Dear Readers -
Below is a letter that went out to Mr. Munoz today. I hope to see many of you at the Shareholders Meeting on Wednesday! Have a good weekend...
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June 3, 2016 **
Via Fedex Overnight **
Mr. Oscar Munoz, President
United Continental Holdings, Inc.
233 South Wacker Drive
Chicago, Illinois
60606
RE: Polaris ® is nice,
but….
Dear Mr. Munoz:
This letter is long overdue in going out to
you. The first order of business is to
thank you for stepping up to take over for Mr. Smisek after his
resignation. The last nine months have
obviously been stressful for you, and despite your health setback, you have
remained committed to your vision for United Airlines. You are to be admired and respected for
making such a commitment, and sticking to it at a time when I am sure you were
being advised to take more time off to recover and not risk your health.
When you took over for Mr. Smisek in September of
2015, the first thing you did was to publicly acknowledge to your employees and
customers that mistakes had been made by management ever since the merger
between United and Continental was completed in 2010. Unfortunately, five years of those mistakes
have led to a pretty sizable defection of premium customers to the competition,
and a very noticeable decline in employee morale. You do not know how long and hard I have been
trying to get the attention of management and the United Continental Board of
Directors that those mistakes were being made.
No one seemed to listen as I was saying that the merger was not going as
smoothly as Mr. Smisek and his team would have wanted us to believe.
By way of introduction and so that you know where I
am coming from, I am a long-time loyal premium customer as well as a
shareholder. From the late 1990’s until
the merger in 2010, I held either 1K or Premier Executive Status in the Mileage
Plus program and I spent an average of $xx,xxx per year on travel for just
myself through the Pass Plus program. Since
September 11, 2002 I have flown on United every September 11 to show my support
for the front-line employees that still mourn the loss of their flying partners
on that awful day. When the airline
entered bankruptcy, I started to hand out Starbucks gift cards to employees I
encountered, because I want them to know that the customers do see how hard
they work and the sacrifices they have made to keep United flying. In 2006,
employees and managers for United Airlines at LAX named me their “Customer of
the Year.” I remain humbled by that
honor because it is I who admires their dedication and pride in making sure the
customers know how uniquely special it is to fly the Friendly Skies.
Under Mr. Smisek’s leadership, United Airlines lost
sight of customers such as myself and I no longer looked forward to my trips. I am now down to only 4 trips per year, and spend
less than one-fifth of the amount I used to spend every year. I still pay for First Class seats, but the
United First product is disappointing and I always seem to regret my decision
to spend so much. Boarding lanes at the
gates, like horses being lined up at the paddock, are degrading; and now anyone
with $50 can buy Premier Silver status or access to the United Clubs. I long for the days when status had to be
earned and the Red Carpet Clubs were a haven for weary road warriors. Despite the disappointing changes, what I still
look forward to is my interaction with the employees when I travel. It is because of them that I have remained
loyal to United.
Yesterday’s unveiling of Polaris ® was
exciting news. As a customer, I look
forward to the chance to try it out, and as a shareholder I hope it is what
will do the trick in bringing back premium flyers lost to the competition. However, as a shareholder I am concerned by
how long it is going to take for customers to actually experience Polaris ® and the
lack of news about what improvements are going to be made now to win customers
back. Most lacking is any news about substantive
improvements to the domestic product, especially trans-continental flying which
is important to me. I do hope you will
let shareholders in on the cost of the Polaris ® rollout at the Annual Meeting on Wednesday (June 8,
2016).
With the announcement yesterday, I had a sense of déjà
vu as I recalled Glenn Tilton’s enthusiasm over the $350 million commitment to
the “International Premium Travel Experience (IPTE).” Like with Polaris ®, the new
seats were to be industry leading and premium customers would see improvements
in meal service and amenities. The IPTE
conversion for the wide-body jets started in the fall of 2007, and Mr. Tilton
made this product the centerpiece of his presentation at the Annual Meeting in
2008. At that meeting I questioned Mr.
Tilton on the wisdom of committing so much to this product while he and the
Board were failing to address their promise to return so much of what was given
up by the employees as it struggled through bankruptcy. I will paraphrase what I said to Mr. Tilton
at that meeting when I say “Polaris ® is nice, but I do not think it is going to put
smiles on the employees’ faces.” It was not
until 2011 that the IPTE rollout was completed, and Continental management felt
that it was something that was not going to fit in for their vision of the
airline and IPTE was forgotten.
So much of the success of Polaris ® is going
to be dependent on the experience that is delivered by the Flight Attendants;
therefore, I think it is critical that you make it a priority to come to an
agreement for a joint contract for the Flight Attendants. Flight attendants from the three operating
groups, pmUA, pmCO, and pmCMI, have all had to endure too many negative changes
over the last six years. There have been
furloughs and then recalls, forced cross-overs, loss of seniority, more
inefficient dead-heading, non-responsive crew and hotel desks, sub-standard
layover hotels, and I could go on with more.
Mr. Munoz, if you want to be an industry-leading
airline, you now have your chance by accepting an industry-leading contract for
the Flight Attendants immediately. If
you want to deliver a premium experience, you need Flight Attendants that are
rested, well-trained and not held back by managers that can only look at cutting
costs and how big their profit sharing check will be. You need to back the effort that calls for
minimum 10-hour rest periods for the industry, and you have to give your Flight
Attendants the choice to say that a 13-hour or more duty day is too long. They also need quality uniforms that are well-designed,
flattering, and convey a premium image. Senior Flight Attendants need to be
honored for the years they have put in, and Junior Flight Attendants need more
respect when it comes to scheduling.
They also need more mentoring by supervisors once they start flying. I cannot think of a better way of showing
your commitment to winning back the customers by announcing that United Flight
Attendants will have a contract that bests the competitors and once again makes
these hard-working professionals proud to be a part of the Friendly Skies.
I will be there at the Shareholders Meeting on Wednesday
and I hope there is a chance for us to meet in person. Thank you, once again, for acknowledging that
management had made mistakes and that there was a lot to make up for with
employees and customers. It was
encouraging for me to hear someone at your level agree with what I had been saying
ever since the merger was completed. I
just caution you not to lose sight of what you first set out to do. There are a lot of improvements that can be
made now to win back customers and accelerate United’s ascent to the top. Keep focusing on your front-line employees;
and beyond that bring back the red, white and blue United tulip; refer to the
planes as Friendships and Proud Birds, and serve Starbucks coffee. I think you would be surprised how far those
little steps will take you. Thank you
for your time and attention to this long letter, it is sincerely appreciated.
Kind Regards,
James (Jim) Anderson
Mileage Plus #HVC21479
