Quality Management at United Airlines
Brandon L. Smith
Keller Graduate School of Management
Dr. Kim Hunley
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 ...view middle of the document...
There are a total of 48,000 employees currently employed.
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...