Quality Management at United Airlines
Brandon L. Smith
Keller Graduate School of Management
GM 588 6/20/2012 Dr. Kim Hunley

INTRODUCTION
United Airlines is a major airline based in the United States and one of the world’s largest airlines. It was formed in 1934. It is a subsidiary of United Continental Holdings Inc. Its headquarters are located in Chicago, IL. United is a founding member of the Star Alliance, the largest alliance in the world. On October 1, 2010 United and Continental airlines merged together forming the world’s largest airline in revenue passenger miles and second largest in fleet size and destinations. “The new United will offer customers an enhanced travel experience, combining the best products and services each carrier has to offer,” (The World's Leading Airline, 2012). The airline is supposed to be the airline that customers want to fly, the airline employees want to work for and the airline shareholders want to invest in.
The key highlights of the merger are the following: * World’s most comprehensive global network, including world class international gateways to Asia, Europe, Latin America, Africa and Middle East with non-stop or one stop service from virtually anywhere in the United States * Most modern and fuel-efficient fleet and the best new aircraft order book, among U.S. network carriers * Industry-leading frequent flyer program that will provide more opportunities to earn and redeem miles worldwide * Optimal hub locations in 10 cities, including hubs in the four largest cities in the United States
As of right now the two companies still operate separately as they are waiting for a single operating certificate from the Federal Aviation Administration that will allow it to operate under a common set of manuals and procedures. As of current, United has 359 total airplanes operating in the mainline fleet as well as 296 total operating in United Express fleet. There are a total of 48,000 employees currently employed.
PROBLEM STATEMENT Customers are very valuable to all businesses because they are the ones that are making profits for a business. Customers are the ones that are buying products and paying for services therefore it is extremely important for any type of business to treat the customer as “king”. Customer loyalty comes from customers being satisfied. If customers are satisfied they buy from your company more even at times when prices tend to sway and they refer customers by spreading the good word about your company. United Airline has had many complaints about its customer service and the way its employees treat and handle their customers. Customers are complaining of rude staff and are very dissatisfied how the staff talks to their customers. If United does not step up to the plate and find a way to fix this issue more and more customers will be going to competitors and they will lose a lot of potential revenue. Southwest Airlines are one of United’s many competitors and many customers are very satisfied with Southwest not only because of their great customer service but also because of their bags fly free service. Therefore, if United keeps having such low ratings for customer satisfaction their customers will leave them. On April 4, 2012 Airline Quality Rating report was released and out of 16 domestic carriers United Airline was ranked #1 as the worst major carrier. The ranking factors used to evaluate the airlines were the following: mishandled baggage, flight delays, involuntary denied boarding and customer service. United had the worst Airline Quality Rating score among major airlines with a -1.31, with customer service as its lowest factor contributor. According to the AQR report, United had the second highest customer complaint rate in 2010 with 1.64 complaints reported per 100,000 passengers. The Business Insider rated them #2 in their worst companies in America list. Harvard Business Review reports “that if you can prevent 5% of your customers from leaving you, you can increase your bottom line profit by 25%-95%,” (Lee, 2012). 82% of lost clients go somewhere else because of customer service issues. This is a huge number that can easily go down if companies such as United find a system to resolve these issues. If customers keep complaining, and companies do not attend to their needs they will not sit around and wait; there are competitors that are more than willing to take those customers. “It costs six to seven times more to gain a new customer than to keep an existing one,” (Conklin, 2006). In today’s technology a bad experience can be spread really quickly by electronic formats such as email, instant messages and even Facebook or Twitter status. Therefore, United needs to step up to the plate and take action. The airline’s reputation suffered even more last year due to a thousand YouTube hits when Dave Carroll, posted a song and video on line, "United Breaks Guitars," after baggage handlers smashed his instrument. The posting became an Internet sensation, coming in 12th in a Time magazine ranking of the Top 50 greatest YouTube hits ever. This example shows how fast bad news can spread due to today’s technology.
LITERATURE REVIEW/ANAYLSIS
Customer service at United is said to consist of “rude or unhelpful employees, inadequate meals or cabin service, and treatment of delayed passengers” (United Airlines Performance Statistics, 2004). Each month there are new complaints that can be found on the united website stating the same complaints but by different people. United Airlines needs to implement a process that will lessen the chances of customer complaints. Customers are complaining that employees have no compassion or remorse for customer’s problems and failing to attempt to resolve their issues.
United’s customer commitment declaration states that their goal is to make every flight a positive experience for their customers. United has made 12 commitments to their customers that include the following: offer the lowest available fare, notify customers of known delays, cancellations and diversions, deliver baggage on time, allow reservations to be cancelled for a certain period after purchase, provide prompt ticket refunds, properly accommodate passengers with disabilities and other special needs, meet customers’ essential needs during lengthy tarmac delays, treat passengers fairly and consistently in the case of over sales, disclose travel itinerary, cancellation policies, frequent flyer rules and aircraft configuration, encourage good customer service from code share partners, ensure customer responsiveness to customer complaints and provide services to mitigate inconvenience resulting from cancellations and misconnections. Customers want assurance that these commitments are the real deal. So far, United has not been true to all these commitments and needs to go back and find when and why these commitments are not met and why so many customers feel that way.
Back in May 1997, United launched a $125 multi-media advertising campaign called rising which made a commitment to significantly improving customer service to meet air travelers’ expectations. It was supposed to tell their customers “that they are working hard to improve their products and services to meet their needs,” (Greenwald, 1997). Even with this promise, United failed to meet its customer’s expectations. United has acknowledged previously that its customer service has fallen short of the mark desired by its top business travelers. The previous company CEO was shocked at the depth of the dissatisfaction discovered. After the discovery was made, United had developed a new service philosophy called the customer satisfaction philosophy or CSP in order to try and reduce the amount of complaints. All of United’s service enhancements, employee training programs and customer communication have been based on this philosophy.
The CSP resembles the voice of the customer. United has to pay more attention to the voice of the customer because this practice can define quality and superior value for them. Meeting customer needs requires those needs to be understood. Based on the amount of complaints United gets about its employees, it seems like their employees do not understand those needs. United lacks in building relationship with its customers through commitments and following up on transactions. Customers do not find United Airlines reliable because they do not respond to customers’ needs how customers want to be responded to. When customers call in stating that their luggage is lost, the employees do not show empathy to them. The employees are not responsive. United has to encourage their employees to be positive and treat customers the way they would want to be treated. United has to find out why these employees are being rude to their customers. A couple of questions United needs to ask are: Are employees not happy with the company benefits or are the employees not happy with the company? If United finds answers to these questions then they will have happy employees which lead to happy and satisfied customers.
United should implement their competitors hiring process of its employees. Southwest Airlines includes the customers in their hiring process. This is a great example of a company listening to the voice of the customer. By having customers are in the room during the interviewing process, lets the company find what the customer’s needs are. In 2010, Southwest Airlines was named Favorite Domestic Airline and was recognized as having the friendliest flight attendants and crew in a poll by Smarter Travel readers. These results show that Southwest listens to their customers and implement their ideas in its operations. “By focusing on what customers find valuable and removing or reducing what they find annoying, United could accumulate financial success and customer loyalty,” (Kelley).

Another solution to United can be to implement a stronger Total Quality Management model. “In a TQM effort, all members of an organization participate in improving processes, products, services and the culture in which they work in,” (Total Quality Management, 2012). Companies that use the TQM to improve its customer satisfaction are sensitive to customer requirements and respond to them quickly. “In the TQM context, being sensitive to customer requirements goes beyond defect and error reduction, and merely meeting specifications or reducing customer complaints,” (Stark, 1988). TQM aims at identifying and eliminating problems in work processes and systems. United can use the TQM model to improve customer satisfaction by following up with customers, finding a better way to help customers switch flights when customers flights have been canceled and finding a better process to deal with lost luggage, and improve communication skills of individual employees. To make sure that all parts of the organization are functioning well, companies use various quantitative measures and those measures are used to determine if improvements are occurring. When improvements have been made, then the company has found a successful solution if not then the company has to look for a different solution. Either way, the TQM model consists of continuous improvements that require constant innovation and upgrades because customer’s perspectives do change.
CAUSE OF THE PROBLEM
I believe the potential root cause of the problem/issue has to do with management. There is not one company that never received a complaint against them but there is a limit to how many complaints they received. As much as you try to satisfy your customer and try to do your best not to lose that customer, there will be a customer that will be dissatisfied despite the company’s efforts and solutions. The problem occurs when a company constantly receives complaints about their customer service and has a reputation of being one of the meanest companies. The goal for companies is to reduce the number of complaints from customers but with United this happens to be the opposite. Management needs to step in and correct the problem. Top management needs to lead and get committed to finding a cause to the problem and a solution to it. “Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company, and in creating and deploying well defined systems, methods and performance measures for achieving those goals,” (Stark, 1988). Management needs to clearly identify to its employees what it expects from them. Management needs to set an example for its employees.
The morale of the company and the attitude of the service attendants have really dropped when the company was hit by the bankruptcy, the job cuts and the recent financing problems. The employees feel unsecured and discouraged. Employees at United are said to be at war with their employer. Management needs to encourage its employees in such ways as providing them with incentives, recognition or promotions. Studies show that when employees like their jobs, customers get better service and are more satisfied.
Another cause to the problem is inadequate training. Management needs to give its employees the right tools such as training in order for employees to perform their jobs correctly. United employees deal with customers face to face on a daily basis. Therefore, they need to be trained on how to properly speak to customers and how to respond to them when problems occur.
RECOMMENDATIONS
United Airlines should find a way to give customers the best possible experience, try to resolve their problems, and try to reach an alternative solution when a problem cannot be fixed. There are several ways that United can fix these issues including: provide sufficient training, empower customer service representatives, have up to date technology, hire nice people, get management on board, and use other communications platforms to engage with customers. Providing sufficient training to employees is very important because what customers say or how they say things can be a result of poor adequate training. Employees represent your company therefore it is very crucial that they get adequate training so they are prepared to communicate with customers correctly. Empowering customer service representatives can definitely improve customer service because when employees are happy they service customers better, making more customers satisfied. Since, United has had so many customer complaints against its employees they should implement a system such as Southwest has when they are hiring their employees. Customers help select the employees over at Southwest and that system has definitely had positive results for Southwest.
When management hears about that employees are rude to their customers over and over again they need to step up and come up with a solution and if no solution can be reached then they need to unfortunately fire that employee because that employee can potentially be costing them business. Management can monitor employee’s behaviors by pretending to be customers themselves. The best way to see the problem the customer sees is through the customer’s perspective. Giving employees power also can eliminate some problems. Empowering flight attendants or check-in teams decide to offer free upgrades, waive luggage check fees, adjust prices within reason, and offer free amenities such as beverages, pillows, etc. will go a long way to smoothening out the customer-service provider relationship.
United has to listen to its employees and customers, which is what Continental did. Everybody has to work together from top to down. Continental encouraged its employees to perform great customer service by providing its employees with incentives such as $100 dollars to every employee in months that Continental had the best performance among U.S. airlines. United can integrate customer service into the evaluation and compensation systems as well. United Airlines has a great chance to improve its reputation due to the merger with Continental Airlines. Even though the two companies merged together they still are operating individually. “Continental loyalists have said they fear the merged airline's customer service will slip to an inferior United standard,” (Grant, 2012). Continental was rated number three in a new J.D. Power and Associates study that showed how airlines are doing in overall customer satisfaction. The new CEO of this merger has a huge challenge to take on and find a way to assure customers that once these two companies will be under one name, the service provided to customers will be satisfactory. He has to bring the United work force to the same management level that exists with Continental and makes them successful. This is a great opportunity for the company to turn things around and learn from the mistakes that have risen at United.
REFLECTION
This paper has taught me to better understand the Voice of the Customer and TQM. I have a better knowledge on how to apply both of these methods to improve customer satisfaction in a company. I had to find a problem in a company and do research on it to find the best solutions to fix that issue. There were a number of different practices that I had to study and ultimately choose the solution that I believed was the better choice. This project will help me in my career because I have learned a lot of different practices that I can use in order to improve quality. There is so much competition out there and you have to differentiate your products and services from your competitors and by applying those practices that I have learned will definitely help me improve quality in that product or service that I am advertising. This assignment made me more prepared for finding solutions in real life company problems that are happening every day.

Works Cited

Grant, A. (2012, 08 June). Continental outshines United in airline customer satisfaction poll. Retrieved June 8, 2012, from Cleveland: http://www.cleveland.com/business/index.ssf/2012/06/continental_outshines_united_in_airline_customer_satisfaction_poll.html
Greenwald, G. (1997, May 22). Curtain To Rise On United Airlines' New 'Rising' Ad Campaign;. Retrieved June 10, 2012, from Lexisnexis: http://www.lexisnexis.com.proxy.devry.edu/hottopics/lnacademic/
Kelley, B. (n.d.). Broadcasting the Voice of the Customer. Retrieved June 13, 2012, from Business Strategy Innovation: www.business-strategy-innovation.com/Voice-of-the-Customer-White-Paper. pdf
Lee, K. (2012). Why is Customer Service so Important. Retrieved June 13, 2012, from Buzzle: http://www.buzzle.com/articles/why-is-customer-service-so-important.html
Stark, J. (1988). A few words about TQM. Retrieved June 13, 2012, from JohnStark: http://www.johnstark.com/fwtqm.html
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Total Quality Management. (2012). Retrieved June 15, 2012, from ASQ The global voice of quality: http://asq.org/learn-about-quality/total-quality-management/overview/overview.html
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