An Open Letter to United Airlines CEO
On September 15th United Airlines new CEO, Mr. Oscar Munoz, sent a letter outlining his expectations and priorities. He acknowledged the need to improve the travel experience. He stated the need to focus on the customer, employee collaboration with a common purpose and to leverage innovation to deliver better performance, service and products.
I am so glad to hear of your expectations and priorities. Consider some of the highest consumer complaints about the airline industry.
77% of consumers complain about uncomfortable seats/limited legroom
71% complain about added fees (e.g. baggage, seat fees etc)
67% complain about unpredictable flight delays/cancellations
62% complain about cost of airline airfare
(Source: TripAdvisor June 5, 2014)
In the same survey, consumers also acknowledged some improvements in the industry.
More streamlined check-in process - 38%
Easier booking - 36%
More streamlined security process - 32%
More streamlined boarding process - 28%
Better in-flight entertainment options - 25%
(Source: TripAdvisor June 5, 2014)
Although these are industry figures, I’m fairly certain that your airline will have its fair share of complaints and improvements in these categories.
So what can be done?
Besides building trust and credibility with your organization in your first year, almost all of the pain points relate to the current state business model. Is your business model designed to handle the volume of traffic and offer an exceptional service? To tackle these challenges, I would offer the following suggestions:
Consider leveraging your strategy and insights team to re-visit the company purpose. Is your company purpose customer centric? Is it inspirational that will motivate your employees to want to raise their game? Research led by Jim Stengel and Millward Brown shows that companies with a robust purpose have outperformed the S&P 500 by 400%. These companies have developed a purpose statement that’s anchored on the ideal of improving consumers lives. (Source: http://www.jimstengel.com/grow/research-validation/). Some of the best in class purpose statements are from Lowe’s (helping people love where they live) and LEGO (inspire and develop the builders of tomorrow).
Re-assess your business model. Can your organization identify ways to eliminate key customer pain points? I would categorize key consumer pain points into 3 specific areas: Customer experience, revenue model and organizational agility.
The focus so far has been on offering additional services via mobile devices for booking, tracking, and check-in. These are great improvements. The bigger opportunity continues to be in-flight experience starting with how much space and quality of seats. Rather than looking at this from a cost driven and plane capacity perspective, what if you looked at this from a customer and design perspective? Could there be an optimal balance where the airline is able to offer an exceptional experience and balance costs simultaneously? Could innovative design thinking offer innovative solutions?
Has the dynamic pricing model been pushed to the extreme? Based on my experience, I would not be surprised that most customers feel that they didn’t necessarily get a great deal on airfares simply because of this model. This builds lack of trust and consumers feel cheated. Adding on additional fees just adds to the lack of trust. Could there be a team to re-assess your revenue model? Within that, this could offer simplification to other areas of your business model? Over the past decade, consumers have seen a reduction in service for same levels of fares and additional fares – e.g. checked in bags, meal purchases etc. This cost driven mind-set is not customer centric.
Everyone understands when fast changing weather conditions can create operational challenges. Parts of this can be anticipated and some parts are just out of any airlines control. Is there way to provide solutions that can help manage customer expectations on what’s not in the airline’s control and importantly delight customers by pre-empting situations?
I totally understand that your first 90 days, if not your first year, will be spent in understanding the complexities of the business, building trust within the organization, putting out immediate fires etc. Having said all that, to leave a lasting legacy for your airline, if not the industry, please consider some of the opportunities I’ve listed to re-shape your company and leave a lasting legacy.
Wishing you the best in your journey!
From a fellow traveller,
Founder & CEO – Y2S Consulting