United Airlines' makeover aims to refresh and renew

United's fleet has shrunk from a peak of 601 mainline jets in 2000 to 386 this summer. It ranks a distant fourth in passengers boarded, behind Delta, Southwest and American. It remains competitive internationally largely because it participates in Star, a global alliance in which it shares bookings with other carriers.

That's a comedown for an airline that during the first 20 years of the jet age was the biggest and most highly regarded.

United entered the era of airline deregulation in 1979 atop the heap. But it bounced from one strategy to another to try to adapt to the aggressive, price-driven competitive environment. It's had nine different CEOs since then, several corporate restructurings, two painful strikes and several near-miss merger efforts. United even sold itself to its employees in a deal that for five years in the late 1990s made it the largest worker-owned company in the world.

To survive after the 9/11 terrorist attacks, the Chapter 11 reorganization, the expansion of low-cost carriers, and threats of communicable diseases such as SARS and now swine flu, it has shrunk. Last year, it flew 13.3% fewer passenger miles than it did at its peak in 2000.

United, Tilton says, has learned from what it's done wrong.

"There were many different approaches," Tilton says of the many strategy shifts. "But we know one fundamental thing: Without solid, competitive core propositions — operating excellence, customer satisfaction — you don't have a foundation upon which to build."

Broken guitars don't help

Nothing points up the tough job United has in remaking itself like the long-held perception that it delivers inferior service.

Chuck Loring, a 100,000-miles-a-year frequent flier from South Florida, shares that perception. He says he was an elite member of United's Mileage Plus until "several years ago when service in Chicago got so bad."

"Not only did you miss every connection," he says, "but the employees were one cranky group of people after repeated layoffs and salary reductions."

Loring, a partner in a firm that advises not-for-profit organizations, says that when he stopped flying United, he didn't hear a word from the company.

"Not one," he says. "Isn't it interesting, you can go from 100,000 miles a year to zero and no one even notices?"

It's complaints like Loring's that have put United among the bottom of U.S. airlines in customer-satisfaction rankings in the 15 years that researchers at the University of Michigan's Ross School of Business have been surveying customers' opinions. In this year's survey, which reflects the 12 months ended March 31, United was last. It scored an all-time low of 56, eight points below the industry average, and 25 points below perennial airline category champion Southwest.

Graham Atkinson, United's marketing chief, says the public perception is outdated and doesn't reflect the changes the airline has made the last year. Industry consultant Mo Garfinkle, who occasionally works for United, says the airline gets rapped unfairly on customer service. "I'm not necessarily a United fan, but I want to be fair to them," he says. "And I don't think it's fair to say that United is operationally inferior to anybody else."

But perceptions die hard, especially when you have someone like Canadian singer Dave Carroll out there.

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