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Saving United: If I Were Jack Creighton (A Speech)

Thu Nov 01, 2001 10:31 am

Here is my entry for the "Save United! Sweepstakes"

Saving United: If I Were Jack Creighton (A Speech)

I would start out with a forward-looking speech on November 1, 2001:

“My valued employees, customers, and shareholders:

I cannot emphasize more the fact that there is nothing wrong at United that can’t be fixed by what is right at United. Today, we are left with a dramatically reduced operation.

I want to be honest with you. The cutbacks we have had to make are not just the result of a weakening economy and aftermath of current events. It would disservice learning to lay blame completely on events out of our control. The crux of the matter is that, even as we encountered tremendous growth and prestige in recent times, decisions were made and actions were taken within the company that worked against a future well-being.

I’m talking about so-called ‘strategies’ that strayed away from our core business. I’m referring to management and union propaganda and action that were dishonest, uncooperative, and downright selfish. These things led to an inconsistent work environment, despite our successes. They alienated employees, passengers, and investors; they left these key stakeholders in United confused and frustrated.

What makes our most successful competitors so successful? A truly successful airline pleases employees, customers, and shareholders, none at the expense of another. True, as a publicly-owned corporation, our ultimate objective is to accomplish favorable financial results for stockholders, with a primary mission of attracting and pleasing customers. But we must not lose sight of the fact that an airline cannot be run without its employees, and that it cannot be run well without ensuring employee satisfaction.

To this end, I salute Southwest Airlines. I trust that one competitor’s praise for another will not be seen as something unreasonable, especially in this time of necessary cooperation and mutual understanding. In a fraction of most major airlines’ histories, they have managed to pursue relentless growth. How did they do it? I don’t want to underplay their strategic moves, but most importantly they’ve consistently attracted and retained extremely satisfied employees, who have in turn given superior customer service to repeat passengers, which has in chain attracted investment to keep the airline growing.

Perhaps most crucial is that they’ve chosen to do one thing, and to do it very well. They have chosen to run their airline as best as they could run it, with an enviable record of near-stellar operational results, and so it follows, solid worker and passenger satisfaction ratings, and an ever-upward stock valuation.

I do not want to underplay our successes, either; but the truth is that despite our former reign as the world’s largest airline, we were not the best airline we could have been. I cannot underscore more how being larger does not mean being better. Our status set unreasonable expectations for employees, customers, and shareholders, each who expected the highest pay and benefits, the highest level of service, and a commensurate level of profits, respectively.

Those were expectations we could not meet. Being largest also meant having higher costs, being exposed to greater risks, and being increasingly unable to expand. We also found it harder to run our core business. Our operational results consistently lagged. Our customer satisfaction results were marginal and satisfactory at best. Our stock started becoming less desirable. The prevalent mentality was that if one person did not fly United, another would. Our success seemed as assured as that. No, being biggest was not being best. If anything, our attitude proved it. Fortunately, we are here to learn.

The first step towards recovery is acknowledgement, and I’m glad you are here with me today to do that. Next, we must re-evaluate exactly what kind of airline we are, and how we’re going to be what we say we will be.

In the past, we were so large we tried to be everything to everyone. This is reflected in our annual mission statement: ‘To be the number one airline in the eyes of customers worldwide.’ Not only is this too simplistic, it is unreachable. The fact of the matter is that airline business is cyclical, and highly prone to fluctuations in the geography of economic activity. That is, the constantly changing locations of business make it hard for air transport to remain stable. It is near impossible to be such a global airline as envisioned by our mission statement; so let’s accurately asses the market we really serve.

What makes United United? As I’ve said before, we have great people, great hubs, great planes, great cities. We are a different airline than Southwest. We are a network carrier. Our strongest asset is our nationwide, international route network, which is flown with a fleet of modern, fuel and training efficient, mission-oriented aircraft, and supported by a diverse and talented workforce. Our reputation is one of ubiquity for business travel worldwide. It is the niche we have chosen to try to succeed in.

The market we serve is both global and local. Our international routes are some of our most profitable, but they can only remain profitable if they are filled with domestic passengers, both from home, and from foreign countries. With limited resources, it is near impossible to have a domestic presence in every international market. This is why we’ve partnered with international carriers, such as our Star Alliance grouping. Much the same way, we are only able to serve the most major markets in our home country, which is why we’ve delegated out flying to our United Express partners. With lower costs and small, cost-efficient regional aircraft, they can profitably serve those markets for us.

For years, the airfares we’ve offered have had a tremendous range in price. It was what the market conditions had called for: we charged business travelers who wanted to travel at short notice as much as they were willing to pay, which were very high fares. But we still had to fill empty seats, because most flights had limited demand for business travel. We charged ultra low airfares to leisure travelers, under the conditions of imposing restrictions on their tickets. In essence, the high fares paid by business passengers guaranteed them space on flights, and those premiums subsidized the low fares of leisure passengers, who would have otherwise chosen other airlines with comparable prices.

Because we serve a higher proportion of business markets, both domestically and internationally, we have had a higher share of business traffic than other carriers. As the economy surged in the last decade, we kept track of how much business travel was fueling our growth. It was staggering. So within the last decade, most of the decisions we made dealt with keeping and attracting high fare travel. We renewed our fleet with passenger-favored single-aisle and wide body aircraft, enhanced our premium services both onboard and on the ground, and tailored Mileage Plus for the high-yield passenger.

Even though we focused on the business traveler, we tried to be everything to everyone. Afraid of losing market share in our traditionally strong western region, we established United Shuttle as a low-fare competitor with low-costs and no-frills. Our product became inconsistent. Service provided on those routes was not what customers came to expect from the ‘world’s largest airline’. The project was plagued with customer complaints, in spite of the hard work of our employees. We tried to capture more of the domestic market by acquiring US Airways, a merger that seemed good on paper until it became apparent we had more important problems to face. Most recently, our innovative idea of entering the fractional executive jet business drew the offense of many.

Given that we’ve historically had the highest share of business traffic, why is it that we’ve been performing so poorly? The data for first half of the year showed that, in actuality, United’s yield (or revenue generated per passenger) was lower than American’s Delta’s, and even Southwest’s. Where has our share of high-fare travel gone? It is true that we did rely on a lot of the business traffic that grew and subsequently shrunk in the last decade. However, the cost of spreading ourselves too thin over the years paid its toll. We lost many of our most desirable customers as a result of our summer performance last year. Even leisure travelers started to avoid our business after much bad publicity.

It’s simple: we lost focus. As a company, the initiatives our leadership was advancing distracted us even more from our core operation. Thankfully, we are here today to refocus on our top priorities. It is a new business environment we face, and we must adapt.

The new economic reality is that air travel will never be the same: with new security measures, it will not be as convenient; it will not be as efficient. Southwest has the business model to cope well with the industry crisis. With only one fleet type, service limited to domestic markets, and settled labor contracts, their costs are controlled. Unfortunately, more than ever, we are struck by the global ramifications of recent events. We have invested heavily in internationally configured aircraft, and most of these aircraft need to keep flying international routes to be paid off. We’ve already invested in the facilities to maintain our global network. We can, however, take a page from Southwest by focusing singularly on our three key stakeholders, none at the expense of another. We will show that we rely on all travelers, not just business passengers.

Our new mission statement is:
‘To provide the highest standards of safety and operations in air transport to and from the United States, countrywide, worldwide, for our employees, passengers, and investors.’

We want to remain a network-based airline. We want to continue to serve global business interests. However, our roots are in the United States, and we will continue to comply with all authorities to ensure safe, reliable air transport. We want to support freedom of choice in the airways, and we want to show that we are a good choice to fly.

Today, we have laid the foundation for a leaner and meaner network carrier.

To our employees: the first thing we must repair is the frayed trust and cooperation between leadership and the labor groups. It was to everyone’s dismay that our first round of contract negotiations was not fair and seamless as was promised. Employee stock ownership was intended to create a team-based environment, and generate a true feeling of ownership of the company by individual employees. I realize that although all signs point to this project’s failure, your employee ownership is as important now as ever. I sincerely wish no one feels as if their long term investment has been ruined. There is still hope. Employee ownership has shown its strength in our employees’ ability to act on their dissatisfaction with leadership, and by the dignity of those who have been affected by our necessary furloughs. They will forever be a part of United.

Last night we marked with remembrance the retirement of our entire Boeing 727-200 and 737-200 fleets. While it is greatly reducing our capacity, this move dramatically reduces our maintenance costs. For instance, a complete engine type is eliminated, and training is simplified. This may seem like an ominous reduction, but I ask you to fret not: for when the lost demand for travel resumes, we will be there, armed with deliveries of new airbus aircraft, with a workforce ready to accept and deploy them.

Avolar, while a well-researched prospect for diversification of our business, would be best left to another management’s focus. Present leadership is now singularly focused on establishing rapport within all employee groups, restoring financial solvency, and delivering excellent operational results. We feel that aligning our business with business jets will be valuable sometime in the future, but ownership of one is not necessary.

Let me underpin the point that, while we may have the financial support of the government and numerous financial credit lines, those options are crutches, not cures. They do not lead to financial stability, but merely prolong instability. Already, we carry an unencumbered amount of debt. We would like to grow again, to serve our stakeholders better, but in order to do that, we must have healthy credit. Let’s work together in cutting costs so we can trim our debt, so that we can grow again.

I have opened the books for you; we will discuss our numbers together. I have the utmost faith that we can come to reasonable and fair agreements. I want to ensure a good quality of life for all United workers, but we must keep costs reasonable, especially given today’s air travel environment. You will see exactly how much of our business traffic has dropped off, and you will be exposed to our strategies for recovering that traffic. Some of the proposals for contract adjustments include an indexing system of wages, where we will tie inflation, stock ownership value, and seniority into pay that revolves, and is amended, quarterly, for the short term as we try to restore stability.

Givebacks will be necessary across the board, and we will share and explain with you the appropriate cutbacks we are making with management, salaried, and non-union workers.

We will institute an 800 number for employees to call-in with suggestions for improving work processes, or with questions or concerns about decisions that have been made. Management will dedicate its time to answer questions on a rotational basis; I will be picking up the phone as often as I can. We will work in earnest to formulate the type of ESOP teams that once existed, and almost become standard.

Over the coming weeks, I will be going to each of our major employment stations to meet with labor representatives. In addition to labor contract negotiations, we will be discussing company-wide strategies for reducing costs and recapturing lost market share, I encourage all of you to attend the conferences where you can, where I will be giving summaries of the progress achieved on a daily basis, and will be taking your questions. I hope we can all work together in assuring expedient and fair review of contract proposals. The sooner we are at agreement, the sooner we can build on that trust.

Lastly, I encourage you all to be proud of your airline, and to proactively show your pride to your customers, to fellow coworkers, and to the flying public at large. Make no mistake: we will come out of this a stronger, if smaller carrier. This is the airline that you built, the airline you will keep flying. Please, promote all the steps we are taking to make travel safer and more bearable. Notify passengers that we have reinforced all cockpit doors. Inform them that we offer free entertainment onboard all our flights. Advise them of the convenience of our new electronic check-in. It is alright to answer questions with, ‘I don’t know,’ as long as you find out. You can say, ‘certainly,’ in addition to fulfilling our customer’s requests. Keep reminding them we appreciate their business. Above all, stay abreast of what’s happening. A little goes a long way. An informed employee leads to an understanding customer. Already, buzz about your professionalism and candor in the aftermath of recent tragedies has legitimized itself in our most recent stellar operational results. Show the world that we really are united.

To our passengers: I want to assure you that you will be flying the safest United that’s ever existed, a United that is dedicated to getting you to where you need to go. We realize that travel has become a lot less easy, but we’ve previously rolled out a wide range of innovations to make it easier. In addition to our Easy Travel products, you will find online tools at our website to keep you informed about flight activity, fare sales, and policy changes. You can always call our dedicated customer service hotline as well. We appreciate your understanding as we rework our schedule to better meet your needs with our smaller presence. Your business is important to us, even more now than ever.

To our stockholders: United desperately wants your confidence back. In the coming month’s, we hope you will recognize our proactive measures to restore our finances.

When the industry rebounds, we will be poised to take advantage. Despite the threat of competition nationwide in this vulnerable state, United plans on holding its own through the performance we will give achieve for our employees, customers, and investors.

We are currently faced with an unprecedented challenge. But out of challenge, stems opportunity. We can and will meet this challenge: we have the capability. In this unprecedented moment, we can develop unprecedented way of cooperation and communication within United. Let us show the world that life really is a journey—and that flying United means traveling life well. Thank you.”
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RE: Saving United: If I Were Jack Creighton (A Speech)

Thu Nov 01, 2001 11:47 am

BRAVO!!!!! I do hope to hear something very similiar from Mr Creighton. I think UA managemant will concentrate on the core business : United Airlines. They should kill Avolar as soon as possible. Very well written!! The777Man
Boeing 777s flown: UA, TG, KE, BA, CX, NH, JD, JL, CZ, SQ, EK, NG, CO, AF, SV, KU, DL, AA, MH, OZ, CA, MS, SU, LY, RG, PE, AZ, KL, VN, PK, EY, NZ, AM, BR, AC, DT, UU, OS, AI, 9W, KQ, QR, VA, JJ, ET, TK, PR, BG, T5, CI, MU and LX.. Further to fly.. LH 777
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RE: Saving United: If I Were Jack Creighton (A Speech)

Thu Nov 01, 2001 12:00 pm


Another well written piece, as I've come to expect from you Hass... wonderfully written, and you've hit all the right points... down with Avolar! Or even better... may I nominate Mr. Hassin Lunsford as the new CEO of United??? Big grin

Head in the clouds... yet feet planted firmly on the ground.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Thu Nov 01, 2001 12:37 pm

Gosh, imagine an airline CEO presenting such a pragmatic approach to addressing the company's problems.

And an airline CEO actually being forthcoming in addressing his/her employees...inconceivable!  Big grin

Great job, BTW!  Big thumbs up


RE: Saving United: If I Were Jack Creighton (A Spe

Thu Nov 01, 2001 1:12 pm

Since you are not one of my Freshman English students, I am going to spare you all of the diplomacy and just say... The prose in this speech is abysmal, full of empty phrases and empty ideas.

What, for example, does this sentence mean? "It would disservice learning to lay blame completely on events out of our control." How could one "disservice" learning, when "disservice" is not even a verb?

Your use of this word is perhaps more symptomatic of the problems with United than indicative of a solution to those problems. Does everyone at United think the word disservice is a verb? No wonder they do more of that than provide "service."

Grammar aside, it seems like you didn't learn much from your tenure as an intern at United. If you really think that United's problems could be solved with a speech, you and United are headed for another rude awakening.

United's problems are not just psychological; they are systematic and cultural. I wrote a post a couple of month’s back in which I compared and contrasted the corporate culture of United and American. In that post and one other, I noted how United has never formalized a number of work processes. I also noted how United's strategy for growth has always been externally driven. I argued that that external focus is consistent with a management team and corporate culture that sees no value in formalizing internal processes and transactions. If the corporate culture itself is the source of many of United's problems, including United's poor baggage delivery performance, I dare say giving a "feel good" speech to a representative group of baggage handlers isn't going to make things better.

If truth be told, I could care less if United fixed its problems. I'm enjoying their fall much more than their "rising." Plus, United's fall only confirms that AA always had the superior product and management.

But to those who care, do you really think that the first thing management at United should do is make their employees feel good? Why not just give them kool-aid with poison to drink? At least that would hasten the end. No, the first thing management needs to do is figure out a way of regaining control of the company. Two employee board members on the board are two employee board members too much. If management must always second-guess itself in an effort to please these two constituencies, it is going to continue to be held hostage by its employees. I often thought to myself that United management spawned United New Ventures and Avolar because they wanted something to manage without the interference of the pilots or machinists.

How United is going to do this, I don't know. Clearly, management must undertake some capital restructuring that lessens the amount of employee ownership. In good times, United could have taken on the additional debt to do that. Now, they don't have that much room in which to maneuver.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Thu Nov 01, 2001 2:10 pm

My God. Your post was so rife with bitterness it made my eyes sting.

If my writing skills are poor, so are your reading skills. The last thing I wanted to do was sugar coat the truth. Obviously, aspeech is not a solution. Acknowledgement of the problems that face the company is the start.

I could care less what you think. At least I spend time and effort to create something. I don't wallow in whatever nasty emotion it is you immerse yourself in, rejoicing at the prospect of some 100,000 people losing their livelhoods.

Thank goodness for free speech, for it shows me that condescending people deserve exactly that which makes them condescending: lives filled with so much insecurity they can only belittle others to feel good.
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Thu Nov 01, 2001 2:13 pm

I could care less if United fixed its problems. I'm enjoying their fall much more than their "rising."

Gee, so the thought of thousands of people losing their jobs makes you feel like watching your favorite sports team win the championship...

...what a guy.  Yeah sure
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RE: Saving United: If I Were Jack Creighton (A Speech)

Thu Nov 01, 2001 2:23 pm

Nice little speech there. With a speech like that you'd fit in as UAL management, if what you were saying was 5% truth 95% lies.

As for the givebacks, not from me. Its kind of annoying when people say we should be offering concessions. The last mechanic raise if I remember correctly was Feb 1 1993. I'd rather see this company go out of business before I give up more money again. I'm sure there are a lot of other IAM employees who feel the same way. Why should we all have to pay again. This company has just been through a period of record profits and low wages. When things were good did the company share the wealth. NO! But as soon as things go bad they expect givebacks. Upper management squandered bilions of dollars. UAL doesn't deserve to be in business or any of the bailout money from the taxpayers.

Check out this link for mechanic wages.


Pretty pathetic that what used to be the worlds largest airline, and biggest profit maker only has Ameica West who pays less. (TWA doesn't count, they're now AA)

How much more do you industry experts expect us to give back?

Jetfixer  Smokin cool
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RE: Saving United: If I Were Jack Creighton (A Speech)

Thu Nov 01, 2001 2:37 pm

An absolutely fabulous job, SFOintern. You ought to submit this to United HQ and see what comes of it.

What I like about this speech is that it takes the first step in getting back both consumer and employee confidence in the airline. These are key if United is to remain a viable and profitable major carrier.

And these are some of the same actions that Gordon Bethune took when he entered Continental. That was an airline that was much worse off than United is today, having only barely survived two bankruptcies, poor service, employee hatred of management, and passenger discomfort. Bethune entered with an avant-garde attitude of common sense and *listening* to his employees, which helped right the ship. Now CO is a viable carrier--when once it was an airline that was on life support. Make no mistake, there were dozens of other changes that had to be made at Continental before they could escape the clutches of bankruptcy and incompetent management, but the very first step was to attempt to gain back the employees' and passengers' trust in the airline.

We can also look to Pan Am for an example of what *not* to do in a similar situation. Throughout the 60s and 70s, PA tried to do something similar to what United is doing internationally--being everything to everyone. Pan Am took planes to all parts of the globe, many times without regard to how profitable the service was, or how efficiently it was being run. All that seemed to matter was the number of destination marks and colored lines that could be drawn to connect them the U.S. That, the fuel crisis of the 70s, and the overpurchase of 747s got them into trouble. But instead of righting the ship while management could do so, they committed one blunder after the next, selling off profitable assets and buying National (instead of forming their own domestic route network). All of these acts eroded employee confidence throughout the 80s, beyond the point of return. Passengers got fed up and started flying other airlines. And then came PA 103.

My point is that instead of addressing head-on the problems that they faced, PA ignored them and went on about business as usual. Cash flow running in the red? Just sell off another asset. Atlantic loads low? Sounds like a good time to start up that new service to Warsaw. And all the while, passengers and employees started hating the airline so much to the point that it would have been nearly impossible to get back their confidence.

Without the employees and passengers believing in the airline and actively *wanting* to work/do business with it, a carrier cannot exist in a stable fashion. And this is why your example of Southwest is so completely appropriate in United's case--it is an airline which has found a stable and successful business model, despite the fact that so many airlines (read: United, Delta, USAirways) have tried gunning for them and putting them out of business. WN's model works in large part because its passengers and employees view it as a great company to fly with. Happy employees make for better service, and better service makes for happy passengers. Happy passengers fly with you again--and on top of that, they tell their friends about their positive experiences. (As an aside, this is something that most of the major airlines have not figured out--at least not in the way that Southwest and jetBlue have)

Are there a lot of other problems that need to be fixed at UAL before it will be a strong carrier again? Certainly. But that job cannot start until people *believe* that it can happen.

I like your idea of openly admitting that recent strategies at the company have failed. Being everything to everyone is one of the main reasons why the major airlines in this country cannot hold a candle to Southwest. In particular, however, United has made quite a few notable mistakes in this effort, as you mention: Shuttle, Avolar, etc. The strong and clear message of your address is critical to the survival of United as a major player in the airline industry: focus on profitability and customer satisfaction. And it makes perfect sense, because at the end of the day, these are the only things that matter. Market share, by itself, doesn't keep an airline in business. Profits do--management should fully realize this.

While addressing the airline's several major shortcomings, you do an admirable job of highlighting the many things that United does right. They have created an easy-to-use and informative website that is tailored to the needs of their customers. They provide an extensive route network and options for passengers, including excellent connection opportunties to other airlines through what is probably the best alliance in the industry. They have replaced old jets with modern equipment, both Airbus and Boeing, and will continue to do so in the future. These are major plusses for United, and I think it benefits everyone involved to remind passengers, employees and stockholders of them.

This is more than a rah-rah pep rally speech you have written--it is a first step in a larger framework of improving an airlines damaged operations, consumer confidence and profitability. (Perhaps Ladevale did not pick up on this?) That is precisely what United needs right now.

Some suggestions that I would have for additional changes to UAL:

(*) Creighton must get down in the trenches with UAL employees, as Bethune and Kelleher did. However, this cannot be a mere "show" for the cameras, but an actual commitment to show that even though he is paid more than all of his employees, he's still no different than them, and that he is willing to pitch in and do what it takes to make the airline a success again. Same goes for the rest of management.This makes it harder for employees to see management as a white-collar enemy bent on making money at their expense. Of course, fair negotiation is key, but this would go a long way towards uniting (pardon the pun) both sides of the airline and getting them to work together towards the common goal of profitability, safety and quality service.

(*) Drive home the point that the new United will build its internal culture around *listening* to its employees and giving them the incentive to improve. Not only will this make it marginally easier to get concessions from employee groups, but it will improve customer service and satisfaction (by improving employee satisfaction). This begins with the 800 number you proposed, but should also be extended to financial and material rewards for improved performance (such as the bonuses CO employees receive for on-time arrival rankings) and for reporting innovative ideas about improving the airline to management. Making UA employees proactive about improving the airline is the surest way to improve the product and the airline's profitability.

One final note--CEO's of major companies have personal secretaries (and sometimes speech writers) who do the proofreading and grammar-checking in their addresses. I would not be very critical of the first draft of a speech in that regard, as it would almost certainly go through several rewrites before being presented to the audience.

In any case, kudos for writing a very powerful and appropriate speech, SFOintern. I certainly hope that someone in the UAL power structure will see it and take heed of its message.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Thu Nov 01, 2001 4:15 pm


Thank you so much for your thoughtful post.

It is so gratifying to see someone seeing the same picture as I am. Your extra suggestions are very worthy and keen themselves.

I'm going to try to get a hold of EXO, somehow. =) I'll talk to my former boss and see what she can do.

If you'd really like to support this... go to http://boards.fool.com/Message.asp?mid=16027723 and recommend it so it can wiiiiin Big grin

Let's both be the CEOs. Kai is a great PR guy (he is PR of BASA hehehe). He'll be head of the new, actually *thinking* PR department. The777man will be there in fleet planning, negotiating for more 777s hehehe.

e-mail me if you have the chance... SFOintern@hotmail.com
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RE: Saving United: If I Were Jack Creighton (A Speech)

Thu Nov 01, 2001 4:16 pm

Well stated, SFOintern!

The most important thing at this pivotal point for United is to standardize its service and solidify a consistent reputation, some things that were lost because in the past United tried too hard to appeal to every kind of passenger.

One of United's biggest mistakes in recent memory was "Rising". Rather than improving upon its internal deficiencies, United raised its vulnerabilities into public awareness. Passengers never accepted the admission of mistakes anyway. Rather, they heaped upon the airline with a vengeance. For example, Mr. Goodwin's public apology on television ads in the summer of 2000 didn't endear anyone. Conversely, they inspired customers to demand the airline to pay up. After all, United admitted guilt to their "suffering" that summer, right? Those who fly often knew that if they complained hard enough, they'd almost certainly get a discount voucher or two.

Though the passengers cannot be blamed for United's operational and labor problems, United made them into a problem by giving them the means to drain its revenues. United thought that passenger loyalty could be bought back with vouchers, but in the process, United forgot to improve itself. It found itself constantly in a defensive position, trying to resolve individual problems that already happened, rather than preventing those problems from happening again.

United should stop apologizing to passengers and instead focus on the employees and streamline its business processes. Trying to placate all passengers certainly hasn't brought in additional revenue. In fact, revenue growth have been negative every quarter this year. Southwest certainly doesn't try to appeal to everyone, but people know exactly what to expect on them. I'm sure we all know plenty of people who despise Southwest, but they're consistently profitable so they're doing it right.

As long as United resumes to running its planes on time, delivering bags reliably, and offering a consistent service that fits its brand image, passengers will come. But this could only be accomplished by starting to focus on employees and business processes. It cannot, for the moment at least, start with the passengers.
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RE: Saving United: If I Were Jack Creighton (A Spe

Thu Nov 01, 2001 4:17 pm


Ouch. I think SFOIntern told you off quite well. Something else for you to ponder: Most people in the "education field" (like you) are known to be cowards who are afraid or have failed to thrive in the real world of work. They are often ripe with bitterness and envy at those who actually participate in that real world, thus clarifying their lack of productivity and worth in society.

Professors and the like never have been able cope like regular working people with practical skills and experiences. They hide in academia just like a kid who's afraid of the dark hides under the blanket. And as compensation for this, they need to needlessly attack evryone else's grammar as if it de-legitimizes their arguments.

It's probably this type of lunacy that compels someone to write, "I'm enjoying their fall much more than their "rising." Only an "educated" fool would write something so brazen and juvenile. Only those who have *not* used academia to hide from the challenges of the real world would know to never express something so callous.

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RE: Saving United: If I Were Jack Creighton (A Speech)

Thu Nov 01, 2001 5:16 pm

I may be supporting a lost cause... but I think that what Ladevale meant by her comment wasn't that she wanted to see all these people lose their jobs, but rather that she was making fun of the "rising" campaign. Face it, United did just about everything but raise their standards during the last couple years, yet now that everyone seems to see the company as "falling", they are finally beginning to do something about it. Just got back from a trip to AUS on them and was extremely impressed with the entire trip... now that they have dropped the "rising" add-campaign, they seem to ironically by rising once again. Yet I guess they had nowhere to go but up. I hope I'm not putting words in anybody's mouth, and if you were really just refering to the company going under, than I retract my statement.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Thu Nov 01, 2001 10:15 pm

I'm glad people agree United should get back to the basics. Indeed, all airlines need to refocus. United is just the clearest example.

Much as we have specialization of industries in certain geographical regions (for example, fancy shoe leather from Italy -- not a very good example, but an example nonetheless), airlines must specialize in doing what they're good at.

United is great at plying the trunk routes of American business. Let's hope the parts of its sum realize they're more valuable together, and start taking action to right the foundering of this ship.

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RE: Saving United: If I Were Jack Creighton (A Speech)

Thu Nov 01, 2001 10:26 pm

Beautiful Speech!
I hope United will recover from all this...
Best regards from Argentina

PS GO UAL 777s!
Hey, why did ual never ordered 777-300s?
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RE: Ladevale

Fri Nov 02, 2001 1:30 am

Boy, I'm glad I'm not of your Freshman English students!

"If truth be told, I could care less if United fixed its problems. I'm enjoying their fall much more than their "rising." Plus, United's fall only confirms that AA always had the superior product and management."

The phrase is "I COULDN'T care less. . ." To use could is to imply, in fact, a genuine level of caring that stands a chance of being reduced in the future! Most assuredly not what you meant, right? Syntax, syntax, syntax!

Those who throw stones. . .

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RE: Saving United: If I Were Jack Creighton (A Speech)

Fri Nov 02, 2001 1:39 am

Great speech all around, SFOIntern. Good content, good rhetorical style, and good organization. Avolar needs to be heaved into the Gorge of Eternal Peril *now.*

I'd just like to add for the record, SFOIntern, that your intelligent and thoughtful posts are one of my favorite things about this forum. I always look forward to a thread that has your name on it.

Need a new airline paint scheme? Better call Saul! (Bass that is)
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RE: Saving United: If I Were Jack Creighton (A Speech)

Fri Nov 02, 2001 2:57 am


Thank you for your kind comments. I feel the same way about your posts, at least now.

To be honest, at first I had thought your posts about the "Cartel Six" were repetitive. But then I realized that you were absolutely right in repeating, cause no one was listening!  Laugh out loud

Airlines really have not been going after the simple grasp of true business: to seek profitability and stakeholder satisfaction in a fair environment.

At first I had rejoiced at the prospect of a UA-US merger. Boy, now do I feel different.

Your posts, reading Hard Landing, and me coming to value the simple things in life this last summer, helped me realize the realities of airline competition.

Thanks for showing me the light, Jim! Big grin
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Fri Nov 02, 2001 2:59 am

Overall, that was a pretty good speech, regardless of what Ladevale thinks. You did a good job of laying out what's broken, and more importantly, how to fix it. You mentioned a phrase in your speech several times that I think is really appropriate for United's situation right now: "working together." When Boeing was developing the 777, they used this phrase prominiently in the project, because they sought the input of their customers in the design and devlopment of the plane. It's no accident that the 777 has become a huge sales success, because many of the airlines involved in "Working Together" got a product that best suited their needs.

That's why I think United should adopt this phrase as their Mission Statment. The one you came up with is good, it's like many corporate mission statements, but I think that in order for United to not only survive, but to thrive again, they need to work together as a team. I mean all of the various groups, from management, to the flight attendents, to the pilots, to the mechanics, to the baggage handlers, to the ticket agents, etc. Right now, unfortunately, it's Divided Airlines, and it's been that way for some time now. All of these groups need to get on the same page, and realize that they have to balance their specific needs with those of the company as a whole, and with those of the customers. Easier said than done, I know, but it can be done, if all of the parties involved are willing to do it.

At the end of the new commericals, they say "We are United." Now, more than ever before, it's time to prove it.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Fri Nov 02, 2001 4:50 am

IMHO, United Airlines should learn from the experience of Continental and how that airline reversed its horrible reputation.

By offering incentives to improve service all-around, UA could become a favored carrier again. They need a leader akin to Gorden Bethune to bring it back to profitability and good reputation.  Smile
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RE: Saving United: If I Were Jack Creighton (A Speech)

Fri Nov 02, 2001 7:09 am

Very well written SFOINTERN. Having worked for United and leaving them to go to Fedex i sit back and try to analyze what can be done to mediate the problem. Speaking to some of my former co-workers they are in no mood to give back consessions to help the company in the immediate future. I never thought i would leave United. I know its a different segment of the airline industry but the organizational plans are the same. FedEx believes in PSP which stands for PEOPLE, SERVICE , PROFIT. They feel you need to start from that to end up with profit. It seems that United lost touch with their employees and it seems that situation is not about to change no matter who is that the helm. I wish them the best of luck.
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RE: Saving United: If I Were Jack Creighton (A Spe

Sun Nov 04, 2001 6:10 am


This is a very well written speach. If Creighton spoke those words, it is my guess that there would be a new sence of Unity at United.

I L U V 7 6 7

RE: Saving United: If I Were Jack Creighton (A Speech)

Sun Nov 04, 2001 7:14 am

This was a very good piece, but was short on solutions to the problem.

Regardless what UAL needs, the IAM is NOT going to give them any pay concessions. Work rule concessions are about as far as they are going to get. Tom Buffenbarger and Jack Creighton have a history of co-operation and I see that as a very promising sign (especially since Buffenbarger has been taking a much more personal interest in the UAL matter than he has in the past, which may have the unintended effect of marginalizing John Peterpaul's position however), but for the IAM to agree to cuts would be suicide for their standing as a union. Besides, UA's cost structure is not inflated by the IAM contracts. That lies elsewhere.

UA AFA has continually proven itself to be selfish, out of touch with reality and incapable of agreement with anyone about anything. Their leadership at the MEC level is poor, but local grass roots programs are extremely strong, as is the national leadership of Pat Friend, who has UA roots. If we see a stronger leadership emerge at the MEC level, AFA will hold considerable clout in the restructuring of UA. However, I am not particularly hopeful. As things stand, the AFA will not offer the appropriate concessions on pay, and quite honestly, does not need to.

I blame Rick Dubinsky at ALPA for this entire mess. Not satisfied with almost ruining UA once during the Dick Ferris days, he had to flex his muscle again last summer. The demands made by the UA pilots were unreasonable to begin with, and the means they used to obtain their end were even more so. I danced for joy when I learned that ALPA will NOT be sending Dubinsky back to Elk Grove as their board representative in January. It is simply unconscionable for any company to have a board member who has gone on record stating that "The interests of the pilot group are more important than the interests of United Airlines". Paul Whiteford, who is slated to replace Dubinsky as the ALPA rep, has a reputation of being more level headed. This will be essential for United's survival, because ALPA is where the vast majority of the concessions must come from. These must take the form of BOTH pay cuts as well as scope clause concessions.

Apart from the ALPA contract however, UA's labor costs are not significantly higher than the industry standard. Truth be told, their overall cost structure is more favorable than that of competitors such as Delta or US Airways. With fuel prices stabilizing, UA can honestly and realistically target a 2002 return to CASM in the range of 11c/mile. This will allow them to break even (or at least come close to it), even with yields diluted by 20% or more.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Sun Nov 04, 2001 10:50 am

That was ok, I give it four stars, don't think that the CEO would mention their competition so much in South West Airlines, once or twice was probably enough.
How much time did that take to write and where did you get the information from.
Why fly non stop when you can connect
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RE: Saving United: If I Were Jack Creighton (A Speech)

Mon Nov 05, 2001 1:12 am

I don't know a whole lot about United, but everytime I hear about their culture, it reminds me of trench warfare.

I have no idea why that is, a tsarist management, greedy pilots or all of the above etal.

However, a company with that sort of culture bleeding at rates previously seen as impossible, looks like another Eastern or Pan Am (OK looks aren't everything).

What seems sad is the reports I hear from their international customers are very rosy right now.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Mon Nov 05, 2001 6:46 am

I think "trench warfare" among labor groups and airline management exists at all major airlines (except Delta) that have been around before Deregulation. It's a tradition fostered by the type of management style fashionable in the 50s and 60s, which viewed contentious relationship with labor as the norm.

Delta has always been considered "different" because it took a very paternalistic approach to employee relations, one that has kept unionizing limited to pilots and a handful of dispatchers.

Southwest, a 1971 company, is heavily unionized, but has none of the labor problems, because it made employees the central focus of company culture. Read "Nuts!" and you will see that Southwest consistently values its employees over its customers. And magically (yet not surprisingly), customers keep coming. The message is simple: it's employees that drive the company, not management (which guides), and definitely not the passengers (they follow).

Continental followed a similar approach to Southwest in the early 1990s, and made significant changes in its company culture. But it took the shock of impending demise to facilitate the change, a similar situation that United is in today.

By the way, I wouldn't place blame completely on ALPA for United's financial woes. If Mr. Goodwin had some backbone, he would have resisted ALPA's excessive demands and "unethical" tactics. He should have understood the company's books anyway, to know that the airline could not afford the contract that he agreed to. But Mr. Goodwin already could not negotiate in good faith with employees by then. In May that year, over the US Airways merger proposal, Goodwin promised US Airways employees protection from layoffs for two years, yet refused to make a similar guarantee to United's employees.

But that is all hindsight... the future is with employees. All wishes for better days at United!
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RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 12:54 am

DarnellJ (if that really is your name, LOL)--

Here's my response a la FT again Big grin

 Big thumbs up , thanks for your comments.
I agree that the machinist's union does not *deserve* at all a pay cut. Their wages, at ESOP level, are higher than only HP's. However, I'd suggest they stave off major raises, instead opting to make-do with adjustments for inflation and COL.

The AFA is almost as embittered and prone to passion and swaying as the ALPA. Don't get me wrong. They're already in a contract. Let's not start more CHAOS. (har dee har har)

And I share your complete resentment of Dubinsky. Hopefully the new successor will be more than just the lesser of two evils, but a good, company-conscious man outright.

* * *

The speech was not really meant to convey certain action, but a platform for the type of action that needs to become prevalent at UAL. I intended to be vague in regards to laying the blame on a specific union, knowing full-while that the most of it lays in ALPA's greedy little hands, pardon my french.

It would be hard to show bias against ALPA in such a "forward-moving" speech, but best to take responsibility as a collective company and community. In reality, I'd hope it would get through to the unions that ALPA and the infighting --as well as absolute lack of customer regard-- it caused was one of the most major problemos.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 2:28 am

I think of the big problems with management (in the airline industry and elsewhere) is their unwillingness to go to the operation in person and see how it runs. They cannot "dirty" themselves by seeing what goes on at the front lines. They cannot look at bits of the small picture that generally speaking add up to a large picture. I highly doubt that most upper management of an airline has ever set foot on a ramp, in a maintenance hangar, in a dispatch center, at a ticket counter, at the gate or anywhere that real work is being done in the company. They do not personally see what happens when staffing is cut or equipment is not repaired/replaced/upgraded. In the end, it angers employees and directly contributes to reduced customer satisfaction, which in turn causes the passengers to find another airline that delivers what they want. And the executives will not acknowledge that the front-line employees know how the operation runs, what its weaknesses are and what can be improved, both in quality and cost. That would just make too much sense! There have been some innovative programs, such as an initiative a few years back at NW for employees to find cost-saving ideas which in a short period of time enabled the company to save millions of dollars on just little things like "give the pilots cheap notepads to scribble on, otherwise they write on the 'Motion Discomfort Bags' which are a lot more costly" or "don't cater milk on flights to Japan, since nobody ever drinks it anyways". I don't see why every company doesn't do something like that, it just seems so logical. Executives seem to think that their degree automatically makes them an expert on every facet of how to cost-effectively run an airline, when in fact that is not always the case. Some execs need to come down from the high horse and see how things REALLY happen.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 2:48 am

Anyone who can spell "ubiquity", on a board chock-full of (presumably) English-speakers who use "now" for know, etc., has my vote.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 3:35 am

Basically, here's what I think should happen at UA:

Customer Service Agents - raise
Flight Attendants - neutral
Machinists - raise
Pilots - pay cut (roughly in the range of 20% on average)

Being a SkyWest employee, we're not unionized (at least not the Ramp & CS Agents), but our culture at SFO is probably comparable to Southwest's. Our co-workers aren't just co-workers, they are our friend. After work, quite a few will go out and party together. In turn, we're happy, so we display that when we interact with our customers, and they are happy (for the most part) in return.

Head in the clouds... yet feet planted firmly on the ground.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 4:08 am

20% pay cut for pilots?

Ouch! Why?

If you cut pilot pay by 20% there's going to be a sizeable exodus of pilots to higher paying carriers. Just ask TWA, Air Tran, AWA, SCA about retention levels at low paying airlines.

Doug Taylor
Airline Pilot (and pretty soon, flame bait!)

RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 4:31 am

Delta 737, I would like to throw a few numbers at you to illustrate just how much ALPA is responsible for the current financial situation at UAL.

The direct impact of the increased ALPA wage scales upon UAL's salary costs in the year since the contract was signed is $1.04 billion. That constitutes approximately 16% increase OVERALL from the similar salary costs the previous year. ALPA members draw approximately 21% of UA's salary expenses, despite constituting only 9% of UA's employee base. All told, ALPA salaries constitute just over 8% of UA's total expenses. That is the single largest individual cost component at UAL.

AFA salaries constitute just over 9% of UA's total salary expense, while constituting just about 20% of the workforce. There are no significant concessions that they CAN make to help United on the financial front, even if they were willing to do so. The IAM salaries at UAL are so far behind the curve already that it is simply impossible to trim them any further. The IAM has informally indicated their willingness to settle for short-term concessions in return for long-term contract promises. It is refreshing to see them FINALLY becoming a team player, rather than the prima donna union that took down Eastern.

The matter is very simple as I see it. UA cannot control any of their other major cost components, namely fuel prices, equipment costs, etc... to the same extent that they can control their labor costs. They are making cuts in areas such as food services, etc.. in an attempt to reign in these other costs. However, no matter how many service cuts you make, you are not going to recoup enough cash to overcome a $2bn annual operating deficit. The ONLY cost component that can be effectively trimmed without compromising operations in the short term is the ALPA salaries.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 5:49 am

Okie doke, well exactly what percentage of the ticket price goes to pilot salaries?

Also, since you seem to be handy with figures, in the last ten years, how have pilot costs increased in relation to management costs? A percentage would do just fine.

Actually, these are rhetorical questions because I already know the answers.

And, by the way, they're not ALPA salaries. They're union-negotiated hourly rates / ie wages.

I made a "salary" at my last airline whereas I made $14,400 annually if I sat reserve or if I flew a 90 hour month (flight time, not counting duty periods). Hell, In-N-Out Burger down the street pays more, but it got me to where I wanted to be.

The primary reasons I am strongly against cutting any management a blank check with wages and work rules are these:

First, the attitude is that "well, if we cut executive compensation, we'll lose talent to other Fortune 500 companies". I heard this during an airlines press conference. What about the pilots, flight attendants, baggage handlers, ticket agents, etc? Those are your "talent". People flying aircraft full of MELs, FA's handling drunk passengers, mechanics that work strange hours and have to be able to get a 777 back in the air in a small amount of time, ticket agents that are underpaid, overworked and underappreciated are your talent.

Sitting back behind a desk making "forward looking statements" and cranking up the "Memo-A-Day" machine pales in comparison to the real work done at an airline.

I took the PHX gate agents and rampers Einstein's Bagels a few days ago, just to show a little appreciation for their hard work during these times. When was the last time anyone from "mahogany row" did this?

Secondly, every time an employee group gives up wages or work rules to help the management team please wall street, it takes YEARS in order to get it back. I'd consider negotiating a strictly time-limited arrangement with mgmnt but there's no way that I'm going to write an indefinite blank check.

UAL does have nice pay rates. But ask the IAM and UA's MEC if they actually are making today in 2001 dollars what they made in pre-1994 dollars. At least I think that's when the employee buyout started. The answer may suprise you.

Am I ashamed of what I earn? Absolutely not, in fact, I love this job and I run a website to get MORE people involved in aviation because it's the best job on earth. Why not join us? Drop by my website when you get a chance and I'll tell you how to get into aviation, you'll absolutely love it. But keep in mind, it's not as easy as it looks.

Best Regards,

Doug Taylor
Airline Pilot
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RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 5:54 am

Delta - management at UAL has already deferred their salary for the rest of the year in an attmept to help the company. The IAM at UAL, which has about the poorest contract in the industry and haven't seen a raise in almost 10 years, have offer concessions in an attempt to save the company. So, tell me, why is it that the boys who suck up the largest amount of the compensation barrell through a contract won by terrorist thuggery can't give up a little to save everyones job? This stinks of Comair so bad it makes me furious all over again. Blind greed fueled by ALPA arrogance is going to drive another fine ariline to bankruptcy. The maddness must stop.

RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 6:25 am

Delta737, I have some of the figures you requested available right here. The period in question is 1994-2001, so it is a 7 year period rather than the 10 years you requested, but I feel that it serves the purpose.

Pilot salary costs account for 7.2% of ticket costs in 2000, compared to 5.9% in 1994.

Not including exercised stock options or ESOP earnings, pilot salaries at UAL have increased by 34%, while executive compensation has increased by 22%. However, I will concede that these figures are not very meaningful because it is impossible to quantify the value of the stock options and ESOP holdings negotiated over a period of time.

IAM contract employees have seen salaries increased by 0% in the same time frame.

I do not grudge airline pilots the salaries they earn (I use the word salary because pilots are guaranteed a minimum amount of hours per month by contract), just as I hope they do not grudge me mine. However, for persons such as Capt. Dubinsky to maintain that he will not consider concessions at a time when by every account except his own, UAL is bleeding like a stuck pig, is plain irresponsible, selfish and greedy. Capt. Dubinsky represents ALPA and gives the entire union membership a bad name through his arrogant attitude.

Mr. Taylor, you and your colleague TT737FO seem to be reasonable enough men. You fly a plane for a living and undoubtedly do it well, otherwise you would not be in the airline job that you both enjoy so much and speak of with such pride. However, if ALPA (and I use the union name here because it is the union who is the collective bargaining agent for the United pilots, making them responsible for any actions that need to follow) does not drastically reduce the costs associated with employing you to do those jobs, those jobs will simply go away, along with those of the 70,000 other employees of United.

Everyone needs to make sacrifices if United is to survive. The IAM will have to sacrifice most of the pay raises that have been denied to them for the same 7 year period that ALPA was denied because of ESOP agreements. However, the United pilots have the most available to sacrifice at this point in real dollars that will help United.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 6:41 am

7.2% of ticket costs? wrong, sorry! I wish though! I could move out to Greyhawk here in Scottsdale.

Also, only ONE person in upper management deferred compensation. That was Leo Mullin and it was only his -base- salary for about two months, not including "other" compensation where most of his compensation is made. Great PR move though.

The only thing that is going to save UAL (or any other airline) is ending their assault on labor and rally the team to pull on the same side of the rope.

Its really as simple as that.

This is my last post on this topic, today is work-on-the-yard day!  Smile

Doug Taylor
Airline Pilot

RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 6:57 am

Mr. Taylor, my figures are not wrong and I resent the implication that I would lie about these matters.

In fact, for Q3 2001, UAL pilots took home 8.7% of the total passenger revenues earned by UAL Corp, information which can be found in their SEC filings.

The total amount paid to United's pilot group in wages for Q3 2001 was $396,690,000. The total revenues earned through passenger transportation in the same period was $3,445,000,000. You can do the math yourself and verify my calculations.

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RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 7:10 am

I did the math and verified your figures. I come up with 8.68%, so if it makes him feel better, we should let him have the .02% difference. Not that it will save the airline, but he can at least say "I told you so" while he and his buddies are out looking for jobs.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 7:12 am

And according to my sources, there are currently 8,871 pilots employed by United (figure pulled June 1, 2001). A bit of simple math breaks down the following:

$396,690,000 / 8871 pilots = $44,718 per pilot

$44,718 X 4 (to receive annual salary average) = $178,872

A 20 percent cut would not hit that hard:

$178,872 X 0.80 = $143,098

I guess they wouldn't be able to purchase that 4th car, but that's a hit they'll have to take.

Head in the clouds... yet feet planted firmly on the ground.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 8:38 am

$180,000 a year to drive a push button bus??? And you won't give up one red cent? OMFG!!! You all deserve to be unemployed and living in a van down by the river. The unfortunate thing is that you will take all of the REALLY hard working people at United with you. Burn in hell ALPA. I am beginning to think ALPA is a Latin word for the Great Satan.
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RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 9:02 am

there are currently 8,871 pilots employed by United (figure pulled June 1, 2001).

We had about 10,700 pilots and second officers during Q3 of this year. (This was before the events of 9/11 and the subsequent furloughs.)

If you're going to pilot bash, please use accurate numbers.

RE: Saving United: If I Were Jack Creighton (A Speech)

Wed Nov 07, 2001 9:14 am

61Heavy, the 8871 number is the number of ALPA members as of that date. The figures may not include probationary and management pilots, although the salary numbers will.

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