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A State of the Union: United Airlines

So it’s suffice to say that United Airlines (UA) has had it rough of late.

They are one of the world’s oldest airlines, having been founded 91 years ago in 1926 is the country’s first airline. The company has gone through multiple Chapter 11 bankruptcies and also has been consolidated into and taken over various other competitors, most recently being the acquisition by Continental, though given the iconic nature of the United name the brand was more or less merged rather than gotten rid of.

The jury is still out on whether that was the right choice.

But over the years the airline has faced many difficult times with PR incidents, challenging times with the economy and the tragedy of losing so many passengers and crew on September 11, 2001. They have survived, and have weathered the storm that faced them at the time.

But in the day and age of social media, the airline has found it tougher to deal with PR disasters especially as the airline has grown not only organically, but by being one of the biggest airlines in the world after its merger with Continental. It’s been close to five years now that the two former rivals are a joint entity yet tensions simmer between the two unions of pilots and flight attendants, and there’s a simmering undercurrent of discontent between former CO and UA employees.

Moves have been made to mitigate the divide such as changes at the board and senior executive levels. But as evidenced with the most recent debacle with the violent incident that occurred on a Kentucky bound flight that UA, it perhaps is not enough as yet.

There’s a disconnect that has been in the background for years now, and it all came to pass on the day Dr. Dao was dragged off bloodied and injured by United Airlines security personnel (private security, not federal security – this is an important distinction. These guys were UA employees) after refusing a mandatory de-board notice that should have never happened in the first place.

United has been on overdrive to try to instigate some damage control especially after the meek and some even say offensive reaction of United’s beleaguered Chief Executive Officer Oscar Munoz.

So where does UA stand today? And what has the airline, who has a fleet size of more than 730 aircraft and flies to more than 340 destinations around the world done to try to garner some public trust back since the now costly (the airline lost about USD$ 700 million of net value in the days after the video went viral) Dr. Dao incident in Chicago?

Well, the State of the Union at United remains a mixed bag, with only a little clarity as to what will happen next.

But here’s a stab at some of the developments in the past weeks at the belegaured United Airlines:

Rebooking/Overbooking/Crew Travel Policy Changes

In the aftermath of the incident, the airline announced that through an internal review new changes would be made to the system that was currently in place at the airline.

One thing that should be made clear is that the crew that needed to fly were not on crew pass tickets nor were they off duty – they were “must travel” crew which meant that they were high priority to get on the flight. “Must travel” crew are basically on the top of the list of any flight manifest – and this is true industry wide. The four (two pilots and two cabin crew) had to travel because they were due to operate a flight the next morning, and if they didn’t make it to Kentucky that night the flight they were due to operate would be cancelled, affecting over 150 passengers. So four passengers offloaded to accommodate the crew to ensure that the 150 plus people the following morning would make their flight seems to be reasonable.

But as always, there’s a catch.

It’s the execution that kills you. Always the execution.

Since then, the airline has said that the new policy is that “must travel” off duty crew (that is, crew who must make the flight to operate a subsequent flight at the destination) can’t be booked into the flight (thereby offloading paying passengers) within 60 minutes of departure time – basically saying they can’t throw off passengers who have already boarded. Once you’ve taken your seat, you as a passenger have a right to travel and that’s it – done deal. You can however, be denied boarding if it occurs more than 60 minutes before the scheduled door close time – and will be reaccomdated accordingly.

They’ve also said they will explore other options for United crew who are on ‘must travel’ duty to get to their destination. It’s extraordinary that you can get to Louisville from Chicago in just a few hours if the airline just rented a car/bus/van to get the crew there versus bumping off a passenger that has already been boarded.

Costly decision on United’s part.

Compen$ation

What happened on UA 3433 was wholly avoidable if gate agents were empowered to resolve the situation in what would seem like a logical chain of events.  It was a Sunday night fully booked flight – most likely people were on their way home, ready to face the week ahead. It was a commuter flight from United fortress hub at Chicago O’Hare to Louisville, Kentucky – not to Orlando (read: Disney), not to St. Kitts, or Bermuda or Provendiacales or some other beach Caribbean destination – people were not on vacation – they were trying to get home in time for work the next day. It was also the last flight of the day, so if you got off it, you’re not making it to Louisville till the next morning.

It’s not mind blowing that the maximum compensation – $800 – was not enough to get people to do a voluntary offload. Why weren’t they offered more? You keep going up the scale and eventually someone will bite.

Yet somehow the UA agents felt it was more prudent to get their own private security agents to use ridiculous force to drag Dr. Dao off the plane. The man’s checkered past doesn’t matter and is not relevant here – he should not have been concussed, lip split open by private security agents to get him off a commercial flight that’s at the gate, doors still open. He did not pose a security risk to the flight.

As such, the United has now upped the compensation drastically – up to $10,000 actually (which in hindsight really just matches rival Delta Airlines’ rules, but any improvement is an improvement).

It’s important to note that this money will rarely ever be doled out – it mostly applies to people on a full fare International First Class ticket – these folks are few and far in between and will most not likely be affected by such a compensation (same applies for DL, by the way).

Regardless, it’s good that the airline has empowered its employees to be more flexible and open to offering more options to passengers who find themselves being either to be offered to offload, and in a worst case scenario being involuntary denied boarding.

For more information on the latest updates and according current offloading policy, read here. And here’s the full contract of carriage, just for good measure.

Chairman No More

Oscar Munoz is currently the serving Chief Executive Officer for United Airlines – the world’s second biggest airline. He’s had a rough ride thus far – personally and professionally.

On a personal level, he had a massive heart attack and had to go through a triple bypass surgery very early into his tenure as CEO. He was taking over from a disgraced former colleague in Jeff Smisek, embroiled in legal battles over some indisgressions having to do with politicians, so this made the time even more tricky to navigate.

On a professional level, it has been an absolute mess trying to integrate ex-Continental crew and pre-merger United crew into one system. It’s been an absolute mess trying to get some sort of product consistency into a fleet as large as United’s – as it stands there are more than 5 different UA premium products flying today. It’s also been an absolute mess trying to get some sort of cohesive communications and image campaign going, with the inexplicable decision to keep the United name and at the same time the Continental logo – identity crisis much?

Regardless, as UA ambled through these various different challenges and messes, Munoz was due to become the Chairman of the Board next year in addition to retaining his position as Chief Executive Officer.

Well, those aforementioned messes weren’t enough to bring him down – this less than five minute video was. He’s no longer going to stand for the Chairman position, and a new person will be sought to take that position. This has been a very costly incident for Munoz in many more ways than just the financial aspect of it all.

Case Settled

It’s time the airline moved on from this massive PR disaster – the longer it dragged on, the worse it became for the airline especially for the United CEO’s internal reaction to the situation (he absolved the airline of any responsibility – this email was inevitably leaked to the news media).

The airline finally has smarted up a bit and chose to go the easy route. Time Magazine along with other publications have now reported that the airline has settled with Dr. Dao for an unspecified amount. It’s time to move on from this massive stain on United’s reputation as an airline.

It’s been a challenging few weeks (and probably weeks to follow) for United. Photo Credit: United Airlines.

The State of the Union:

Well, the jury is out on this one. It’s difficult to say just how badly United’s brand and image has been tarnished by this appalling video.

The follow up was equally bad – it might have been worse actually. This is in regards not only United’s non-action before the situation took a life it’s own, but Munoz’s internal email to his employees of being ‘proud’ of the way the matter was dealt with. You couldn’t make this stuff up.

The airline lost nearly $1 billion dollars of its worth (it actually surpassed this figure at one point) – this has consequences and the airline still seems to be reeling from the adverse affects of this act of utter incompetency. Munoz is scrambling, both in front of the media and Congress to try to repair some of the damage and reach out to the general traveling public – but what is evident so far is that it has been to very little effect.

The ammo given to competing airlines – both at home (Delta) and abroad (Emirates, Royal Jordanian) – is not something United can underestimate, especially in this day and age of social media. UA has long been prime fodder for PR disasters – just since this incident took place, a scorpion bit a United passenger, the airline (through their own incompetence) killed a prized rabbit, one of the largest in the world in fact. They’ve also since lost an unaccompanied minor, and delivered a disabled passenger to the wrong destination. These instances would rarely get the press they’re getting if not for the Dr. Dao incident. But that’s how it works – United has made its bed, now it has to lay in it.

Let’s not mince words – United is on incredibly thin ice here. How the airline skates through the next months and into the busy and extremely lucrative holiday months in the Fall and Winter will be crucial to how their operational and financial metrics will look for the year. How openly information is disseminated in 2017 is unprecedented – so United’s subsequent response will absolutely be vital.

Will United go the way of the imperiousness of Michelle Kwan, or the complete disgrace of Tonya Harding? Remember: razor thin ice.

Featured Image Credit: United Airlines

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