Nov. 24–Former United Airlines CEO Jeff Smisek was that guy who stands in the aisle during boarding, blocking others from going anywhere because he has more unchecked baggage with him than he can manage.
As appalling as it is that he’s apparently getting at least $8.4 million in severance pay, the real shame may prove to be that no one got Smisek to sit down sooner.
It’s too soon to make sweeping assessments about where United is headed, and it may reflect how poor things have been, but there are indeed promising signs.
United might actually be becoming nimbler and nicer since Smisek bailed abruptly around Labor Day amid federal and internal investigations into dealings with the New York and New Jersey Port Authority.
A very big eye opener came late Friday. The airline reached an agreement in principle on a contract extension with the Air Line Pilots Association, which reps its 12,000 pilots, more than a year ahead of schedule and after fewer than 30 days of negotiation.
Details aren’t yet public, and the deal still must be formally approved by the union. But in its loveless five-year marriage with Continental, which Smisek helped arrange, United has been hard-pressed to do anything early.
Not labor deals. Not arrivals. Not departures.
There have been few rhapsodies, but plenty of the blues.
The airline’s performance, employee morale and customer satisfaction all deteriorated amid deep cuts and contentious labor stances, despite Smisek’s insistence in videos shown onboard that all was hunky-dory.
United has come to realize that even the coffee, which was noticeably downgraded in quality to save a little during Smisek’s reign, required an upgrade. Last week, it said it’s switching to Italy’s Illy brand.
That United comes across as determined to finish 2015 at least trying to sow seeds of optimism is all the more remarkable — and unflattering to Smisek, who nonetheless stands to more than double his exit payout should the company hit certain performance benchmarks — because airline leadership has had to vamp.
Smisek’s sudden, unscheduled departure came in the wake of the airline scheduling money-losing flights seemingly intended to curry favor with a former Port Authority chairman.
So Smisek wasn’t completely uninterested in customer satisfaction. But if you weren’t that one customer, tough.
Oscar Munoz, a railroad executive and member of the United board that sanctioned the way Smisek ran things in part because the airline realized record profits as the quality cratered, was quickly named Smisek’s successor.
“I certainly could have been more aware of some of this,” Munoz said, allowing that United’s growing market cap and improved financial viability may have blinded him and others to what was happening at the operations level.
The son of a union meat cutter, Munoz spoke of how dignity and respect go a long way when dealing with organized labor and how improving the customer experience would pay off in the end.
But as he acknowledged the overdue need to win back trust and pledged to reunite United, he suffered a heart attack.
The airline’s flat-footed response to the new crisis did little to inspire confidence even when it finally named Bret Hart, its chief counsel, temporary CEO until Munoz’s expected return early next year.
Changes both in attitude and operations already seem to be kicking in, however.
In October, United racked up its best on-time performance in recent years, a 10 percent improvement from October 2014. Also, the airline announced a tentative agreement with Teamsters-represented technicians.
Meanwhile, although Smisek never got the 24,000 United and Continental flight attendants under a joint contract, the airline is in mediated negotiations to do so.
Plus, the airline is beginning expedited contract negotiations more than a year early with the machinists union representing nearly 30,000 workers, including baggage handlers, and gate and reservation agents. As an opening, United said it wouldn’t outsource the union’s jobs for the next three-plus years.
On the customer front, United ditched a $50 fee it charged anyone who sought a hardship refund on nonrefundable tickets because of a passenger death, illness or jury duty.
That’s right. It took new leadership to realize United might not want to keep $50 from a mourning family.
It wasn’t just the coffee that left a bad taste in people’s mouths under Smisek. A few million to get him out the door may turn out to be a bargain.
Aviation Pros
