MIAMI— As United Airlines’ former CEO Jeff Smisek and two government relations colleagues depart unceremoniously under a cloud of opprobrium, new boss Oscar Munoz calls his appointment “a great opportunity to improve United.”
“I truly believe this can be a top-performing airline,” Munoz said in an investor call following the announcement late Tuesday, before doubling down on the importance of passenger experience. “We need to reach our customers with a better service product and we need to convince them.”
What’s first on Munoz’ agenda?
“The first step is I’m going to spend the first ninety days or so traveling the system, listening and talking to our people, and working with the management team. From my time on the board I know we’ve made significant progress, but there’s still a lot to be done.”
It’s an incredible job, but one that can be a Herculean task, like the labors of Sisyphus — or, end up being a poisoned chalice.
After all, it doesn’t seem that many employees or passengers will be mourning the loss of Smisek.
Passengers and @united staff at SAN are celebrating in the terminal!
— Team Pickles (@TheMrPickles) September 8, 2015
But let’s have a think: what should be first on Oscar Munoz’ to-do list?
1) Reset Employee Relationships
United’s biggest problem is the relationship between its management and its people. Fixing that is clearly high on Munoz’ priorities.
Notably, Munoz started talking about “colleagues” rather than “coworkers”. He’s off on a three-month listening tour, and making promising noises about properly engaging with the airline’s employees.
As a board member turned CEO, former freight rail boss Munoz has an interesting insider-outsider perspective on the industry and on United. That could well be what the airline needs.
2) Make Last Two Labor Deals
The airline also needs the last two labor deals that are still outstanding after its 2010 merger: with flight attendants and with maintenance techs. Munoz will need to work hard and fast — and being able to use Team Smisek as a scapegoat will be an asset to him. But his insider-outsider perspective could work against him if the unions consider him too close to the existing management team.
3) Stop the Outsourcing
The existing management team problem is of concern in the atmosphere around the airline’s work to outsource ground staff in nearly thirty airports. Whatever the economics of that decision — and it would seem very strange if one of the world’s largest airlines could not make having its own staff at airports like Atlanta work — it is a terrible look when turning a billion-dollar profit.
4) Drop Open Skies Nonsense
Speaking of terrible looks: a US3 airline CEO has resigned under a cloud of allegations of illegally colluding with government while in the middle of a concerted campaign alleging that the ME3 are illegally colluding with government.
The anti-open skies rhetoric has been racist, the arguments not entirely persuasive, and a prudent CEO would look at how much money is being poured into lobbying compared with the narrow potential profit margins of ultra-longhaul flights into central and south Asia that would seem to be the target, not to mention the consumer benefit questions that many are asking about the indemnified transatlantic joint ventures.
5) Keep Getting Rid of the Old Aircraft
United has an awful lot of elderly aircraft, from the 747-400 fleet through the 757, 767, A320, 777 and A319 fleets — all of which average over 15 years old, and hit 20 in the case of the 747s.
But it’s not just replacing the decrepit mainline fleet. United has been working admirably to invest heavily in larger regional jets like the Embraer E170 family, which are a huge leap forward compared with both the old regional jets and the airline’s mainline narrowbodies.
There’s a major fleet renewal coming, but it’s long overdue, and there are questions about the passenger experience products — in particular the premium seats — that United is offering on its new and existing aircraft.
6) Kill Global First
There’s no reason for United to have a Global First product right now or in the near to longterm future. The trend is clear among the competition, and there’s very little soft product difference between BusinessFirst and Global First anyway.
The hard product is aging, the innovation is dead, and the concept should be too.
7) Pick a Better Business Class
United’s international business class is a mixture of terribly narrow and just okay. The unique forwards-backwards ex-United product was narrow when it was introduced and feels narrower now. The ex-Continental B/E Aerospace Diamond seats are mostly fine but are falling behind the competition and their plans.
Yes, the airline was an early proponent of fully flat beds. But British Airways created that standard — on a product that is arguably more comfortable than pre-merger United business — in the year 2000.
The standard this decade is a fully flat bed with direct aisle access, as seen on every Delta widebody and on an increasing number of American’s as the latter replaces its older angled lie-flat product.
8) Stop Making Economy Minus Suck
Yes, airline economy class tickets are among the cheapest they’ve ever been compared with inflation, and that’s one of the reasons why the seat size and proffered amenities on board come in for quite so much criticism.
Yet with the rise of hate-flying, a phrase coined by NPR to describe Spirit Airlines but in many ways applicable to other carriers, it’s hard to feel that all air travel must by definition be miserable.
Someone has to stop the US major carriers’ slide towards the self-loading cargo feeling like they’re considered actual cargo. Perhaps the former freight company CEO might do the job?
9) Double Down on Wifi
United has some of the best inflight connectivity in the US, given its ViaSat Ka-band coverage on the Boeing 737 fleet and Panasonic Ku-band on the widebodies and the Airbus A320 family.
Wifi is probably the most important factor for the generation of customers who airlines have trained to think that all economy travel is a painful experience to be endured.
With United’s decision to wrap whitelabeled ViaSat Ka and Panasonic Ku systems in its own branding, it’s vital that Munoz and his airline set passenger expectations, meet them — and that the systems just work.
10) Fix the Computers
Not working has been a problem for United’s IT systems. The airline’s much-vaunted and much-tested new website failed for hours the very same afternoon that Jeff Smisek and two senior government relations colleagues were packing their bags. Earlier this summer, United blamed an unspecified “network connectivity issue” for its entire airline grinding to a halt.
We experienced a network connectivity issue. We are working to resolve and apologize for any inconvenience.
— United (@united) July 8, 2015
With a history of merger IT woes, it would seem that fairly high on Munoz’ list should be getting someone to figure out how to keep the IT lights on.
11) Bring back the tulip
One extra item for Munoz, once he has the airline turned in the right direction: a full rework of the airline’s visual identity. United’s current branding and presentation is terrible: a mashup of the word United and the 1990s Continental globe.
The big problem is that the Continental globe doesn’t say United. It says Continental. You know what does say United? The tulip, designed by Saul Bass, the legendary creator of countless iconic symbols — including, incidentally, the Continental meatball that the 1990s globe replaced.
There’s a lot of brand equity and warm feelings towards the old United, partly because the airline business is a nostalgic one filled with rose-tinted glass-wearers, partly because the new United has been much maligned (often justly), and partly because it was just a better designed visual identity.
But even if he checks off all these items on his list, the big question remains: can Oscar Munoz repair United’s poisoned chalice before it poisons him?