United Airlines CEO Scott Kirby recently sat down with David Ignatius of The Washington Post. Live and Let’s Fly will examine the wide-ranging interview in a series of posts.
United CEO Claims He Always Wanted To Eliminate “Indefensible” Change Fees
Ignatius asks if the “permanent” elimination of change fees will really be permanent. Kirby responds first by saying he has wanted to eliminate change fees for 20 years, change fees were indefensible in certain contexts, and that the change is indeed permanent.
So, one of the big decisions that we made–and I think we did it in June–was to announce that we were permanently eliminating change fees, and this is a decision that I’ve wanted to make for 20 years in my career in aviation. I’ve joked, sort of joked at least, that because it’s a billion-dollar decision, you kind of have to be the CEO to make the decision. But we have permanently eliminated change fees at United, and then most of the others in the industry have followed and copied us.
It’s true that United Airlines was first among legacy carriers to eliminate change fees. But it’s also true that this happened several months into the pandemic when demand for travel was dead and airlines were desperate to stimulate future demand.
I’m not questioning whether this was a “decision” Kirby has wanted to make the last two decades, but he could have done it at America West, US Airways, American Airlines, and earlier at United Airlines, but did not. Kirby might respond that he was not CEO, but it’s only fair to note that the pandemic created the ideal conditions to experiment with the elimination of change fees. Airlines were not going to sacrifice a tremendous cash cow prior to the pandemic or they would have done so…
Kirby pointed out the incongruity in claiming an airline is “customer friendly” yet charges “indefensible” change fees:
But the point on this one is actually a bigger point, which is we’ve really tried to change how customers feel about United Airlines, and this is as much a cultural point as something that customers requested, because our employees, we put them in this position of charging change fees. And somebody has a really good reason they need to change their flight, a relative passed away or ill, and they were forced to tell that customer, “Okay. You can change your flight by a week, but we’re going to charge you $200 to do it,” and our employees knew that wasn’t right. And we forced them to defend the indefensible. And when we did that, it’s hard for them to believe when we tell them, “We want you to do the right thing for customers.” They look at you like, “Well, you don’t mean it because you make me do these things that are bad for customers.”
Good sentiment, but actions speak louder than words.
It’s bigger than just eliminating change fees, which is great for our customers, permanently, but it’s also about changing the customers–and really convincing our employees that we want them to be empowered to do the right thing for the customer. And we’ve got to knock down these obstacles–there’s others I could talk about–these obstacles and these barriers that prevent them from doing the right thing for the customer and make it hard for them to do the little things because they don’t trust us when we tell them that, and they were right to not trust the leadership team when we asked them to do those kinds of things.
Empowering employees is a whole different matter. Going back a decade, legacy United employees were much more empowered than their “by the book” Continental colleagues to bend the rules (or as Delta says, never let the rules overrule).
While I’d love to see employees empowered to waive a host of fees, United is also running a business, Kirby is known as a bean counter, and I’m not sure what “doing the right thing” will even look like, beyond the bereavement fare situation that Kirby mentioned above.
Kirby always says all the right thing. He’s deeply effective in crafting words and I appreciate that about him. But only over time will we see what “doing the right thing” really means. Only when we can look back on this pandemic as we look back on other calamities will we see if these customer-friendly changes will stick around.