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UNITED'S OWN PRIVATE IDAHO
By Joe Brancatelli
March 29, 2012 -- In my heart, I knew the United-Continental "merger of equals" would be dreary when chief executive officer Jeff Smisek refused to standardize the in-flight cabins of the carriers. But my head said shut up, no legacy carrier understands that frequent flyers value consistency and it won't be so bad if Smisek aces the airlines' computer transition.
In my heart, I knew the merger would be awful when I heard chief revenue officer Jim Compton say that it "wasn't a hard decision" to add Economy Plus to Continental's fleet--yet it took months to make the easy call and even now the retrofit is nowhere near complete. But my head said shut up, it'll all be fine if Compton understands how much United's profit depends on a smooth data transition.
In my heart, I knew we were headed for trouble when Smisek indignantly bleated about canceling flights after the government installed sensible tarmac-hold rules. But my head said shut up because Smisek was just trying on his big-boy pants, he'd never do what he said--and it wouldn't matter as long as the computers eventually played nice.
In my heart, I knew the merger was off the rails when the carrier abandoned the idea of creating a revolutionary frequent flyer program based on frequent spending and settled for incremental change that perpetrated the fantasy that 25,000 miles somehow made you "elite" on the world's largest airline. But my head said shut up, the data conversion is coming and that'll be the make-or-break moment for frequent flyers.
So now we're almost a month into the switch of legacy United onto the computer system that powered legacy Continental and how are you liking this merger now?
That's a rhetorical question, of course, because this merger was never about us. Airlines mergers in general (and United-Continental in particular) are always about wannabe SkyGods creating their own private Idahos of fantasy cost efficiencies, massive reductions in employee headcounts and big power and bigger payouts for themselves.
But United's own private Idaho is a uniquely peculiar place. The "sense of arrogance" (one analyst's assessment) in the United C-suite is palpable now. And, as the boss of one of United's most important partners told me last week, "These guys think their 1K and GS flyers have no options. That's why they think they can get away with what's going on."
Look, we can talk some more about the offensive hold times to reach United on the phone. We can talk some more about the massively broken upgrade process, which is all that keeps high-value elite flyers loyal to an airline in the first place. We can talk about the missing seat assignments, the dreaded "red messages," the whack-a-mole game you have to play with United.com or the totally predictable first-weekend meltdowns at O'Hare and Dulles. We can talk about missing flight credits or the bad training that legacy United personnel got on the Continental software. We can even talk about little things like how no one told legacy Red Carpet Club members that, since their MileagePlus numbers were changing, they'd have to carry their membership cards again if they hoped to get into the United Club without 15 minutes of bureaucratic kerfuffle.
But why bother? Everything you need to know about the state of this data transition can be explained much more simply: United's executives have been in lockdown since March 3. All the heavy lifting of trying to explain away the problems has been left to low-level PR types.
Trust me, folks, when the SkyGods don't talk, when they aren't out there claiming credit for recreating the aviation universe in six days, it means that things are going badly. Much worse than you know.
And, no, it ain't over. If you keep flying United, you'll have to put up with another data transition later this year when the airline's computers gets a graphic user interface (GUI) similar to the one that existed on the junked United system. And won't it be fun when legacy United people and legacy Continental employees simultaneously have to learn a new way of working with the system?
And, oh, yeah, the SkyGods of United's own private Idaho have yet to tackle the hardest parts of the labor negotiations. Legacy Continental employees have always been split between a more compliant group based in Houston and a more militant wing out of Newark. Throw in the unhappy legacy United employees, who were brutalized by the incompetent buffoons who ran the old United, and you have a toxic mix. Smisek hasn't made any of this easier by ridiculing the aspirations of United people, either.
But the view from United's own private Idaho is that we flyers will put up with any manner of craziness because, well, where are we going to go?
So what if the new United flies a bizarre mix of legacy Continental aircraft and legacy United aircraft. Where you gonna go? So what if the new United swaps out two-cabin Continental jets for four-class United aircraft on international routes. Where you gonna go? Wanted legacy Continental's top-notch BusinessFirst product but got stuck on a plane with the outdated United business class? Where you gonna go? Your upgrade didn't clear or seat assignment disappeared and no one can fix it for you? Where you gonna go?
In United's own private Idaho, Smisek and the gang thinks it can do whatever it wants, inflict whatever pain it chooses and you'll put up with it.
Thankfully, however, the population of sheep in United's own private Idaho is fairly small. Unhappy elites from the legacy United are already finding status matches elsewhere and/or booking away. Even some legacy Continental customers, who were a mostly happy lot, are losing patience. After all, their upgrades aren't clearing, either. They're the ones stuck with the awful United planes, the disaffected United crews and the dreary former Red Carpet Clubs.
It doesn't take much to wreck a carrier's fortunes in the low-margin, low-profit world of commercial aviation. A small exodus of super-elites means the difference between black ink and red. The defection of two or three big corporate clients destroys the pre-merger babble about cost savings and revenue synergies. And don't forget that another bunch of oblivious bosses living in an earlier private Idaho at United wrecked the carrier during the "summer of hell" in 2000.
Eventually, Smisek and the other SkyGods of United's new private Idaho will get around to offering us bribes to stay. Depending on the value of the bribe and the state of the airlines we can defect to at the time, it might work. If they fix the data mess, avoid another when the GUI is introduced, sidestep the labor landmines and get real about rationalizing the incomprehensible in-flight product, they might lure us back or keep us loyal.
But one thing's for sure: It'll cost a hell of a lot more than if they'd done things right from the get-go. But SkyGods never learn from history. They're doomed to repeat it because they live in their own private Idaho and they're shocked--shocked!--to learn that we don't want to live there with them.
Normally, I'd end it right there. It's a nice kicker to say that United is living in its own private Idaho and we don't plan to live there with them.
There is one more thing, however. I think it's a terribly important thing. Why hasn't United offered the small grace notes that would have cost it nothing during this botched data transition?
Before it big-banged us into chaos on March 3, why didn't United send a manage-our-expectations E-mail? It could have been a simple message to elites: We expect things to go well, but it might take 30 days to work out the kinks. It could take 60 days for your frequent flyer accounts to mesh properly. Be patient. We promise it'll all come right.
But United sent no such note even though it would have cost the airline nothing.
And once the data transition imploded, why didn't Smisek or Compton or someone send an E-mail to the airline's elite flyers offering an apology? It could have been a simple message: We're sorry things didn't go as well as we'd hoped, but we'll get it fixed soon and we'd appreciate your patience. We know we've inconvenienced and disappointed you and we apologize.
But United has sent no such note even though it would have cost the airline nothing.
What can you make of SkyGods who won't do what's free to make customers feel better? What can you say about bosses who can't bring themselves to do what's free to make their most profitable flyers feel valued?
I guess all you can say is that these people are living in their own private Idaho. My heart and my head tell me that it's important we don't live there with them.
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ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.
THE FINE PRINT All of the opinions and material in this column are the sole property and responsibility of Joe Brancatelli. This material may not be reproduced in any form without his express written permission.
This column is Copyright © 2012 by Joe Brancatelli. JoeSentMe.com is Copyright © 2012 by Joe Brancatelli. All rights reserved.