Greenberg: United 'One Sick Bird'
NEW YORK (TheStreet) -- The "One Sick Bird" in that headline, regarding United Continental Holdings (UAL - Get Report), is straight out of a headline in today's Wall Street Journal, which refers to the airline as "one sick bird."
I fly United monthly from San Diego to New York. I have Gold status. I generally sit in first class, which means I should see the airline at its best.
What I see is an airline that offers zero consistency in product, morale or service.
And this is four years after the two airlines merged. Yet, as the Journal points out, they still haven't merged their fleets because they can't get the flight attendants to sign a new, joint contract. (Compare that with Delta (DAL), which somehow not only managed to rapidly merge two airlines, but do it swiftly and almost seamlessly.)
In the Journal piece, United CEO Jeff Smisek, who hit my list of nominees last year for Worst CEO, put the blame everywhere but at his office. He said, notably:
--"Every hub has to earn its keep every day. Nothing is sacrosanct at any hub. We will make adjustments as are appropriate." (Imagine trying to tell that to communities that rely on United for service. No, United isn't running a charity to lose money at hubs that can't support the service, but his words lacked empathy, which may explain why the merger has been so rocky. Mergers need a leader employees and customers want to follow, not fight. Gordon Bethune, the ex-Continental CEO, was the epitome of that.)
--The Chicago-based company has hired consultants McKinsey & Co. and Boston Consulting Group to help smooth things out. (Not one, but two consulting firms. Should -- sarcasm alert! -- work wonders with costs.)
--"What the Street wants -- and it's a legitimate desire -- is for our inflection and takeoff be steeper than Delta's was." (Smisek needs to be careful about focusing too much on Wall Street at the expense of employees and customers. Alienate the later, and the former will ultimately follow -- in the wrong direction.)
Meanwhile, the reality of United is apparent to those who fly it daily.
--Product: There is a total lack of consistency. My flight to New York a week ago Sunday, for example, was on an ancient pre-merger Continental 737-900, with that old jet look and feel. But it had Direct TV and wi-fi (which worked quite well after the crew restarted the entire system three times.) My last flight, on Friday, was on a shiny new two-month old 737-900 -- so new it still had that new jet smell. It was originally ordered before the merger, and had no TV or wifi.)
--Morale: In general, United's rank-and-file are just not a happy group of campers. It's rare for the cockpit crew to welcome you aboard. And that defiant tone tends to spread to the cabin crew. There are exceptions, of course, but with the amount of flying I do I have a clue. And it doesn't matter whether the jet is being run by pre-merger Continental or United crews. They're equally disengaged. Gate crews, not so much, in fact, as a whole they tend to have learned the power of a smile.
--Service: It's hit and miss, no doubt impacted by morale. You can't help but give many employees high marks, in general, for trying. Some, no doubt, like their jobs better than others. (I think for many of them, it's a DNA thing. They're just happy people.)
Reality: In the end, all we really care about is getting there safely and as close to on time as possible. Let's hope maintenance cuts don't sacrifice that. It would appear leadership remains United's biggest issue. If the guy who orchestrated the merger can't get it right four years after the fact, it's time for a new guy (or girl.) Certainly a new person.
-- Written by Herb Greenberg in San Diego