United opened its newest Polaris lounge at Los Angeles International Airport (LAX) last week, so I headed on up the road to go check it out. While I was there, I was given some time to talk with CEO Oscar Munoz. We discussed a variety of things including future plans for an LAX Terminal 9 (just talking about it, nothing else to report). Toward then end of our time, I decided to ask him exactly how he plans on spending his time in 2019. He answered with three areas of focus… plus an overarching consideration of technology.
Before I get into the answer, I should note that there was background to this question. Since Oscar started, United has been in some state of crisis or change. But now, for the first time in ages, things are looking more stable for the airline. The network strategy is working, the operation is running well, and financial performance has been solid. For once, United isn’t in a crisis. That means Oscar should have more flexibility on how he chooses to spend his time, and that is why I asked the question. Here’s what he said.
Keeping People Engaged
Echoing what I’ve heard from other CEOs, Oscar first mentioned employees. A fair amount of work has already been done to improve the culture at United, and people tell me they can really feel a shift. But the room for rapid, massive improvement starts to run out as United catches up to where it should have been this whole time. That means Oscar’s employee strategy has to move into the next phase: keeping everyone engaged.
How does that happen? Well part of it is about making employees feel connected. The airline has already announced that it’s bringing in all of its flight attendants to Chicago for a unique kind of training. Assuming this goes well, it will undoubtedly expand to other workgroups. Oscar already has a rapport with the front line, so he is going to be focusing on keeping that up and improving relationships wherever possible.
The Growth Plan
Oscar said his second focus is on continuing the growth plan, but I pushed back on that. Isn’t that really the domain of President Scott Kirby and CCO Andrew Nocella? He conceded that it was, but he’s still actively involved in meetings and discussions around it. He says that he plays an important role asking and answering big questions around the implementation of the plan. This is a focus, but I didn’t get the sense it was a primary focus.
Improving the Customer Experience – Starting with Wifi
The last point of focus feels a lot more important. That is to answer this simple question:
How do we make our customers feel good about flying United?
This is a recurring theme that’s going to be a big focus for the airline in general this year. And there’s apparently a lot in progress. So what is the biggest customer pain point? Oscar did not hesitate.
He said that having good, reliable wifi across the fleet is hugely important, and that they would do a lot to be able to make sure that gets implemented. Oscar told me that there will be more announcements this year as the airline races to improve that experience.
Technology Over All
Over all of this, Oscar says that he will spend a lot of time on answering this strategic question:
How do we make digital a competitive advantage?
We’ve heard a lot about how Delta is ahead in terms of tech development… and how American is behind. But Oscar says that United has very quietly been developing all sorts of technology to make work easier. At the same time, they will either create a revenue opportunity or lower costs. He bundles all this under “relevant innovation and technology.”
What does that mean? Well, he said much of the improved operation was thanks to big technological improvements. There are also little things like allowing people to buy upgrades a few days in advance of travel that make life easier and increase revenue.
There is a lot more that has been developed along with more in development, but Oscar wouldn’t talk about them yet. It’s a competitive advantage, he says, and he didn’t want to tip his hat.
And that is how Oscar will be spending his 2019.
How’s the comittment to channel 9 going?
Only thing that differentiated UA from others.
I’d fly them more often if they still had it.
Keeping his employees engaged will be interesting. There was a euphoria after Commander Jeff was sacked that was pervasive. One could see the new enthusiasm in front-line employees throughout United.
The problem now, as Oscar knows , is “what’s next.” As a regular United FF (and 1K), one sees them all. There are some flight attendants and customer service reps that go all out, as they’re ambassadors from the airline to its customers. They make it a point to be friendly, go the extra mile and basically remind one that he or she is important to the airline (regardless of fare or status).
But on way too many United flights, the FAs do the bare minimum service, toss things out to passengers and then hide behind the curtain in first class and yammer about whatever issue of the day exists. They are there because it’s a job.
One of the best examples of customer interaction I’ve ever seen is Delta in Atlanta. Walking through one of Delta’s many concourses, I was looking for a gate. No less than three Delta employees, a CSR, a ramp guy (in his orange jacket) and a Delta supervisor walking to gate, stopped me and asked how they could help me find something. The perception was, these people cared.
That’s what United should be trying to capture!
United has been a hot mess since the mid/late 90’s. Everyone knows that. How they’ve managed to keep their heads above water all this time is what I’d like to know.
Then talking about LAX… they were once *THE* number one airline there, had quite a formidable presence. Then, as you have touched on, the butchered it. And now wanting to try and get it back? Why? Was that a case of making long term decisions with long term consequences based on short term circumstances?
United seemed to have lost its way right around the time Shuttle was created. Maybe a little after. They’ve been just sort of amorphous and lacking in direction ever since. They still have the dubious honor of having rude, surly, and apathetic employees and a reliability record that is dubious at best.
Having WiFi, airport lounges, etc is all great. But it seems to me, that these are the sort of things that should be addressed later, not sooner. Shouldn’t customer relations and employee morale come first? Make people want to fly United?
Or are we at a point in history now where service really no longer matters thanks to the effectively oligopolistic nature of the industry? There are just too few choices left, so pretty much all the airlines can get away with mediocre service.
I’d like to read your thoughts on all this.
LA as a whole is far poorer than SF Bay Area on a GDP per capita basis, and that fact must be making lots of those AA loyalists’ head explode for the fact SF was quite a bit poorer by the same metric in the mid 90s, and the 2-decade transformation has led it to zoom past LA by a fairly wide margin.
Feel free to be engaged in a multi-way dog fight for the hollywood pie while UA enjoys SF tech pie all for themselves while still being able to get a small slice out of LA
AA deploys the same mentality in NYC, and they’re 4th place in a 4-way race for the New York. Other than Texas trash commavia, no one on the planet would be shameless enough to parrot the “AA has strong 4th place showing out of New York” BS. hahahahhahha
Matt D – Mid ’90s? It goes back way longer than that. The ’80s were very difficult for the airline with the hare-brained Allegis scheme and massive labor disruption under Ferris. But in the last couple years, United has appeared to get things together. I’ve generally heard feedback from frequent fliers that employees are happier and friendlier. The operation is certainly much improved. This doesn’t mean it’ll last, but things are good right now. “Shouldn’t customer relations and employee morale come first?” That’s exactly what Oscar is saying.
As for LAX, it’s as simple as a change in management. Scott Kirby and Andrew Nocella came in and decided it was time to grow LA again. They wouldn’t have shrunk it in the first place had they been in charge.
Repeat after me: technology is not a competitive advantage.
UA was smart enough to embrace Apple from the get go. AA, at the launch of their DFW-ICN flight, went all in with Samsung phones and Android to secure that contract.
But meanwhile, DL was so desperate to suck up to Microsoft and win SEA that they forced themselves into the most useless mobile platform – Windows Phone / Windows Mobile – and saw Microsoft’s mobile strategy completely collapse beyond repair and within literally a handful of years, had to replace all of their crew/pilot equipment from Windows Phone/Mobile based to iOS based ….. all while Alaska is still king of SEA by a wide margin.
I laugh so hard at anyone who thinks embracing Windows Phone is actually “leading in IT” hahhahhahahahahhahahahah
Whatever mobile device the crew is using makes no difference to the passenger. I’m not sure how that’s relevant to the conversation. It’s not like UA is handing out iPhones to their pax.
I think DL is on iOS these days as well. Windows Phone is a dead product.
What’s Oscar’s view on a Terminal 9 for LAX?
Esteban – Oh, nothing concrete. They want it, they’re in discussions with LAWA, but there’s nothing to announce anytime soon.
Maybe if there weren’t so many damn RJ’s (76 and fewer seats) clogging the place up, that might somewhat negate the need for another terminal 9. You’ve interviewed with Patrick Smith he says that this is basically reasons one through seven of the top ten reasons why so many flights are so full, why there are so few gates, and why the waiting areas are such concourse.
He sums it up by saying what would be better and make more sense?
Twenty flights a day, half of which will be delayed, and at least three will be cancelled? Or ten flights a day (using larger aircraft) that WILL operate and operate on time”?
Cranky? What’s your take on this?
Maybe if there weren’t so many damn RJ’s (76 and fewer seats) clogging the place up, that might somewhat negate the need for another terminal 9. You’ve interviewed with Patrick Smith he says that this is basically reasons one through seven of the top ten reasons why so many flights are so late, why there are so few gates, and why the terminals are such chaos.
He sums it up by asking what would be better and make more sense?
“Twenty flights a day, half of which will be delayed, and at least three will be cancelled? Or ten flights a day (using larger aircraft) that WILL operate and operate on time”?
Cranky? What’s your take on this?
Matt D – That wouldn’t help with Terminal 9. United wants to be able to co-locate with its Star partners, so that means bringing over a ton of big airplanes, and you need more gates for that. But indeed they can upgauge aircraft today to increase capacity and they do that. But they don’t want to decrease frequency too much. From an ops perspective that helps, but travelers want frequency, and they will give their business to those who offer it.
He didn’t want to talk about revenue from Apple?
United’s flight attendants are NOT HAPPY nor engaged as the 2 work groups (Continental/United) joined together 8 years after the merger. The meeting in ORD is just another attempt by UA management to put on a happy face. The same group called all it’s International Pursers back to ORD last year for a “drink the koolaide” session while totally ignoring the work forces issues with WiFi on board, constant fly sit for hours each resulting in poor utilization of fa crews and technology that does not support them. Contract has major flaws as the union and company each express a different interpretation of the rules. A hot mess that Oscar, Scott and Inflight VP John Slater have totally ignored or have no realistic understanding of the depth of frustration from both sides and across all seniority levels.
Also fiasco with current uniform, upcoming uniform, Tumi suitcase, loss of terminal 6 at LAX (sold?) and sold terminal vacating JFK. The list goes on.
Maybe it was just because it was around the recent holidays, but on my four segments flying United those I encountered on the plane and on the ground were the most upbeat, happiest employees I’ve seen working for United in a very long time. Service on the flights (international and domestic) was very attentive, friendly, and professional. Don’t know how much of this has to do with what Oscar is implementing, but I’d love to see this type of interactions frequently!
Let’s see, baby boomers getting older so let’s take out all the moving sidewalks and put in bars to make it harder for them to get from one end of the terminal to the other to change planes. That seems like a good idea to me. NOT!
Oh and since load factors are way up we should remove seating at the gates to put in some more iPads that a few people might order $11 pretzels from. People can just line up across the hallway so you have to walk through the people in line to get to the other gates, it will be great!
I’m a Million Miler, I can’t believe how bad Newark, and Houston have gotten.
The wifi issue is outrageous. United in 2019 is far behind where Delta was in 2012. Less than half of my flights, including tech-heavy flagship routes like EWR-SFO, have operable wifi over the past year.
Yes, alone, this is a small thing, but in 2019, it’s a baseline expectation for business travelers. Fail to provide it, and companies and employees lose a lot of productivity on those flights, and suddenly the penalty of layovers seems worth it.
I have to say that 2018 for me as a 1K flyer with United was a pretty good year. Honestly, while inflight Wi-Fi is nice, I don’t hate when it is INOP. I can still get most of the work done that I need to get done without Wi-Fi. Besides a few instances with questionable customer service, I found the FA’s to be upbeat and helpful. This is the same on my short flights and regionals as well as my long haul flights (SFO-SIN and back were amazing).
My only beef with United and it wasn’t brought up with Oscar (in this interview) is regarding their home airport – ORD. I (and I don’t feel like I’m alone with this opinion) feel like ORD is neglected – equipment wise. We don’t see any Dream)liners, 737 MAX 8/9, or the 777-3ER.
It’s a silly complaint but one that causes me to scratch my head all the time as to why United wouldn’t want their hometown airport to have the latest and greatest aircraft.
I have to admit, while I won’t and don’t fly AA – I am jealous when I see that they are operating Dreamliners on the same routes that UA operates old 777-2’s and 767’s on. I know the A350 is slated for ORD (as far as I understand it), but it would be nice to start seeing some newer planes. On the plus side, I have seen more planes with true Polaris and even the new Premium Economy going out – which is nice, but it’s still an older plane.
I look forward to seeing what happens this year and the new mobile app coming soon.
Cranky, what’s your view on whether Oscar actually RUNS United? I would think that would be very hard for him to do with his limited background in the industry. Does Kirby do all the heavy lifting, and leave Munoz to try to keep everyone happy?
iahphx- Well I alluded to that in talking about his second point. I think that’s Kirby’s job. I do think Oscar’s job is to keep people happy, but that is an important role. I know Doug Parker at American has said the same thing about employee engagement being incredibly important in his role. Of course, Doug knows a lot more about the nuts and bolts than Oscar does.
Thanks for the insight. The “money part” of running an airline is so complicated these days that I wonder how much an outsider can contribute. Meanwhile, your comment begets another question: was Scott Kirby’s departure from AA detrimental to that airline? Parker and Kirby were a very successful team, dating back to America West days. Does Parker not have adequate expertise to successfully run AA without him? So far, the post-Kirby financial results at AA haven’t been fantastic. Does Kirby’s departure have anything to do with this?
iahphx – Well it’s hard to say. I think Scott was still behind a lot of the things at AA that people grumble about. I’m not sure that people would feel differently about AA today if Scott were still there. On the other hand, United would be worse off because it desperately needed his skills and knowledge. Coming from such an awful place, United could only get better. Certainly Scott is a big part of that, but American wasn’t in the same place and wouldn’t have had such a great run if Scott were still there. There are a lot of places to look. It might not be Scott but it could be that Robert just isn’t the right president to work with Doug. Or it could be a variety of other issues.
>Oscar said his second focus is on continuing the growth plan
Hey great idea, CLE to PEK would be a pretty good flight!
A_B who is totally not an airport commissioner for either of those airports.
Had no choice but to take United. On flight from Newark to Denver. Starts with an announcement that the gate changed. After walking across the entire airport and back they made the same announcement. Now of course they are checking in all carry on bags. Worse I get on plane there is not even room for my coat. Now we are sitting waiting as apparently there is a Maintenance problem. Pilot keeps telling us they are awaiting direction from Chicago. What is CHICAGO. I have flown United just 4 times in last 10 years. Each and every time except a flight to Rome Italy has been a disaster. Try to get any satisfaction and I get a I’ll spirited employee. Just a complete disaster.
Get me off this plane