Be predictable - Be gracious - Be the solution - Be the Brand .....Part 1

United calls these four directives their "Service Principles."  For the last year or so, when United employees log in to the company's intranet, they have been greeted with this message.  The intent of the message is not only to motivate United's employees to do their best, but it is also intended to unify them and get them to rally around a common idea.  That idea being the "Brand" that is United Airlines.

All big corporations have their catch phrases and jargon that is put out there to encourage and inspire.  Young MBA's coming out of their A-school programs land jobs in the executive office or with a consulting firm; and leap over those on the front line with the customers. While in school they have read, discussed and come up with their own theories from numerous case studies of actual missteps made by major corporations.  At the same time, you have academics shaping those young minds with their own theories of what should have happened, even though many of these academics would not last a month in the corporate world.  This is where concepts such as "Service Principles," as well catch phrases and jargon are bred.  

Some of the missteps studied include the introduction of a new product to replace something that was tried and true (new Coke); leveraged buyouts and how they overvalued companies at the expense of shareholders and employees (KKR and Nabisco); and one that I studied, how the delay in upgrading computer reservation systems was critical to the demise of a highly respected and profitable airline (the original Frontier).  I suspect that if they are not already being written, in a few years business schools are going to be studying the merger of United and Continental and the mistakes made in trying to unify two disparate corporate cultures.  

I suspect there is some highly paid MBA, most likely a consultant, who came up with these four service principles for United Airlines.  Had he or she spent any time on the front line beforehand, they would have realized that the dedicated employees at both United and Continental had already embraced these service principles on their own from the very first day they reported for duty.   The suits in the Willis Tower need to show they too are contributing to ensure the success of this airline, and that is why you see crap like this coming down to the line.  Yet some hard working flight attendant, who did not get any sleep the night before in their glamorous layover hotel near the airport, is supposed to check-in for what could end up being a 13 or 14 hour duty day, read these service principles, and then all is right with the world.  This merger has cost hundreds of millions of dollars more than originally projected, much of that cost coming from overpriced consultants with ivy league MBA's and PhD's; all of whom are so arrogant to think they know for certain that their solution is the right solution.  Buried in this is probably a cost that ran at least seven figures for someone to come up with these four service principles.

Like a lot of corporate jargon and feel good catch phrases that get pushed down the line from management - many of United's front line employees just think of the four service principles as a load of bullsh*t. It is obvious they are not being embraced sincerely.   Here is the proof - since the merger was completed five years ago, United has consistently placed last or near last in many national customer service surveys (e.g. J.D. Power).  Add to that the number of complaints registered with the DOT by passengers in just 2014 alone, where United was second only to Skywest.  Ironically, Skywest is United's largest Express partner.   

Further evidence that confirms that the service principles have not been working are the significant changes in how United Airlines has been operating in the last few months. There are hints of some of the old United Airlines coming back, although much of it is too little and too late to woo back many premium customers who have already defected to other carriers.  To make my point here it is best to compare what what was happening a year ago, the mistakes that were made to that point, and then look at what is happening today.

Summer of 2014
As you know, most of the senior management ranks at United are made up of those who came from Continental Airlines, and they all brought with them an attitude that they were certain that what had worked at Continental was going to work for what was now the world's largest airline.  Starting in 2010 through to the summer of 2014, United's new management implemented changes that they certain would make this airline better then the rest.  This is a picture of where United was a year ago:

• With delivery of the new ERJ-175 jets, for which United committed hundreds of millions of dollars, many domestic routes were being switched to United Express carriers, and stations in mid-sized cities became entirely outsourced. Long-time United and Continental employees either had to transfer out of those stations, accept lower paying positions with the Express partner, or retire.  These new jets were also being put into service on flights between hubs, such as Denver to Washington-Dulles, replacing mainline service, taking away jobs from mainline Pilots, Flight Attendants, Mechanics, etc..
• 757's were being retired or put into service on shorter Atlantic routes, and then replaced by the newer 737-900's.  Most legacy United flights to the Hawaiian islands were now flying pmCO 737-700 or 737-800's because they used less fuel, and pmCO crews could be scheduled for longer duty days and work more turns rather than having to layover.    
• Expensive and heavy In-flight entertainment systems were being pulled off and far cheaper broadband internet wi-fi installed so that customers could use their own devices to stream movies and TV shows.  This became known as BYOD, or bring your own device, flying. 
• A new thin-line economy seat was introduced that would reduce weight and allow for an extra row or two on the planes.  Passenger comfort was not a concern.    
• There were very few wide body aircraft on domestic flights, all of these planes had been repositioned to be put into service solely on international routes.  The new 787 was flying, but it had been grounded for awhile because of the battery problem, and Boeing was still experiencing delivery delays.  The 787's being delivered were planes that had been ordered by Continental and are configured with only two classes of service.  These did not fit with United's, 3-cabin, International Premium Travel Experience product that long-time United customers were accustomed to.
• Across the system food service was being cut.  Meals were only going to be served on flights over two hours.  There would be no meal service on the United Express flights.
• Bag fees were increasing, and United was adding everything in that was possible that could be purchased for an an extra charge.  You no longer had to be a frequent flyer to have "Premier Access," you could buy that for a nominal charge.  Long-time loyal premium flyers were being pushed aside.

All of this was done so that each and every flight segment was profitable.  That was the Continental way of doing things.  

Something happened with all these changes though - the customers were not embracing them, and there were operational glitches that led to costly delays and even more customer service problems -

• Global Services and other premium frequent flyers in those mid-sized cities that were now outsourced took their business to American and Delta.  Why endure a long-trip across the Atlantic in a cramped narrow-body 757 only to be crammed into a smaller regional jet for another 3 to 4 hour flight from IAD, ORD or EWR to their home airport.  
• The wi-fi roll-out was a clusterf**k and for most of last year many domestic flights flew "dark," being without wi-fi or any inflight entertainment system.  If you did not bring your own already downloaded entertainment or a good book, trans-continental flights got pretty long.  Another problem is that management did not see the need to install additional power outlets on these planes, even in the First class seats. Customers now have make sure they are "charged-up" before getting on one of these flights.   Even so, the charge is not going to hold on a five hour trans-continental flight.
• Any problems with headwinds and the trans-Atlantic 757 flights had to stop for refueling causing delays.  The same for the 737's now flying to Hawaii.  Flights from LAX to Hawaii were being diverted to SFO to top off the fuel before heading out over the Pacific.
• The new generation 737's with their longer fuselage and being closer to the ground require longer runways for takeoffs.  Where a 757 may be able to take off at 140 knots, a 737-900 requires 180 knots before being able to lift off.  United won a coveted transcontinental route from San Francisco to Reagan National Airport in Washington.  Other than the 757, the only other planes United can use are the A-320 and A-319, plus the smaller, cramped older 737-700 or 737-800.  I think United chose to use the older 737's because they can schedule the pmCO flight attendants to work the return flight the same day rather than having to pay a crew to layover.  These older 737's have have fewer seats to sell, and transcontinental routes to DCA are premium and business flyers will pay the higher fare for the convenience of landing at this airport closer in to Washington, D.C.  I don't think the cost savings exceeds the lost potential revenue had the 757 been put into service on this flight, and now there are not enough 757's available.  Some of the Hawaiian island airports previously served with 757's and 767's are also not able to accommodate the 737-900.  
• Premium frequent flyers are defecting at far greater rates than anyone could have expected. Loyalty no longer mattered - status could be purchased for a price.  This is all evidenced by the losses in market share in cities where United faces competition.  

Summer of 2015

This summer there is a much different picture at United; however, it does not mean that flying United is a better experience.  It is just interesting to watch how schizophrenic this management seems to be as they make change after change after change.  Most notable of these changes is the reintroduction of mainline flights to many domestic mid-size cities.  United's premium customers were put off by the down gauging of service and they defected to Delta and American who still had or increased mainline service either to their home airport or destination cities.  Looking at market share statistics for 2014, it actually looks like Delta increased their mainline flying to accommodate the customers that were defecting from United.  In addition, the regional carriers are notoriously bad when handling irregular operations.  The bad winter of early 2014 is a good example - United lost hundreds of millions of dollars because of canceled flights, the majority of them being on Express carriers.  

But to show that this short-sighted management can't get their eye off of every nickel, even though mainline jets are back in many cities, staffing at those stations is still outsourced.  I don't think these agents have been trained in the four service principles - case in point being my most recent experience in Albuquerque a few weeks ago.  I don't think it can be called First Class service when the agent working that line suddenly walks away leaving premium customers to wonder how they can get checked in and their bags checked.

United has also committed a lot to upgrading the United Clubs.  They are a big profit center now where anyone can buy a day pass.  Membership is no longer limited or exclusive to those willing to commit to a full year, and another reason why they can no longer call it a "Red Carpet Club."  Some of the upgrades are nice and long overdue.  With new furnishings, there is not much fighting over an electrical outlet to charge up your device so that it will last long enough for a movie on the next flight. On the down side, they are testing new food offerings in some clubs which are kind of a joke.  I am not sure what was wrong with what they had before - long time members were not expecting a meal when they went into the club, but I suspect the single day users want a lot for their $50.  So the new offerings include hot soup - even in the summer - which languishes all day in a tureen, hummus that is uncovered and left under hot lights, pita chips, "artisan" breads that are at least a day old, olives (which I am highly allergic to) left uncovered under hot lights, salami left uncovered, chunks of cheese on a wood cutting board uncovered under hot lights, and disgusting hard brownie chips (they taste like something you would scrape off of the pan from a burnt batch of brownies).  Gone are the sanitary individually wrapped cheeses, fresh crudite, little packages of fresh carrots, and fresh cookies.  Again, some highly paid bozo came up with something that would appear as an upgrade, but is really kind of a mess and appears more difficult to maintain.  Why do they keep trying to fix things that were not broken?
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While United began cutting back on service, the competition stepped things up, and premium customers began defecting at a rate that this management did not expect. This is all evidenced by the loss of market share across the board, and most critically, United's long held dominance across the Pacific is eroding.  What is apparent about this "Continental" management is that they do not know how to compete.  Case in point, the pulling out of JFK.  Granted, United only has service to and from LAX and San Francisco, but they were the first to come up with Premium Service flights, and for a time, well-heeled bi-coastal frequent fliers were left with a feeling that flying United's Premium Service was something special.  Slowly, the niceties on these flights were taken away, and then the down gauging from three cabin to two cabin service.  Seats that went for $6,000 round-trip were taken out - saving a nickel only to lose a hundred dollars.  Those who flew United P.S. flights for prestige are now flying American or Delta, both of whom upgraded service on these routes.  I don't think Mr. Smisek and his buddies do not fully understand what it means to "Be the Brand"  and thus they themselves are not embracing all of the service principles that they push on to their front line.  Mr. Smisek, if you want to cut costs and make this airline run better, do some house cleaning there in the Willis Tower first.  In the safety videos you keep talking about making United a world class airline, well to do so, you have to know how to compete, not know how to run away from a challenge.

There is so much more that I want to write about, but time is limited and you are probably already bored at this point.  I just do not have the desire to fly like I used to, but I do stay loyal to United Airlines.  I hear that I can get a better experience for my dollars at other carriers, but it is nice to see my friends, who through all of this, show up and, like they have been doing since the first day they started at United - thank me for flying the Friendly Skies