Tue Apr 03, 2018 12:44 am
I think the problem with United is a combination of years of labor-management issues that plagued PMUA, long before bankruptcy and stretched back into the 1990s. Relations were never good, and often acrimonious. The pilot deal in 2000, just before 9/11, raised labor costs to a premium, well above the rest of the industry. Legacy United had a lot going for it though. A strong brand, an enviable route network, including a sizable TPAC operation, a reputation for strong maintenance despite the post-bankruptcy practice of putting off some non-essential maintenance to keep costs down to the point where the fleet was a hodgepodge of liveries, interiors were dated and dirty, and flights were delayed due to maintenance issues. The merger with Continental was very badly executed and seemingly, done in a hurry. Granted airline mergers on that scale had only been done once previously with DL/NW (I would not count US/AW as a template) but UA/CO management were clearly not on the same page a lot of the time and focused on costs, not getting the painful parts of the integration done first, and the result, is well, we know what happened. Smisek was focused on cost cutting long before he assumed the CEO role. His tenure at CO wasn't stellar. Continental's brand did decline under him, considerably. CO itself was, for a period of time, a successful, well run airline, but also highly leveraged, which is something probably not looked at in the right manner at the time of the merger, or overlooked, or perhaps the focus of getting the costs in order early in the integration process. Post merger, the airline has an even bigger and more competitive route network with hubs in top US business markets, but it competes with at least one other big airline or a LCC or both in every single one of its hub markets (including NYC). Just look at the premiums DL charges to fly in and out of DTW, MSP, ATL, SLC....it has a large share of the market in each. UA does not dominate any of its hub markets. For instance, in DEN it has WN and Frontier, in SFO, it has AS, in ORD it has AA but they can and do coexist, in Houston, it has WN across town at HOU...Post merger, United was slow to swap out 50 seat regional jets, which were suited for the CO operation, but not the UA and expanded Post-merger UA network. Smisek miscalculated capacity cuts and the entire management team was slow to unify pilots and flight attendants under joint contracts, exacerbating the problem. Low morale, a botched merger, and the lack of a unified product are the heart of the customer service issues, along with a perennial lack of focus on customer service that resonates with employees and builds trust in them. Today, UA has a better operation overall, but it has a long way to go. The incidents of the last year are probably overblown in the media but they are truly horrendous, but not unique to UA. DL and AA have their fair share of those too, but they seem to manage the PR a bit better. UA is slow to roll out an over ambitious premium product and AA and DL continue to run circles around UA in terms of presenting the illusion of a unified brand / product. Oscar Munoz doesn't get it. If he did, he would not respond to the dragging or pet death incidents the way he did. He's just a bit better at labor management communications but the company needs a large brand overhaul and a re-engineered platform from which labor and management work together. Until that happens, United will remain what it is...