United Airlines' makeover aims to refresh and renew

Carroll launched a humorous attack video, United Breaks Guitars, on YouTube in July. It told of a spring 2008 incident in which Carroll claims that United baggage handlers did $1,200 in damage to his $3,000 Taylor guitar. The video has been viewed more than 5.3 million times. Carroll last month posted a second video that focused on his frustrating efforts to get United to pay for the damage. It's been viewed over 300,000 times. And now he's working on the third song.

"My goal was not to drive United into the ground, though I've received letters from many people who want to do that," Carroll says. "But if I'm in a position to improve airline customer service, I'm proud to help do it."

To a degree, he's succeeded. United uses the incident in training baggage handlers and customer-service representatives. And it's sent a check for $1,200 to a charity as Carroll requested.

Bonuses for arriving on time

United also is trying to fix its dismal record for being late. Last year, it ranked 17th out of 19 U.S. airlines in on-time arrivals, according to Transportation Department numbers.

"You can't run a great operation one month and a lousy operation next month and expect passengers to believe it's going to be different this time," says Joe Kolshak, United's senior vice president of operations.

Kolshak has added time to United's flight schedules, especially for chronically late flights. With the new schedules, passengers won't arrive any sooner than before. But at least, he says, they now can make travel and business plans with a greater confidence they'll be on time.

He's also paying employees bonuses when the airline is on time. They get $100 each time the airline is tops in the Transportation Department's monthly on-time rankings, as it was in March. In months when the airline places second or meets internal on-time goals, workers get a $65 check. So far this year, the payouts to 42,000 front-line employees are about $18 million.

In July, the last month for which data are available, United came in sixth out of 19 airlines and third behind only Southwest and US Airways among big carriers.

There's another benefit for employees in being on time, Kolshak says. Crewmembers and ground agents can stop apologizing to passengers for being late. "It changes the attitude and the outlook, and you begin afresh."

United also touts what it contends is the best seating options of any U.S. carrier, especially for business and other travelers willing to pay more. "We have arguably the best premium-class products in the nation," Tague says. It's just expanded that with Premier Travel and Premier Travel Plus options. They let passengers pay extra for roomier seats, early boarding, bags checked for free and faster security lines.

Some customers, such as Coy Stout, are noticing.

Stout, a biotech executive from Moss Beach, Calif., who flies up to 125,000 miles a year, says, "The improvements to the three-class international premium cabins put United on a par with any of the international carriers." So when planning a trip next February to Hong Kong and Singapore, Stout says he chose United over highly rated Singapore Airlines.

Skeptics of success remain

Although the immediate financial danger has passed, United's CFO, Kathryn Mikells, continues to sell United's story on Wall Street, where skepticism that the airline can survive long enough to make itself over remains.

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