Seat 2B By Joe Brancatelli
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At United, Meet the New Boss, Same As the Old Boss
September 17, 2015 -- United Airlines hired a new intern last week and on Tuesday he wrote to tens of millions of members of the MileagePlus program. He promised to learn all about running airlines, promoting teamwork and satisfying customers. The problem? The new intern is Oscar Munoz and he's the boss of the joint, hired in a panic to run the listing carrier that trails the industry in virtually all financial, operational and customer-satisfaction metrics. It's never wise to judge a hire, intern or chief executive, on first impressions. It's certainly not smart to make major pronouncements about the future of a stumbling airline based on a born-to-be-bland, platitude-packed first communiqué between the new leader and a disaffected customer base. But United (NYSE: UAL) is in such trouble and the hiring of Munoz is so illuminative of everything the airline has done wrong in recent years that it's impossible not to make some dire observations and first-guess prognostications. "First," Munoz told every United flyer the airline could reach, United "must focus on our customers." And since United hasn't focused on customers for the better part of 15 years, the new CEO promised to work on it as soon as he figured out how things work. "If our performance has not met your expectations, I want you to know I'm committed to learning how to better meet your needs and desires." Good lord, kill me now. I'm all for humble CEOs who don't profess to know everything and Munoz also conceded in his first call with securities analysts last week that he really doesn't know much about United Airlines. In fact, he's about to embark on a 90-day learning tour. Yet that begs the obvious question: When the hell is United going to hire a boss who knows anything about running an airline? The 56-year-old Munoz is the third consecutive top man with little or no hands-on experience in the airline business. He's the third chief executive in succession at the airline who comes from outside the company. He's the third suit in a row with zero street cred with United's fractious airline unions, unhappy customers and dysfunctional organizations. In other words, meet the new boss, same as the old boss. Don't get fooled again. Munoz replaced Jeff Smisek, jettisoned from the emergency exit last week because he was enmeshed in a bizarre bribery/shake-down scandal involving the Port Authority of New York and New Jersey, the quasi-public agency that runs the region's major airports. Smisek had come to United as chief executive via the 2010 merger with Continental Airlines. A lawyer by training, he had little practical experience running airlines and fewer people skills. He promptly and publicly made a hash of the merger and offended both carriers' labor unions and passenger bases. Smisek himself had succeeded an airline-ignorant oil executive named Glenn Tilton. He took over United in 2002 and quickly put it into what was then the longest, most expensive and most chaotic bankruptcy in aviation history. When the shriveled carrier limped out of Chapter 11 nearly four years later, Tilton cut himself a deal so sweet that The New York Times called it " insanity squared." The airline was running so poorly that in 2008 I dubbed it " Worst. Airline. Ever." Now the newest newbie, Munoz, is being asked to figure out how to make sense of an airline that hasn't made sense for decades. Although cheap oil has made all carriers wildly profitable in the last two years, United is in dire need of fast repair.
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