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Posted: November 10, 2010

Creating the world’s largest airline

The marriage of United and Continental: exciting and exhausting

Robert Polk

Did you know that United and Continental Airlines only overlap in 13 markets? For two carriers that combined will make the worlds largest airline, that is just amazing.

I learned this and many more amazing, interesting, and even inspiring facts about the new combined carrier last month when Polk Majestic Travel was lucky enough to host an educational event for our clients and staff featuring a guest speaker from the new holding company for United and Continental Airlines.

I would like to offer special thanks to John Slater, Vice President of Sales in the Americas for United Continental Holdings Inc. for his time, insights, and wealth of information!

Even though I have been in the travel industry for more years than I would like to admit, and lived through the successful merger of two travel agencies into the best travel management company in the Rocky Mountain region, I had no idea just how daunting a task it would be to integrate two airlines.

When I heard that it will take 18-24 months until the two airlines are fully integrated, that sounded like a very long time. What I did not think about was the enormous nature of the details involved. Once they get through the "easy stuff"- financial reporting, human resources, payroll, email, basic office applications, telephone systems, etc.- there are much larger operating system duplications to consider:

• The accounting systems for ticketing, refunds, and exchanges are different.
• The crew and pilot scheduling systems are different.
• The reservation systems currently used by each airline are different.
• The applications used to check in passengers are duplicated. Not to mention hundreds of other airport operations as well as club lounges in airports around the world.
• They have different union contracts.
• They have different frequent flyer programs.
• They each have their own branded credit card products.
• They will have to integrate two airline fleets, including standard safety operating procedures and cabin class configuration on over 700 mainline aircraft and almost 550 aircraft from their respective regional fleets.
• Each airline has contracts in place with corporate customers that have to be renegotiated line-item by line-item. Keep in mind this is to the tune of over 3,800 contracts!

For each of these systems, products and tools, the new airline must analyze the two existing processes, decide if either of them will appropriately service the new combined company, consider alternatives that are not currently in use, select the best solution, and then, of course, implement it.

Suddenly 18-24 months doesn't sound that long at all. With so much to do, where on earth do they start?

With the traveler.

The first priority of the combined carrier is unifying the customer experience, both in-flight and in the airport. The two airlines are focused on creating "Customer Day One" targeted for sometime in the early second quarter of 2011 when the traveler's process and experience is merged fully.

This is an incredibly aggressive goal when you consider that every airport facility has to be evaluated based on lease agreements, relocating check-in counters, aligning gate locations and system wide schedules to maximize convenience for connections, baggage handling procedures...and so much more!

Overwhelmingly, I was amazed that even with the daunting tasks ahead of what will be the world's largest airline, their focus is supremely on customer service and the traveler experience.

Mr. Slater did not mince words when he said, "Being the biggest doesn't automatically make you the best!"

It was made very clear that the common focus of the new management team will be centered on creating a culture where people want to come to work. As a business owner, I can attest to the fact that employees who like what they do and the company they work for just plain treat their customers better. To that end, the combined carrier is doing everything they can to avoid labor issues with their unions and create a work environment that is fun and customer driven.

While the business is recovering, as both United and Continental announced earnings in the last quarter, they know that they have to earn each traveler every day on every flight.
Overall, I took away that the near future for the new airline will be a very exciting and challenging time for those managing and working through these complexities. I developed a great respect for the enormity of this project, and a real feeling that they are being careful and methodical about each step along the way.

It was both insightful and humbling when Mr. Slater said, "We all make very big claims about how great they we are," and added the world's largest airline plans to "under-promise and over-deliver."

I can certainly say anyone who travels has been waiting for an airline to do just that since Orville and Wilbur first took to the skies.
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Robert Polk is CEO of Polk Majestic Travel Group, Denver's largest independent travel agency. He welcomes your comments at Robert@polkmajestic.com and invites you to stay informed by subscribing to his weekly travel industry newsletter at www.polkmajestic.com.

 

Robert Polk is CEO of Polk Majestic Travel Group, Denver's largest independent travel agency. He welcomes your comments and questions at Robert@polkmajestic.com.

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