Table of Contents
- Defining the Problem
- Causes of the Problem
Defining the Problem
Beginning in 2010, at the apex of United Airlines’ merger with the financially-troubled Continental Airlines, United saw its performance and satisfaction ratings plummet. Any airline is sure to have a few horror stories regarding how their customers were treated but it appears as though United could no longer quantify these types of complaints as “few”. The mistreatment of customers and employees alike has led to several class-action lawsuits, resulting in $2. 8 million in fines and settlements for the airline. To add insult to injury, 43% of all complaints against US-based airlines were against United. United has consistently been ranked at or near the bottom in most customer satisfaction surveys regarding air travel in and through the United States.
Employees became demoralized and unmotivated due to what they see as unfair treatment and unnecessary cost-cutting measures by management. Complaints from employees range from the quality of new uniforms to the unrealistic hours expected of remaining employees once others had left for other ventures or were assimilated into competing airlines. United has also had difficulty signing long-term contracts with pilots, mechanics, and other positions that ensure the smooth operation of an airline. The problem with employees of the airline became so bad that even travelers could easily personify them as great people but ones who do not have any faith in their employer because they do not believe their opinion has any weight on executive decisions.
Causes of the Problem
Many of the issues that plagued United in the turn of the decade revolved around the massive undertaking in their attempt to merge with the fledgling Continental Airlines. Because of the many other mergers occurring around the same time – Delta and Northwest, American and U. S. Air, Southwest and AirTran – there were grave concerns that the merger of United and Continental would allot too much of the US air travel market share to one business entity. Due to this, the Department of Justice and the Securities and Exchange Commission began a long and expensive process to attempt to block or limit market share of the proposed new business entity. United had to put up large sums of money just to get the merger approved, which only intensified the austerity measures that soon followed. To cut costs, United decided to initiate massive layoffs and eventually contracted with third-party vendors to provide services the airline themselves would normally be responsible for.
The trouble did not stop there. When Continental and United’s vastly-dissimilar databases of flight and passenger data were merged, the results were catastrophic. At its zenith, a computer glitch effectively shut United down across the globe. A merging of the pilot-scheduling software did not fare well either – dead and retired pilots were assigned flights. This led to further delays and customer dissatisfaction with the airline. Deprioritization of adhering to scheduled departure and arrival times also contributed to the decline of on-time performance of the airline.
Last, corrupt business practices came back to haunt the now-merged troubled airline. United’s previous CEO, Jeff Smisek, was discovered to have entered into secret arrangements with the head of the Port Authority of NY and NJ to allow them millions of dollars in funds to renovate gates and terminals frequented by the airline. In return, United created a non-revenue generating route from Newark to Columbia just so David Samson could have quick access to his summer home in South Carolina. The route’s only scheduled departure time was set for weekends – a time when United could have otherwise been operating revenue-generating flights to destinations customers actually wanted to travel to. When he was eventually replaced by Oscar Munoz, many of the executives were gone and his previous decisions were upturned.
The biggest catalyst to United’s negative image in the minds of travelers stems from poor management which then trickled down to their employees and then their customers, getting progressively worse as the chain continued. Therefore, the following recommendations are suggested to mediate any damage and attempt to restore United to its former glory where passengers could fly the friendly skies.
- Create an internal affairs branch within the airline. This department would be responsible for oversight into management’s practices to prevent any unethical or potentially damaging actions from being taken against the airline’s image.
- Re-train all employees on business ethics and morals to ensure the image is clear of what United as a company expects and will portray not only internally but externally to customers as well.
- Analyze the current flight-scheduling plan of “straight line” to one of “hub and spoke”, similar to Southwest Airlines, within the United States. Outside of the US, analyze well-performing industry leaders such as Lufthansa and emulate their global strategy to make flights profitable once more.
- Similar to how businesses advertise “under new management”, undertake a massive P. R. campaign to show the public that United is not the airline of yesteryear. This would be reliant on the contention that no other major P. R. nightmares occur during the campaign.
- Introduce an employee reward program. Employees who are not motivated will not deliver the image of the airline expected of management. Since end-user employees are the public face of the airline, ensuring they are happy will, in turn, ensure that customers are equally appreciated.
- Invest in updating the airline’s current fleet to bring it in line with other competitors. Older airplanes are less efficient and can be leased to smaller airlines, similar to how Southwest leases their Boeing 717s from the AirTran merger to Delta, who still utilizes the variant. Boeing’s new MAX line of 737s and the NG 777 and 787 models deliver efficiency that far outpaces that of United’s current fleet.
- Set up a hotline to a third-party company for customer complaints. When customers complain to a business, they oftentimes do not believe anything will be done with the information provided. Having a neutral third-party would enhance the likelihood that customer complaints will be resolved to much greater satisfaction than before.
- Increase social media presence. All other major US carriers are very prevalent online through means like Twitter, Instagram, and Facebook. Offering support and other assistance via online means may attract younger customers to the relatively-old airline amongst its peers.