on your ascension to role of CEO. I am certain you wish the circumstances were different but we all play the hand we are dealt.

You, sir, have a tough row to hoe.

For a very long time, United has been talking a good game but failing to meet what it promised. I sincerely hope that you are able to turn that around.

Here’s what we, the traveling public, want from our airlines:
United 737 departs SEA
  • Employees who genuinely understand customer service. Those range from ticket agents to flight crew members. They need to understand this pivotal message, which is twist on a slogan once used by competing airline American (NYSE:AAL): “We are why you fly!” Creating the atmosphere of teamwork you mentioned would go a long way.
  • Accept responsibility for your actions and choices. Those of us who travel frequently understand that things happen. Baggage is misdirected, flights are delayed or cancelled because of circumstances beyond anyone’s control, etc. But there are also time when airlines or their contractors screw up. In cases like these, including the incident that spawned the now-famous video United Breaks Guitars, United would do well to heed the simple advice of a CEO to whom I once reported: Admit it, fix it, and move on. To that point, don't shoot the messenger and stop trying to shut down Untied.com. Instead, look at and understand the criticisms leveled, then work to correct those that are valid (and there are many).
  • Give passengers more, not less, for our money. That includes more space. According to SeatGuru.com, United’s Airbus jets have 30 inches of pitch in coach while some of its Boeing (NYSE:BA) aircraft offer up to 31 inches. While 31 inches of pitch is common across the industry, if you really want to set United apart, be a leader and not a follower by giving us more. It is not unprecedented. Virgin America’s Airbus jets offer 32 inches of legroom, while Jet Blue (NYSE:JBLU) offers 33 or 34 inches of pitch in standard economy. Seats on those other carriers are generally one-half inch wider that the seats on your planes, which makes a big difference on longer flights. 
  • “More for our money” extends to other United products and services. For example, when United Club members lost access to approximately 35 percent of airport lounges because of the merger of US Airways with American, United did nothing to compensate club members for the reduced value of their membership and, what’s more, was unapologetic about it. Read the comment from one of my readers at the end of the article for another passenger's view. Then in August, United further eroded the value of a United Club membership by restricting the use of club memberships, for which members pay handsomely, to those days when the member is actually flying on a United flight. [Editor's note: United has since amended its position and will now grant access to United Club members who are flying on the day they seek admission, regardless of the airline.]
  • Stop nickel and diming passengers. Knowing where to draw the line on the practice of รก la carte pricing can be difficult but conduct some focus groups of your customers, or bring it up in those anonymous conversations at the bars in business hotels I mentioned earlier. Sure, charging for food and beverage makes sense because there are so many options available. Charging for EconomyPlus seating makes sense, too, as does charging for use of in-flight WiFi and on-demand movies. But charging for other things, like checked bags, is just irritating to most of us. 
Once you have staunched the bleeding of the current crisis, these should be among the new direction you set as the new CEO. Then -- and this is vital -- follow through.

Welcome to the hot seat, Mr. Munoz.

Visit my main page at TheTravelPro.us for more news, reviews, and personal observations on the world of upmarket travel.



Photos by Carl Dombek unless otherwise noted
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