United Airlines’ Problems Summed Up
June 12, 2008 · Print This Article
Portfolio.com’s business travel columnist, Joe Brancatelli, wrote an excellent article that sums up all of United Airlines’ troubles, perhaps best conveyed in its title: Worst. Airline. Ever.
He offers one of the best summaries of United’s woes in 2008:
Just 29 months removed from the longest, costliest, and least-effective bankruptcy in aviation history, the nation’s second-largest airline is once again facing a financial abyss. United’s first-quarter net loss of $537 million was more than its two main competitors combined. Last month it paid a huge premium to avoid a default on its loan covenants. Its 4 percent decline in passenger traffic in May was twice as steep as that of any of its competitors. Last week’s announcement that it would ground 100 aircraft, reduce capacity by 10 percent, and shed thousands more workers was startling given the huge contraction it already experienced while in bankruptcy. A 19-month search for a merger partner resulted in rejections from Continental Airlines and US Airways, a carrier that was desperate to sell itself to United just eight years ago. The airline’s shares slid into single digits last week from a 52-week high north of $50.
More importantly, he pinpoints United’s failing performances to its 2002 bankruptcy:
Despite a 38-month stay, hundreds of millions of dollars of employee concession, and the largest pension default in corporate history, United emerged as a fiscal and operational mess. Worse, the airline’s new chief executive, Glenn Tilton, a former oil-company executive, embraced every old, failed idea ever tried by big network carriers.
The failure of United’s executives to lead the company out of financial and performance troubles has been well observed by industry analysts and passengers, and Mr. Brancatelli offers a clear analysis of the airline’s failing strategy:
Instead of a simple, cost-effective and passenger-friendly roster of in-flight services and streamlined fleet operations, United left bankruptcy in February 2006 with 26 separate in-flight seat configurations. It dabbled in everything from the upmarket P.S. to the downmarket Ted. It had five types of narrow-body jets, four types of wide-body aircraft and eight flavors of regional jets. Travelers were confronted with flights outfitted with an ever-shifting mix of one, two, three, or even four classes.
This strategy is part of the five-year plan of reorganization offered by Tilton and chief financial officer Frederic Brace, based on the prediction that crude oil would average $50 per barrel. According to the article, at the time this plan was announced, crude oil was already selling above $65 per barrel.
But a simple failure like that hasn’t stopped United’s executives from giving themselves handsome compensations. Like the article said:
no matter how rough the ride for United’s employees and passengers, it will continue to be smooth sailing in the executive suite.
Click HERE to read the entire article.
photo credit: Cubbie_n_Vegas
Why is United able to make the same mistakes over and over again?! They go in and out of bankruptcy, they shower their executives with money and perks, their service sucks and now they are on the verge of disaster yet again. I echo the article’s sentiment — worst. airline. ever.
> We are writing regarding our disabled daughter, Amy Rowlands, and her
experience in O’Hare Airport, Chicago yesterday, July 8th.
> She was travelling from Orlando to Manchester, UK, changing in O’Hare. The
United Orlando flight arrived at gate 22 at 5-29 pm leaving around an hour to
transfer from Terminal 1 to Terminal 5 for the connecting flight with BMI to
Manchester.
> When they arrived in Chicago and Amy was waiting for assistance on the plane
it became clear that United had not informed Chicago that a disabled passenger
required assisatnce on this flight. The steward phoned and asked for assistance
and eventually two girls in blue uniforms arrived and immediately began arguing
over who was going to take Amy across the airport to Terminal 5.
> The steward lost patience and began to get Amy into her chair. The remaining
girl, who Amy thinks was named Latrice, began to wheel her very slowly across
the airport telling her she was going to miss the flight anyway and that she was
going to have to get a new boarding pass.
> On the train between terminals a bag hanging on Amy’s chair got caught in the
wheel. Amy told Latrice that the wheel was coming off abd two other passengers
helped Amy untangle the bag whilst Latrice stood by doing nothing.
> On the way Latrice met several colleagues and complained to them all in front
of Amy that she didn’t want to be doing this and wanted to be going home.
> Instead of going straight to the gate for the Manchester connection Latrice
took Amy to Disablement Services and proceeded to arguw with her superior about
going home. Eventually her superior convinced Latirce that she had to take Amy
to the gate. This they did excrutiatingly slowly with Latrice haranging Amy
constantly about missing her flight and that she shouldn’t be travelling on her
own.
> When they got to the BI desk the staff asked Amy where she had been, told her
that they had been tracking her and that there should have been plenty of time
to get across the airport to catch her flight. One of the BMI staff actually
then told Amy, ‘I am telling you now, if it wasn’t for her you would have made
the flight’.
> Latrice then stood in front of Amy and stared at her ntil Amy was forced to
give her a tip.
> She was then left alone with her bags, her crutches and hand luggage. Then
three personnel dressed in green(porters?) walked past her mimicking a limp and
pulling distressed faces which they all laughed at.
> She couldn’t go anywhere because she couldn’t push her own chair and leave her
luggage which has appeared from somewhere.
> Eventually another member of staff dressed in green saw her crying (by this
time she had already phoned us and had broken down in tears) and came over to
help. His name was Ivan and he took her to several desks to see if she could get
an earlier flightas the only alternative they had offered her up to then was to
fly to Copenhagen.
> She eventually got a flight with American Airlines to Heathrow about 11-30
that night. She then had to wait 5 hours in Heathrow for a connection with BA to
Manchester.
> This all means she left Orlando about 3pm on Tuesday and arrived home at 1pm
Wednesday (Orlando time).
> To think that a lone, 20 year old female traveller can be bullied and
discriminated against in this fashion in the USA today is beyond our
comprehension.
> We have travelled to the USA from the UK over 30 times in the past 15 years or
so and up to now have loved the country and its general work for the disabled
but we are appalled and shocked by this behaviour in O’Hare airport and before
we consider further serious action we would appreciate your views on the above.
>
> Mike and Linda Rowlands
> 863 420 8981