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Editorial: United Airlines: Brand on life support

Posted: Fri Apr 14, 2017
by bimjim ... 0002313751

Editorial: United Airlines: Brand on life support
Karen Walker
Apr 14, 2017

Explaining why it took him two days to issue a full apology for the bumped passenger incident that shocked the world, United Airlines CEO Oscar Munoz said he was waiting for the facts. One fact should have been immediately clear; the brand was in grave danger.

A CEO has multiple responsibilities, among them the company’s employees, customers, investors and brand. In a service industry, your brand is the business. And, as airlines – especially the consolidated US carriers - increasingly stress to regulators, they are in the service industry and should be treated like other consumer companies. When they are not constrained by unnecessary regulatory interference, airlines are free to serve their customers better by building flexible, innovative and competitive business models.

The United incident, and the highly damaging video that consumed social media and TV screens, dealt a huge blow not just to the United brand, but to the wider industry’s reputation. Many passengers, already skeptical of airline customer service, have lost trust that they will be treated right without new laws to make airlines behave.

Munoz’s belated response has therefore opened the door for potential consumer regulation that, like the US tarmac delay fines, could be costly, restrictive and harmful to all airlines.

Awful as the United incident was, Munoz could have helped contain and lessen the damage had he immediately expressed dismay, apologized, showed concern for those directly involved and promised a full review. That would not have pointed blame at anyone and the fact-finding mission could have begun behind the scenes. But Munoz’s delayed, initially lukewarm and contradictory statements only further enraged the public.

The resulting anger and ridicule that rained down on United was predictable. Tragically, it also made United’s employees’ work lives only more difficult. Munoz inherited a troubled company with low morale where employees often did not have the tools and support they needed to deliver good customer service. He made fixing employee morale one of his first priorities and he has been well received. Perhaps, therefore, Munoz’s initial public response was an understandable effort to protect employees. Nevertheless, it was misguided. It meant he neglected shareholders for far too long, allowing millions to be knocked off the company’s value before he released a full apology, and he seemingly forgot altogether about the brand.

United didn’t just severely damage its own brand; it handed a golden opportunity to US and international competitors to entice United customers to try their friendlier, better products. Those that do may not come back.

The United brand lies in tatters. Certainly, the carrier’s “fly the friendly skies” slogan must be dropped; maybe the United name too? There is, after all, an airline brand that did a remarkable turnaround, gained a reputation for great customer service, and which is retained in United’s holding company name. Continental.