United Airlines Fiasco - Service Recovery Matters



I'm a million-miler (now almost 2 million) and lifetime elite flier of United Airlines, though much of that was accrued on pre-merger Continental Airlines. I fly every week and rarely get thrown by travel hassles, and I've seen every bad action and bad actors from numerous airlines, United included. The widely-reported passenger removal incident this past week has prompted me, and many others, to offer a few observations. Frequent fliers might find this interesting. Many may not. I'm not going to spend any time translating this to larger business lessons as I usually do, except for this one maxim: Having a client-focused service posture is important for business growth. Having a client-focused service recovery posture is critical for survival. I like United Airlines because I receive numerous perks, but I feel about them the same way they feel about me -- in a given year if I don't fly a lot on United, they take away some of my perks, despite my longtime loyalty, because they subscribe to the Janet Jackson business philosophy of "What Have You Done For Me Lately?" Loyalty is measured in the present tense. So when an alternative airline with which I have only modest perks offers a flight that's far cheaper or far more convenient, I don't think twice about changing. And if United were to permanently dilute my perks, I'd find a new go-to travel partner in a hot second.

But I don't have any particular rancor toward United, nor do I think they have systemic service issues or a culture of hating customers -- though their baseline service posture has undoubtedly aimed lower than some alternatives, which the airline has acknowledged. They simply value short-term profits above the satisfaction of their living cargo (also called RASM or "revenue per available seat miles" or, sometimes, "humans"). This is their right, since they offer a service for which there are minimal viable alternatives and substitutes, and isn't uncommon in business (see: cable providers and their customer service posture).

The Sunday night incident riles me, as a frequent flier and as a businessperson, because it reflects not just poor service and poor judgment, but poor service recovery and even poorer judgment in the aftermath. Everyone and every business screws up. But what you do to recover is the true test of your corporate values. To be clear, the actions of a few idiot employees aren't necessarily representative of the whole company. And the actions of a few idiot executives reacting to the fallout from the first idiots also aren't necessarily representative of the whole company. But it does provide insights into corporate culture when the idiots at O'Hare were able to take the heinous actions they did, either without colleagues or superiors intervening, or worse, DESPITE colleagues or superiors intervening.

Here are a few reasons why the United fiasco riles me:

The airline positions this as resulting from a standard overbooking situation. It wasn't. It was a non-standard overbooking situation caused by United employees demanding seats on a full flight so they could get to their next assignment.

The passengers had seat assignments, had already boarded, and were seated when the "overbooking" situation arose. This is very very different than dealing with standby passengers or passengers awaiting seat assignments in the gate area prior to boarding. When someone (whether an employee or an elite flier with higher status) tries to secure a seat AFTER everyone else is boarded, this is by definition not overbooking. The overbooking rules should not apply.

Is there no system for United employees to reserve seats in advance, so the airline can at least get ahead of the potential overbooking and pretend for purposes of optics that it's a standard situation? If these are late-arriving United employees, doesn't the airline know where they are, know that they're running late, and know where they need to be, so it can take advance steps to avoid this confrontation?

Had the gate agents exhausted the option of placing these employees or the potentially bumped passengers, on another airline? Yes, there's a transfer cost, but it's quite small compared to the cost of the decision they made.

Federal law requires compensation for involuntary rebooking ("bumping") and the airline has the authority to sweeten the deal when they don't get enough "volunteers." Even if the gate agents didn't have the line authority, they could have escalated until they secured the approval to offer more compensation. The cost had they done the right thing is also quite small compared to the cost of the decision they made.

Whether the passenger had a "legitimate" reason to travel (apparently he's a doctor who had patients to see in the morning) or simply didn't want to deplane, the easier action would have been to take a deep breath and move on to the next person on the list. They could have even sweetened the deal for the next person, in order to shame the first person, so everyone gets what they want and the gate agents can still feel smug about it.

The airline trying to justify the overriding need for their employees to get to their next assignment is ludicrous. Who exactly makes the determination that the other passengers' needs to fly are less worthy, based on what criteria? Presumably there were a few CEOs or senior business executives with schedules to keep, candidates heading to job interviews, musicians traveling to important gigs, families with kids who have to be at school in the morning, spouses headed home for anniversary dinners, mourners heading to funerals, and so on. The airline employees' need to travel is not objectively more important than anyone else's.

The airline claims that the forcible removal of the passenger wasn't their doing; it was the transit police who took action. Of course the police offer is implicated. It's a troubling example of poor judgment by a peace officer who has confused the public with the enemy. But the airline called the police and invoked their "right" to have a passenger removed for any reason, so who actually injured the passenger during removal is only partly relevant.

The CEO's note to employees blaming the victim and claiming the gate agents "had no choice" is amateurish and really what galls me -- the mistake is bad enough, but how United handled the mistake is far worse. But I don't know which part of it is worse -- the CEO's astonishing inability to grasp the gravity of the situation; his naive belief that he could blame the victim in an internal memo without it getting leaked and creating a furor; or his obvious and stunning lack of consultation with professional PR/crisis management advisors. Sorry Oscar, you just proved you're not fit to lead the company. Finding another airline exec with comparable financial acumen and airline domain expertise is easy. But leadership requires vision, empathy, gravity, emotional intelligence, and a sense of the big picture. The knee jerk reaction to defend your team regardless of the circumstances is what we expect from junior managers. Setting an example and holding your people accountable to a higher standard is what leaders do.

It will be interesting to see how this plays out. Probably the CEO will issue a forced apology, ghost-written by an advisor hired after the fact. Many people will just move on, because you can't win against big companies. Maybe the memes and proposed boycotts will lead to the ouster of the CEO. But I'm more interested in what happens long-term. Will this change United Airlines corporate culture? Will this revive so-called "passenger bill of rights" legislation? Or maybe some other big news story will wipe this from the headlines and most people will forget. But some of us won't.

Timothy B. Corcoran is principal of Corcoran Consulting Group, with offices in New York, Charlottesville, and Sydney and a global client base. He’s a Trustee and Fellow of the College of Law Practice Management, and is a member of the Hall of Fame and past president of the Legal Marketing Association. A former CEO, Tim guides law firm and law department leaders through the profitable disruption of outdated business models. A sought-after speaker and writer, he also authors Corcoran’s Business of Law blog. Tim can be reached at Tim@BringInTim.com and +1.609.557.7311.