United Airline history (from 1990 to 2000) - Research Paper Example

?Outline: On the History of the United Airlines from 1990 to 2000 I. On s A. United breaks guitars B. Communications strategy C. Technology II. On employees A. Blacks B. ESOP C. Supervision III. On plane A. Boeing 777 IV. On airway routes A. Domestic routes B. Heathrow airport C. Latin America V. On international market A. Star Alliance Paper: On the History of the United Airlines from 1990 to 2000 On customers United breaks guitars “And if I did [fly with you], I wouldn’t bring my luggage / ‘Cause you’d just go and break it, / Into a thousand pieces, / Just like you broke my heart” (Carroll, n.d.). This is not a love song; it is rather a sad song about a passenger’s bad experience when he boarded the plane managed by the United Airlines. The persona in the song criticizes the “complete indifference” exhibited by the flight attendants towards him. Entitled United Breaks Guitars, the music piece subtly reveals two facets in the narrative: (1) the passenger’s plight; and (2) the United employee’s lack of professionalism. First, the needs or reasonable complaints of the customers appear to be insignificant to the employees of the United Airlines. This shows the level of treatment in which the United provides its customer-passengers. And second, the United flight attendants apparently fail to behave professionally by reacting to the passenger’s plight with the heartless words “Don’t ask me.” Communications strategy Smith, Berry, and Pulford (1999), on the other hand, states that the United Airlines has been pondering on the minds of its travellers. For instance, United inquires or explores on the daily activities of its passengers and on the persons whom these customers speak to whenever they book a flight. The underlying principle here is, obviously, the end in which the United Airlines can track and attract numerous costumer-passengers. The problem, however, is that United is more concerned with obtaining and gaining a number of customers rather than in providing satisfactory services towards them. Moreover, the focus on the traveller has a drawback to the personnel who book the flight and other United employees associated to booking and travel policy. Smith et al. (1999) argue that these people (e.g., travel agents) have the capacity to “influence over the choice of airline” made by the customer-travellers. It is empirical for the travel agents, they say, to possess a much more detailed information about “routes, schedules and prices” in order to better serve their customers (Smith et al., 1999). Technology It appears that the United Airlines cares less to the passenger’s plight and more to the company’s ways of gaining more traveller-customers. Kelly (1999) writes about the United’s parallel processing technology wherein it functions as a machinery in “forecast[ing] demand” and thereby increases the company’s profit. According to a study, the United Airlines dramatically accumulates a large amount of profit from such technology by as much as $100 million per year (Kelly, 1999). Named as IBM RS/6000, the technology operates through an analysis or calculation from the given data in order to determine the passenger-demand forecast. In using this technology, United only looks and focuses on the flight “paths” of a particular travel route in contrast to its flight “legs” (Kelly, 1999). That is to say, the path that is to be analyzed or computed, from the Boston-to-Los-Angeles flight route with a stopover in Chicago, is the Boston-to-Los-Angeles path. The signifier “legs” signifies the short route (i.e., stopover) from state to state while the term “paths” refers to the ultimate destination of the passenger-traveller from one state to another. On employees Blacks The United Airlines composes employees of different colors; of the many colors, the Black stands high and bright. For one, there are numerous African Americans working in O’Hare International Airport situated in the state of Chicago. Most of them are United’s cabin service employees (“United Airlines employees,” 1995). Perhaps the reason for this sheer number of Black employees in United greatly lies on the active participation of the Black community in the said state. Before the 1990s, there was a proposal endorsed by an African American that aimed and called for the hiring of more Blacks in the United Airlines (“Collins: United Airlines,” 1987). United appears to fly in the “friendly skies.” Besides cabin services, United Airlines also employs Blacks as pilots to its planes. African American William Norwood, for one, had been a pilot in the United for over 30 years (“William Norwood,” 1996). ESOP In the mid-1990s, the United Airlines becomes the largest employee-owned enterprise all over the United States (Frisch, 2001). Several changes occurred, as a consequence, when the company entered into an ESOP agreement with its employees; such changes are fundamental ones, from top to bottom. According to Frisch, it was not easy for United -- especially at the top level of the organization -- to persuade its employees to buy the plan or scheme. The transition towards an ESOP status was a “tremendous feat” (Frisch, 2001). Moreover, the complexity of the implementation of ESOP heavily lies on the fact that there are various groups or agencies, with their different and divergent interests, who are affected by such transition; examples of which are bankers, investors, and unions. Of the groups that experience difficulties and challenges, the group of the United employees bear the burden characterized in ESOP. In fact, these employees undergo wage reductions of about twenty-five percent (Frisch, 2001). Supervision In the middle of the 1990s, the United Airlines has redefined the role of one of its employees, especially the employee-supervisor. Its function has departed from the traditional role it usually has: supervision. In fact, a United supervisor extends and expands its duty or responsibility; he or she functions as a coach to “support team members” (Gittell, 2003). Here, a supervisor is also a couch, which is traditionally held by the organization’s manager. The main objective of the redefinition made by the United Airlines is, as it seems, the company’s reduction of expenditure. United believes that supervisors are “not needed at all” (Gittell, 2003). That is to say, supervision, as part of the organizational process, within the company is not necessary; what is needed, however, is the couching or managing of the company’s employees. A United customer service manager, nevertheless, comments that “managers will not grow” if the organization has no supervisors. On plane In 1995, the United Airlines has purchased Boeing 777 aircraft from the manufacturer called Boeing Commercial Airplanes (Yenne, 2002). In May of the same year, United introduced the N777UA -- United’s name for its Boeing 777 -- representing the first customer launch of said airliner. The first commercial flight of Boeing 777 took off from the Boeing Field. United held a ceremony at Seattle’s Museum as a gesture of recognizing the new episode for the airline company. What is interesting in United’s Boeing 777 -- particularly the first of its kind -- is its colors blue and grey (see the vignette in p. 94 of Inside Boeing: Building the 777). The color of blue, on the one hand, resembles the blueness of the sky. On the other hand, the color of grey probably imitates the color of dark clouds. In its exterior structure, Boeing 777 is a jet airliner wherein it consists of two jet engines. In comparison to its body, the jet engines are quite big in size; and as it appears, N777UA has a long stretched of body -- the circumference of which seems noticeably thin. Moreover, in its interior structure, such aircraft has the seating capacity of approximately 300. It is interesting that the year in which Boeing 777 was purchased is the same year in which ESOP was fully implemented. The apparent implication here is that the decision to buy a new aircraft is made or participated by the United employees. Moreover, the choice of color design prominent in N777UA reveals a shift of thought or power within the organization. Like the decision to buy Boeing 777, perhaps the employees of the United Airlines have played an important role in changing or choosing the color of the plane. On airway routes Domestic routes United Airlines has many hubs or airport bases within the United States. Two examples of which are the O’Hare International Airport situated at Illinois and the Los Angeles International Airport located at California. The former is considered as the second busiest airport in the world whose number of airplanes that take off and land each year is approximately 970,000 (Blackwell, 2010). The latter, on the other hand, is the seventh place among the busiest airport in the globe (“Travel Los Angeles,” n.d.); this international airport is a major hub of United among other airliners. Heathrow airport In the early 1990s, the United Airlines has entered into “two major slot transactions” (Czerny, Forsyth, Gillen, & Niemeier, 2008). One of these transactions is the buying and acquiring of slots at Heathrow airport, an important airport station in the British continent. United bought the Heathrow landing rights from Pan Am with a staggering amount of ?18 million per slot (as cited in Czerny et al., 2008, p. 229). The total expenditure made by United in buying Pan Am’s Heathrow slots is $290 million. Despite the large sum of money spent in purchasing slots, such move has generated a positive impact for the United Airlines. For one, it has expanded the horizon of United; the reach of the airline company has extended to the European frontier. A spokesperson from the British Airways subtly expressed, in a negative tone, the “strong impact” to the British economy as a consequence of permitting United to own landing rights at Heathrow. Latin America Within the same decade, United Airlines has purchased the airway route from and to the Latin America. Previously owned and operated by Pan Am, United widely used the landing rights and routes from the Latin American continent. Perhaps similar to Heathrow, United was able to buy and own several slots located in Latin America due primarily to the liberalization and deregulation prominent in such historical period (i.e., 1990s). Rhoades (2008) notes that the emergence and force of the liberalized economy have created a problem for the local aircraft carriers (e.g., LAN-Chile) of or from the Latin America. Conversely, in opening the Latin American markets, foreign investors (e.g., United) have financially gained from such global project. By and large, the 1990s was the period in which the United Airlines had broaden its reach and horizon. On international market In 1997, United Airlines has made an alliance or business cooperation with other airline companies such Air Canada and Thai Airways: Star Alliance (Tagliabue, 2007). The purpose of the Star Alliance is primarily for code-sharing among its member-allies. Code-sharing is a kind of business arrangement, particularly in the field of aviation, wherein two airline companies share the same flight. Nonetheless, one of the allies of the Star Alliance says that the function of such alliance goes farther than merely code-sharing; Star Alliance is pondering on exchanging “from aircraft to toilet paper” (as cited in Tagliabue, 2007). That is to say, a member of the alliance can utilize the facilities and/or equipments owned, operated, and managed by other member-allies. Jones (2000) states that profitability is the measure of “successful airline operations.” He seems to suggest that the main reason why airline companies such as United are engaging into alliances or business arrangements is because of the economic gain in which they can obtain from such engagement or transaction. And from such alliance, Jones (2000) notes that there occurred a positive result -- convertible to millions of dollar -- in the year 1999. Throughout the 1990s, United Airlines has made dramatic reforms. Of the most notable reforms is its entering or engaging into ESOP as a radical kind of organizational formation. With this change of organizational philosophy or practice, United has undergone tremendous alterations and conversions in viewing and exercising vital factors marked in the aviation industry. On the level of consumer, for one thing, United has seen or perceived its consumer-passengers into a “commodity” in which the organization can profit from them. Within this period, United Airlines appears to highly value the ways or processes in which its customers will attract to the airliner’s aviation services. Probably the main aim of purchasing a new aircraft such as the Boeing 777 -- which the United employees presumably participated in such decision-making -- is to gain more profit; indeed, profitability is the measure of success. The move to turn the United Airlines into an ESOP-based enterprise is quite fascinating, if not strange. This action or scheme reveals about the standing or condition of the United Airlines: into the brink of bankruptcy. Before ESOP, United engaged into slot transactions which inevitably required the company to spend millions of dollar. By and large, the span of 10 years, from 1990 to 2000, has greatly impacted the United Airlines as a company and organization. Most apparent of which is its expansion, both inward and outward. References Blackwell, E. C. (2010). Frommer’s Chicago 2011. Hoboken, NJ: Wiley. Carroll, D. United breaks guitars [Video file]. (n.d.). Retrieved from http://www.youtube.com/watch?v=5YGc4zOqozo Collins: United Airlines must hire more Blacks. (1987). Jet, 8. Czerny, A. I., Forsyth, P., Gillen, D., & Niemeier, H. M. (Eds.). (2008). Airport slots: International experiences and options for reform. Hampshire, GU: Ashgate. Frisch, R. A. (2001). ESOP: The ultimate instrument in succession planning (2nd ed.). New York, NY: John Wiley & Sons. Gittell, J. H. (2003). The southwest airlines way: Using the power of relationships to achieve high performance. New York, NY: McGraw-Hill. Jones, G. (2000). The big six: US airlines. Osceola, WI: MBI. Kelly, A. L. (1999, July 1). Working smart: Maximizing the payoff from I.T. CIO, 72. Rhoades, D. L. (2008). Evolution of international aviation: Phoenix rising (2nd ed.). Hampshire, GU: Ashgate. Smith, P. R., Berry, C., & Pulford, A. (1999). Strategic marketing communications: New ways to build and integrate communications. Pentonville, London: Kogan Page. Tagliabue, J. (1997, May 15). 5 airlines extend limits of alliances. New York Times. Retrieved from http://select.nytimes.com/gst/abstract.html?res=FA0A15FA3C5C0C768DDDAC0894DF494D81 Travel Los Angeles: From mobile reference. (n.d.). Boston, MA: MobileReference. United Airlines employees in Chicago win $12 million Illinois lottery jackpot. (1995). Jet, 8. William Norwood, United Airlines’s first black pilot, retires after 30-year career. (1996). Jet, 32. Yenne, B. (2002). Inside Boeing: Building the 777. St. Paul, MN: MBI. Read More