United Airlines CEO Denied Part Of Bonus Due To Poor Progress

The CEO of United, Oscar Munoz, will lose out on part of his bonus due to poor progress. United is focusing on improving customer satisfaction and, while improvements are being made, United missed a few performance targets. However, Munoz still took home a sizeable financial package as part of his position.

Oscar Munoz
Oscar Munoz, CEO of United, will lose out on part of his bonus. Photo: United

The customer satisfaction bonus

Many will recall one of the most infamous aviation incidents of 2017. Multiple videos showed Dr. David Dao’s brutal removal from a United Airlines aircraft. The incident was the talk of the town in online chat forums, morning news shows, and even in United’s management. At the end of the day, everyone can agree that along the line somewhere there was a breakdown that led to  an entirely avoidable incident.

In light of that, United changed a few policies in an effort to improve their corporate image. Moreover, it seems that United is trying to keep that commitment and make the proper amends. So, after the incident, United’s board changed the compensation structure for senior employees. Notably, there is now a customer service component.

United Airlines Boeing 737
United Airlines is pushing to improve their customer satisfaction. Photo: United Airlines.

United’s 2018 performance

Skift reports that Munoz won’t receive his full bonus for customer satisfaction because the goal wasn’t met. Overall, United did well financially and operationally. For 2019, they’re still on track for continuing to perform well. They’ve been flying newer planes, including all three variants of the 787, and launching a significant number of new routes.

Ultimately, United does have to work on customer satisfaction. Munoz has offered his take on a few different service operations, including returning consumer confidence in the 737 MAX. On the other hand, he’s also focused on the experience as a whole. One of Munoz’s claims is that the seats are just too small… but there’s nothing they can do about it. Except, in a way, they can… although they don’t seem eager to make those changes.

United Economy
Munoz says that seats are too small… but that he can’t really fix it. Photo: United

What United does well

United does a lot of things pretty well. They have one of the best lounge options, a solid business class cabin, and offer passengers a truly global route network that doesn’t rely entirely on shuttling passengers through a partner hub. On the other hand, United does have room for improvement.

United 787
United has one of the best global route networks. Photo: United

United customer service

Customer service has always been a thorn in United’s side. There are plenty of stories about United’s poor customer service, which is why that reputation sticks. A lot of it comes down to what people like on an aircraft. In general people like the following things:

  • Legroom
  • Wider seats
  • Free seatback entertainment
  • Overhead storage space

With new bin designs, overhead storage is becoming less of a problem. However, legroom, wider seats, and free seatback entertainment are something United can definitely improve. The only thing is, outside of expanding Polaris (that too very slowly), there really isn’t much else United is improving about the experience in the other three-quarters of the plane.

In all likelihood, this is because United is competing against the low-cost carriers for economy class passengers.

United Polaris Seat
Unlike Economy Class seats, United Polaris seats are very spacious and comfortable. Photo: United Airlines.

Overall

United does need to improve customer service, and the best way to improve customer service is to improve their onboard experience. The only problem is that the airline industry is competitive and volatile. The bottom line is United needs to do what is right from a business perspective. While improvements can be made, the likelihood is that United will answer first to their financial performance and then to passengers.

Munoz meets people
Oscar Munoz has to walk a fine line in improving the passenger experience while also maintaining a strong business model. Photo: United

But, at the end of the day, Munoz still walked away with $10.5 million pre-tax. The question is now, what will Munoz do next when it comes to improving United’s customer satisfaction?

1 comment
  1. I happen to think that tying CSR scores to CEO bonuses is a great idea. Should be implemented by all customer service based organizations, and designed to be hard to achieve, not easily manipulated.

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