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When Worlds Collide: Watching United and Continental Come Together

posted February 27, 2012 by

When Worlds Collide: Watching United and Continental Come Together

I was somewhat bemused upon receiving an email from United Airlines informing me that my United Club membership would be suspended in March. Less than 30 days ago, I walked into the new United Club in Newark Liberty International Airport and renewed my membership for another year.

I contacted a United Club representative and explained that the email message was in conflict with my January membership renewal. I asked why the discrepancy in records occurred and she said, “We’re not sure why those emails are going out. Please disregard it.”  So I did. But in a quiet moment, I still wondered why?

Then it struck me: United and Continental won’t combine as a single carrier until March. As a result, IT systems, operating procedures, labor agreements, flight schedules and, yes, even airline club programs, still remain separate.

Bloomberg BusinessWeek gave greater insight into how the marriage of these two airlines is evolving in a February 2 piece headlined, “Making the World’s Largest Airline Fly.” As writer Drake Bennett pointed out,  “combining airlines is tremendously difficult, largely because of the enormous number of things two airlines may do differently.”

No matter how complicated the combining of fleets, technologies, systems and facilities may be, the most difficult feat is ahead – aligning people and cultures. The airline industry is littered with past examples of mergers – Delta-Northwest, and America West-US Airways come to mind – that left scores of employees jettisoned in their wake as carriers sought reorganization under Chapter 11 bankruptcy, greater efficiencies through combining operations, or by adopting new, more favorable labor agreements with their unions. Thirty-seven airlines, including United, have filed for Chapter 11 protection from creditors since 2000, according to the Air Transport Association, Washington, DC; nine have been liquidated. Over the decade of the 2000s, the ATA reports more than 160,000 airline jobs disappeared.

Difficulties in the airline industry are not lost on Gordon Bethune, CEO of Continental in the 1990s and author of From Worst to First: Behind the Scenes of Continental’s Remarkable Comeback. Having taken over a Continental that twice had been left for dead in bankruptcy – a company so despised that employees used to rip the corporate logo off their uniforms – Bethune operated with a philosophy of keeping the lines of communication open, sharing all of the news all of the time, never lying, listening well and getting the right people communicating. His practices helped transform the company into a true industry leader.

More than a decade after Bethune, his protégé, Jeff Smisek, now United’s CEO, is operating with the same philosophy. “I’m a big believer in culture, especially in a service business, and what we’re creating is a culture based on what I like to say are the two things my mommy taught me: Treat other people like you’d like to be treated, and never tell a lie,” Smisek told Fortune magazine in a 2011 interview. “You can lecture and train, but unless they really believe in who they work for and are proud of who they work for, and trust each other and trust management, you won’t get that.”

So how does this relate to my query on the United Club membership? Because change is uncertain, Bethune and Smisek both would tell us that companies must do their very best to make it easy for employees to get information, and in ways they understand and can act upon. Tell it all, all of the time. If they don’t, their people may sometimes be left without answers for customers like me when it matters.

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