Who's your airline employee working for?
Soon, ' virtual airlines' may be the norm, where the airlines will be mere ticket sellers, and someone else will be responsible for what happens up in the sky, or when something goes wrong.
How do you feel about flying on aircraft with outsourced maintenance? The FAA has said they do not have enough people to sufficiently inspect many maintenance companies in foreign lands.
United was in the crosshairs of consumer advocate, Ralph Nader, on Friday. He penned a letter to CEO of United, Jeff Smisek, telling him that costs are not the issue -it's service that leads to revenues, and United is awful on that issue.
Dear Mr. Smisek,
Two
stories have come to public attention about your airline, which invites
some serious introspection by you and your fellow executives who make
millions of dollars a year.
The
article posed the choices: for increased services for consumers and
reduced fares; for investors to cut debt and buy back stock. There was
no indication of a cash dividend increase. Then this paragraph: "United
returned $320 million to shareholders last year through share
repurchases, and it said Thursday it could accelerate its buybacks with
extra cash flow."
Stock buybacks - really a poor use of productive
capital - are favored by executive suites as a way to elevate executive compensation compared to cash dividends.
Twenty-eight
stations at airports are affected in this round. You hope to save $2.7
million out of the pay of long-time United Airlines workers (many who
make $15 per hour and benefits) on the tarmac at dawn or dusk, and rain,
snow or shine.
Do
these two stories prod you to wonder what's going on in your monetized
mind that excludes common decency and elemental labor management
relations? Do you think that vendors' lower paid, inexperienced labor
pool is not going to cause you problems down the road?
And
does a merged airline (with Continental) planning more unproductive
stock buybacks to pile on the $320 million in 2014 have any qualms
squeezing 2,000 already hard-pressed workers with families out of $2.7
million (not to mention other similar plans, past and future),
astonishingly at a time of record profits?
Squeezing
appears to be your corporate policy tool for your passengers as well -
for example squeezing their leg room, squeezing them by innumerable fees
and penalties and squeezing their time by delays on the phone in
responding to their questions.
Why
is it that a far tighter oligopoly of domestic airlines than before
deregulation mimics each other's race to the bottom in labor and
consumer relations, instead of mimicking better practices by Southwest
Airlines with a far more consistent record of profits and no layoffs?
Does this perverse behavior also make you wonder?
Mr.
Smisek, you're pushing the envelopes in ways that reflect a power trip -
that is if you can get away with it, you will. At this point I am
reminded of the courteous UAL of the Sixties, Seventies and early
Eighties with services and attentiveness, with a fine record of domestic
maintenance standards. That history should provide you with some
contemplation about the role of top management over the years.
Consider
this advice: drop the risky outsourcing; treat your employees as
Southwest does; and stop ratcheting up the fees for baggage, changes of
reservations, etc. Unless, that is, you believe that customer backlash,
investigations by media and lawmakers and lower job gratification are
not anywhere on your horizon.
Your response is welcomed.
Sincerely,
Ralph Nader
PO Box 19312
Washington, DC 20036
Yes,
the airline industry has devolved into the customer-unfriendly
entities. However, it's not just United (get the irony of that name?)
-all of the airlines are laying off employees, outsourcing and charging
extra fees.
In January we wrote about the wisdom of United outsourcing baggage handling for all United Express flights in Denver to Simplicity
right before the holiday rush to cut costs, leading to weeks of turmoil
on the tarmac and baggage claims. The employees with Simplicity were
working for $8 an hour.
This
should not be acceptable to passengers. But we've been so drilled down
to accept diminished service when it comes to commercial aviation. Soon
there will be a generation that never knew how flying used to be, and
what has been taken away.
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