United and Continental airlines merged on October 1, 2010, claiming the same rationale of customer benefits and improved performance that are regularly used to excuse mergers in automobiles, pharmaceuticals, and every other industry.

Of course, it's a complete lie. Big companies merge with other big companies to produce the benefits of even bigger companies, like reduced competition, better ability to raise prices, and stronger management ability to drive down costs. Creating big companies has more to do with enriching the top executives and their investment banker friends that it does with producing any tangible consumer benefits.

Just think for a moment: Can you name a big merger that even worked, let alone did anything good for rank-and-users? Daimler Benz & Chrysler? AOL & Time Warner? Is the corporate software world better off because Oracle keeps buying up its competition? Ever wonder what happened to all those alternative energy startups that Big Oil companies bought and promptly buried? If you want to grasp what's going on, dip into a little Marx for a change of pace. He was often wrong and horribly misused, but corporate consolidation was a trend he foresaw a century ago, and yet our popular media reports on it with little more than the perspective of a gnat's lifetime.

Hats off to United’s new management, which seems to have done its reading and knows that it needs to at least offer lots of consumer-facing outcomes of the merger, which you can read about here. Sadly, none of them demanded the two giant airlines to merge, and all of them require money that the chronically cash-starved company (and industry) has yet to prove it can find through anything other than raising prices, lowering costs, and hoping to quiet the resulting dissatisfaction from employees and passengers with prompt Twitter replies.

So what could United do to truly establish and sustain its new brand? Here are three starter ideas:

  • Commit to a Passenger Bill of Rights. If flying on United is really going mean something different than it does on other airlines, then specify it and make it something everyone knows and can trust. Promises of more lie-flat beds and amenities in airport lounges are disjoint, throw-away bits that any airline can make, and they'll likely get obviated when the airline decides to start charging for plastic cups or access to toilets. United could define what will constitute its flying experiences and then commit the money to delivering it. This would also be a great reason to get its fliers engaged in various social media programs to develop, manage, and improve those efforts.
  • Change the Buying Equation. American's recent battles with online ticket aggregators is just the tip of the iceberg for airlines, which were among the first industries to get transformed into commodities by the Internet. There's no reason why United should allow its sole and only product to be sold on price alone, or at least on price first and foremost. The biggest airline in the world should be able to call the shots on how, where, and for what prices its tickets are sold, shouldn't it? Puny Southwest does it. Where's the new way to travel deal? Everything should be on the table -- tickets, prices, discounts, distribution, exchanges, whatever -- and it should get figured out before a single ad is run promising a "new" airline.
  • Invent a New Employee Deal. I know, I know, unions are horrible and they keep companies (like airlines) from innovating. That's another convenient lie. United should do everything it can (no, really) to reaffirm its deals with the baggage workers, flight attendants, and pilots, and then come up with a plan that involves everyone in a new, different mechanism for sharing in the success of the company. Workers are going to be the single largest problem during the 18-24 months it'll take to figure out the operational realities of the merger, so there's a huge incentive to making them into the airline's biggest asset. I have no idea how this thing would be structured, but I'd get a deal with employees before I started featuring them in glossy branding ads making promises to fliers that they have no capacity of, nor intentions of, keeping.

OK, that's what I've got. What do you think United should do?

(Image credit: Branding)

Original Post: http://www.dimbulb.net/my_weblog/2011/04/bright-lights-project-united-airlines.html

Leave a Comment