UNITED AIRLINES’ ASCENT
CEO talks about what he has learned while guiding the giant carrier
One of CEO Oscar Munoz’s focuses at United Airlines is the people-oriented aspect of success.
Oscar Munoz took over a United Airlines struggling with employee strife, customer dissatisfaction and many Houstonians bitter about losing Houstonbased Continental Airlines after its 2010 merger with the Chicago-based United.
Over the past three years, he has been methodically winning over employees and customers. He began by shoring up union contracts and investing in the traveler’s experience. But there have been some blips along the way, namely a passenger being forcibly removed from a United Express flight in 2017.
Munoz recently discussed the journey — and tips he’s learned along the way — in an interview with Texas Inc.
Q: You took the helm of United to head a turnaround. How do you feel about these efforts, and what turnaround phase is United currently in?
A: I’m delighted with the new spirit of United. Our people, 90,000 worldwide, are really beginning to feel the momentum. The journey started in 2015 with getting our folks back to trusting management and building a good rapport. That involved finishing union contracts. Our operational performance and reliability work was the next level. At the end of the day, you want a flight to arrive and depart on time. And then we’ve put together a team of folks who are really intelligent and capable and experienced in building networks, where we announced some significant growth last January. Specifically, growth in midcontinent hubs – Chicago, Denver and Houston – as key to our profitability going forward. So with that foundation, the future for us is the customer. How do we double down on our efforts over the last couple of years?
Q: What will these customer-focused efforts look like?
A: You’re going to see a steady drumbeat of announcements, whether it’s new routes, new products, new digital offerings or new tools for our employees. I want to make the customer feel good about flying with United. I want you to choose us because of who we are, what we represent as well as what we deliver to you in value, product and timeliness. But it can’t just be about making money. We are aiming to be, and have been, not only a profitable company but one with principle.
Q: What’s the biggest thing you’ve learned about leadership at United and from previous jobs?
A: You always start with the people, especially in this business. We are so people-to-people centric. You interact with us when you check in, when you board the aircraft, when you deplane. So getting our people aligned on the mission, getting
our people motivated and energized to provide the kind of service that we expect, is always a start. How do you get them? You build trust and mutual respect. And, to a degree, one of my biggest leadership axioms is about generosity. How do you give of yourself to everyone? This is a 24-7 business. I can’t tell you here, in Houston, how many times I’ve been out in the hangars in the middle of the night because that’s when people work. How you treat people, how you respect them, how you listen to them has been such a critical part of our turnaround. And none of that requires a lot of capital outlay, or financial outlay, but it does require a lot of human outlay.
Q: What’s been the biggest mistake you’ve made as CEO of United?
A: In general, you look back and say, ‘I would have done this quicker or sooner.’ Sometimes we wait too long to do certain things. Our policies and procedures over time had become very rigid. We’re an operational company. Our topmost objective is your safety and your security. This requires policies and procedures and rules. We let those policies and procedures get in the way of good human caring. We knew that, I knew that, and we had a couple of PR incidents that related to that. And it has been a catalyst for us. So we’ve taken 84,000 separate policies and procedures, shrunk them down to a few thousands. Automated them. Made them more web-friendly.
Q: You mention PR incidents. Has United been able to move past such incidents and change the dialogue?
A: Frankly, I never want to forget it. I never want our people to forget it. Because that’s what can happen to us if we don’t pay attention to things that are important. And so it’s certainly fading, and there are infinitely more positive stories about United. People are beginning to see who we are and what we do. But at the same time when those issues come up, I don’t shy away from them. Haters are going to hate. People will always use that against you because it’s an easy shot. But again, it was an accelerant and a motivator for us to really kick our customer-centricity into high gear.
Q: What kind of toll does it take on your personal life to be in the spotlight so much?
A: It is energy sapping. I’m all over the world half the time, as is a lot of our team. But there’s nothing like walking around an airport saying hi to folks. It’s literally, for me, a battery charger. As soon as you engage with folks, they’re so excited to see you. You see the smiles light up. The way I look at it, if I get to energize them, that’s going to feed back to you as a customer.
Q: Why have you put such a strong focus on hiring? And how have you attracted people to United, sometimes luring them away from another airline?
A: Most people in the industry realized that the United opportunity was a good one. That this United network was the best crown jewel, but it was an unsolvable puzzle. So by hook and by crook, we were able to attract the right people and convince them that this was a good place. And it’s been great to watch them work. A leader’s role is to harness the energy around him or her. This United puzzle wasn’t going to be solved by just anyone. I had to get the best of the best.
Q: Aviation has been growing rapidly for many years. Do you expect this to continue?
A: The growth will continue. It may not be as heated. There may be economic downturns that affect it to some degree. Some level of cyclicality. But the base just keeps getting bigger and bigger. And we are connecting people more often. We are making our own volume and not relying necessarily just on economic tides to bring us in and out. Houston is a great hub, and if you live in Houston you have a lot of opportunities. But there’s a lot of people around Houston, two or three hours away, that will connect through here. The more connectivity that we make to that, the more people we fly.
Q: How are people adapting to Basic Economy, your lowerfare option that doesn’t allow full-size carry-on luggage, among other restrictions?
A: We had an initial phase where it was a big change, and I think a lot of our customers struggled or didn’t know what they were buying necessarily. We have definitely passed that point. And it’s working great in the fact that it gives our customers choice. So you mentioned a couple of airlines, well, most people would rather fly someone like United, so we want to give them a price point that’s comparable. And Basic Economy means we don’t have to bring the price point for the entire aircraft down, which I know sounds self-serving. But in this business we operate on very thin margins. Making enough money to keep going forward, reinvesting in the product that you fly, is great. So it’s helping us with maintaining the rest of our cabin for the people who want to choose to fly regular coach or Economy Plus or up in the front. It’s just nice to have all of those segments inside one aircraft.
Q: And on the other end of the plane, why are you investing heavily in your business-class experience with the new Polaris seats and lounges?
A: If you think of the cities we operate in as our hubs, those are the strongest, biggest business cities: New York, Los Angeles, San Francisco, Chicago, Houston (Denver is probably not as big of a business city). The people who are in those cities have a high business interest. Back to this listening concept and understanding your facts, demographics, markets and customers, we have very business-centric hubs, which is why we tend to continue to focus on them, as well as our other classes.