United, we fall. How not to manage your brand image in a competitive environment

Since the merger of United Airlines and Continental Airlines last year, things have not gone well for the combined entity.  In 2011, for example, the combined entity received the highest number of passenger complaints, according to the Department of Transportation.   Anecdotally, I’ve heard frequent fliers lament the good old days of Continental, where the crews were friendlier, the upgrades more generous, and the food in first class was better.


The most recent erosion of the United brand equity has occurred in Houston (former HQ of Continental) during the past few months.  Southwest Airlines applied for a City permit for construction of an international terminal at Hobby Airport to provide service to Mexico, the Caribbean, Central and South America.   For more than 40 years, all commercial international air travel went through Houston’s Bush Intercontinental Airport, one of United’s largest domestic hubs.   United launched a media onslaught citing loss of jobs, longer lines at security, and a host of other ensuing evils from international travel through Hobby. SWA retaliated in the media, through direct communications to frequent flyers, messaging at the airport, with their version of the story citing job increases, lower fares, and greater consumer choices that would result from competition.   The tone was cheeky and consumer-friendly. And the underlying message as the reminder that in every instance in which SWA has entered a new market, overall fares drop.  It’s called capitalism, which has seemed to work for the past two hundred or so years. 


This week the Houston city council granted the permit to build the Hobby international terminal—the $100M cost of which is being born borne by Southwest.   The Houston Chronicle reported United’s response:


Within hours (of the city council vote), United Airlines told employees in a bulletin that, as a result of the council vote, it would be cutting planned operations at Bush Intercontinental by 10 percent and eliminating 1,300 Houston jobs, with the first buyouts, transfers or pink slips going out in the fall. It immediately canceled planned service to Auckland, New Zealand.
The council's 16-1 vote, according to the bulletin, also puts in "significant doubt" whether United will complete a planned $700 million expansion of Terminal B at Bush Intercontinental on which it broke ground in January.


Many business people with whom I’ve spoken believe the Hobby decision provided “air cover” (pun intended) for actions United had already planned.  No one was quite sure how a potential loss of Central and South American business would impact demand to Auckland.    The PR professionals with whom I spoke this week simply shook their heads, and agreed the “neener-neener” response the day after the Council ruling was both poor timing and poor PR.   “They should have waited until the fury died down,” said one PR counsel.   “Trying to link the Hobby decision—for service that won’t start for years—to layoffs now simply defies logic.  The frequent flier isn’t stupid, and United’s true rationale is pretty evident,” said another PR pundit.  


The airline FKA Continental has already suffered body blows from the merger.  Change is tough for the employees and passengers. But United didn’t have to dig itself deeper into an image hole by taking the actions they did, when they did.


When Continental was experiencing challenges a decade ago, they launched a great branding effort,  Work Hard.  Fly Right.   This was a terrific internal/external line that captured a spirit of possibility.   As the combined entity contemplates its new branding, it should consider not only what it says, but how it delivers it—in the air and in the airwaves.