Is The New United CEO Up To The Task Of Fixing The Airline?

“The flight today was actually quite nice,”

“No problems at all, in fact — not something I was expecting from United.”

Those quotes aren’t from me, but they easily could have been.  That’s customer Debashis Sengupta as he got off a recent United flight, as quoted in this NPR article by David Schaper.

David does a good job illustrating how far behind their competitors United finds themselves in certain areas, citing recent customer service studies where United does poorly.  They also suffer from a lack of timely arrivals for their flights right now.

But, the element I think that the new CEO, Oscar Munoz, will find toughest to fix is employee performance:

“United lost my trust a couple of years ago and continues to reinforce the reasons I book away from them,” Pizzarello says. “I really don’t think it can get worse. They’ve got operational reliability issues, they’ve got customer service issues, and their employees aren’t very happy about what they do.”

If they fix the employee morale issues, I do think they create a domino effect for improvements in other areas.  For years, I’ve flown older MD-80s with American Airlines, lacking updated seat power, video screens, etc.  But, the crews are for the most part exceedingly good at taking care of you in-flight (the food is a damn sight better, too).  In the end, passengers want to get to their destination on-time, relatively comfortable, and to a lesser degree, made to feel like they’re appreciated.  This is another area where United has failed for quite some time:

“It would take a sea change from their competitors for me to shift a sizable chunk of business back to them,” Pizzarello writes on his blog. “United has ingrained in me that I am a transaction, as valuable as the fare I buy on any given day, and nothing more (and on some days, much less). You can only whip the horse for so long before it doesn’t respond.”

So, where do they go from here?  Munoz has embarked on a trip across the country to visit with employees in all sorts of jobs.  If he can genuinely connect with employees, I think this is a great first step.  There might not be a better one.  With Smisek, the previous CEO, being shown the door in a fairly public fashion, it gives Munoz a great chance to blame the current sins on his predecessor and push forward with a fresh message.

Munoz has put out some promising letters to staff and customers, but it will take time to see if he can deliver better results.  In this example, better results doesn’t mean bigger profits, per se.  It’s a return to excellence that the airline can rely on when planes aren’t full and the price of fuel goes up.

One of those recent efforts was brought to my attention by Seth at Wandering Aramean.  He reported on the new website they’ve launched for Munoz to receive and answer questions from customers.


To be honest, I clicked on the link to the new site before reading Seth’s post.  And, one of the first things I noticed was that one of the questions was obviously answered by someone other than Munoz:

United’s new CEO, Oscar Munoz, has made it a priority to meet personally with employees at all levels…..

That’s great, and I do believe him.  But, he also makes it pretty clear he’ll be the one answering the questions on this site, something obviously not done here.  It’s a small thing, and I’m sure they’ll get the spin right shortly.  I then went back to read Seth’s post in more detail and he clearly picked up on all these points, mixing in a bit of Bill Murray humor with his assessment.

It’s a long road for Munoz and United.  Customers won’t be won back (or chased away) because of this new site, or likely any answers that come up on it.

It’ll come down to Debashis Sengupta’s recent experience.  An on-time flight.  With no problems.  Lots of them.

10 Comments

  1. Talk is cheap, all hat no cattle thing. True, he needs to get out in the field and air to see what an utter shambles his airline is. But action and substance is what I’m waiting to see. Meanwhile the Munoz Doctrine (pun intended) is pure unclever, see-through B.S. theatrics for investors to swallow. Look, this guy is no Bob Crandall. Customer service is at the bottom and it could only improve, if even providing a darn toothpick in economy. Seriously, American legacy carriers are at near the bottom of the heap when ranked among developed world airliners. Well traveled Americans know this from their overseas experiences the difference. How many Americans have I encountered on business trips who told me that even their companies let their employees fly foreign carriers Asia-Europe and the employees are glad for it. Just a pathetic situation that the legacy CEOs know, but choose for sundry reasons not to address.

    1. Steve, I’m not ready to throw the baby out with the bath water just yet. Understand why you’re skeptical. I am as well. But, I’m willing to give the new management a chance to succeed.

  2. My dollars and points are valuable. Too much so to chance on poor customer service. While I hold complementary United Gold due to my Marriott Platinum Premier status, I choose to continue to fly Delta or American. I won’t earn many miles but I get there on time and with some degree of comfort. When I travel with my wife domestically, I fly Southwest using a companion pass. You pay your dues here and save your points and miles for Asian or European First and Business where you can. I’ve been burnt too many times by poor service so I vote with my wallet. Even if it’s an award wallet.

    1. John, I certainly understand your philosophy. I wish I had some level of status locked up with United automatically, but I’m not willing to spend that many nights in a Marriott. 🙂

      2 years ago I was 1K. I’m platinum this year and struggling to finish off Gold for next year. I’m heading in the same direction as you, giving United less business until they can prove I should be sending more business their way. But, I’ll continue to redeem miles for awards!

  3. I’m United GS and fly A LOT. I’m not a fanboy – I fly United because I’m captive to it. (They are the major dominant carrier at my hub. And I can get almost anywhere on a single, direct flight if I choose United and Star Alliance.) I believe Oscar.

    I believe it is SIMPLE to understand the major fundamental issues United has. Only a complete ostrich would not “get it” – which was SMI/J’s biggest failure as a CEO. These are NOT hard issues to fix if you, the CEO, and your staff are committed to fixing them. Since there is no reason not to fix them, and plenty of incentives to fix them, I believe Oscar when he says he’ll fix the issues.

    1. David, you are TOTALLY a fanboy. 🙂

      That being said, I do think Oscar can succeed. I still think it’s too early to handicap his chances of success. There are serious issues right now, and they could get worse before they get better. It wouldn’t surprise me if they moved out a bit more of upper management and brought in some more fresh blood. It may be necessary to forge better relationships with middle management and the front-line staff.

  4. Well and good that Munoz is checking out his territory – but he is no new boy, he had been at United long enough to know what a terrible product it delivers. So he does not deserve any kind of ‘honeymoon’ period – there are plenty of small and large problems that he could fix RIGHT NOW, if he wanted to.

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