Monday, April 28, 2014

United Continental Holdings is losing money, here's part of the reason why.

While most of the other major domestic airlines are turning profits, United Airlines, and their parent company United Continental Holdings, continue to post huge losses. Over the past couple of days there have been many theories as to why and how United continues to struggle in the face of an industry uptick ranging from operational issues to bad technology to rather weak hub positions.

Each of these theories undoubtedly are partially to blame for United's continued fall and there are probably many other reasons (including inclement weather) that explain the rest. From my perspective however there is one major flaw that United continues to make for which management does not seem to have any desire to fix. To explain, allow me a moment to tell a story that is illustrative and also has the benefit of being 100% true.

Last week a co-worker and I flew on a RT itinerary to Phoenix from Houston for a business conference. Since I still have Gold Premier status with United I booked his ticket at the same time as mine. This allowed him to select Econ+ at the time of purchase as my travel companion.

On the first leg all was well, I was sitting in 8D and my co-worker in 8F as we selected. Amazingly, the flight left on-time, we had no issues, the In-flight entertainment worked and we arrived in PHX slightly ahead of schedule. So far so good.

The problems started on the return leg. First off let me say that on Tuesday morning before we flew out of IAH, I logged on to United.com and we verified both our flight status on Tuesday afternoon and our seat selection for both legs of the trip. As I stated earlier for the out-bound leg nothing was amiss, neither was there any indication that, on Tuesday AM, anything had been "adjusted" on our Friday return leg. When selecting seats for the return leg, I had placed myself in 12D and my co-worker in 12F, basically the same seating configuration as the first leg only a few rows back. Our check of this on Tuesday AM revealed this was still the case. The problems started when I got my automatic check-in e-mail on Thursday morning. (our return flight was scheduled for Friday AM)

I realized we were in trouble when my boarding pass had my seat listed as 11E. That's still econ+ but it's a middle seat which, as anyone will tell you, is very inferior to either an aisle or a window seat.  Fortunately, I was able to re-seat myself in 12C which allowed me to keep an aisle seat.

My co-worker was not so lucky. Upon check-in we included ourselves in the Complementary Premier Upgrade (CPU) list. Because of this our travel agendas were severed.  Now on his own, and no longer tethered to my agenda, my co-worker was kicked out of econ+ and placed in 15F which, in this plane's configuration, is a horrible seat in front of an exit row and will not recline.  Not only did he lose the extra leg room, but he was placed in one of the worst economy seats on the plane.

Before we go further, I understand that there are many different reasons that an airline might need to make a change to a seating arrangement. In this case, it appeared to be an equipment change from a 738 to a 739.  What I don't understand is this:  How can United make changes to an itinerary and provide no notification that they are doing so?  How can you have a computer system that can't keep track of booking details through a mess of changes? And how can you have such a disinterested customer service leadership team to not realize that items such as these are bigger issues than even flight delays?

At minimum we should have been notified earlier than check-in that there was a change. In fact, we should have been notified when the change was made so we could have a chance to react. I say that these snafus are worse than delays because the onus of fixing them lies entirely with the customer. If you're delayed and miss a connection, the airline will automatically re-seat you on the next available flight. Granted, you will still probably have to do some work because the "next available flight" will probably be on the next day.

The problem is, United doesn't even seem to care that they're creating an inconvenience for the customer. Both my co-worker and I took to Twitter where we were engaged by United Customer Service. Normally, this is one of the better CS outlets for the airline. In this case however, the Twitter CS agent belittled my co-worker by suggesting that he "shouldn't have been in Econ+ in the first place" because his "status changed" from when we booked the flights back in February until now.

This was, of course, false. What had changed was that United's computer system did not properly track his status as my travel companion when it split the itineraries and he was forcefully removed from Econ+. When he explained that to the Twitter rep the response was that "your ticket isn't marked with that so there's nothing I can do."  And that's it. No apology, no offer of compensation, nothing. Just a sit on the plane and be happy about it. At least the Twitter CS agent that I corresponded with offered up a "sorry".

To me, this is the crux of the problem for United, they don't care about their customers. They also don't care about their Premier customers or doing anything to make the program worthwhile. If you've flown United of late, you may or may not have noticed that over 50% of passengers are lining up in the queue for boarding group 2. Premier check-in if frequently more crowded, and slower, than regular economy check-in.  At PHX I and my co-worker went through the regular line b/c the Premier line was so congested. I've said this several times before and I'll say it again: If everyone is Premier then no-one is Premier.

United is a company whose customer service culture is rotting, and it's certainly coming from the top. I've seen it suggested that it's possibly time for CEO Jeff Smisek and his team to be shown the door. I'm glad to see it because I've thought this for a while now. If United can't do a better job taking care of ALL of it's customers (and not just the ones in the premium cabins) then they're going to continue to suffer at the hands of their competitors who are. I'm not suggesting a return to the "good old days" of stale peanuts in coach and luxury seats. I understand that SlimLine seats are the future despite them being butt-numbingly uncomfortable. I also don't mind not having a snack, I don't mind IFE going away and being replaced by WiFi.

What I do mind is being treated as an inconvenience by an airline who has failed to provide the service that I paid for, whose computer system cannot keep track of itinerary details when changes occur, and whose attitude is that they have no responsibility to notify me when major changes are made to my trip plan. I also mind lip-service around how I'm valued as a Premier when the actions don't back it up.

United is struggling because people are choosing to shop the competition and they are finding UA to be way behind in almost all areas.