Introduction
United Airlines is the largest American airline and third largest globally that operates locally and internationally. United Airlines was founded by William Boeing in 1916 when he started the airplane business and was called as Boeing Airplane Company. In 1919, Boeing achieved the first postal delivery and established United Aircraft Corp. in 1928. Boeing merged his airline company with Pratt and Whitney to form United Aircraft and Transport Corporation (UATC), which acquired the first passenger carrier in 1929, the first mail service. UATC later began United Airlines in 1931 that managed its airline subsidiaries, thus making it a historic airline in the United States.
In 1930, an Air Mail scandal led to a ban of manufacturers and ownership of airlines following the Air Mail act of 1934. In 1933, seven people on board were killed by Boeing 247 that exploded in mid-air due to a nitroglycerin bomb in the baggage hold. United-trained crews also modified airplanes to use a bomb and transported materials and passengers during the world war. In 1955, 39 passengers and five crew members were killed on board after their United Airlines Flight 629 was bombed mid-air from Denver heading to Portland, which after investigation, Jack Graham planted the bomb.
In 1973, President Richard Nixon flew aboard a United DC-10 from Washington to Los Angeles, thus making United Airlines the only airline to have operated Executive. In 2010, UAL Corp. changed its name to United Continental Holdings, and continental airlines agreed to combine operations and merged airline operations and operated under a single certificate from Federal Aviation Administration in 2011.
Organization Leadership
Since the merger of UAL and continental in 2010, United Airlines has faced challenges. Other companies reported growth, but UA said an economic downfall due to poor leadership and managerial styles. When he stepped as a new CEO in 2014, Oscar Munoz faced many challenges. The conditions that caused the downfall of United Airlines had simmered within for an extended period unaddressed. Oscar encountered difficulties like lack of morale among the workers, information technologies had issues, and outsourcing. Scandals within the airline came into being due to poor management methods that failed to involve the employees in decision making and weak Executive permitted to function for an extended period.
The organizations had weak leadership and corporate culture. This incurred the organization into financial loss. Leaders need to be a good example so that the followers in the organization can learn through observation. Organizations with weak corporate see their clients as unfair and their interests being overlooked. For an organization to transform, leaders must adopt new values. An organization must execute the experience it’s supposed to deliver to its customers.
The CEO of United Airlines has since tried to improve the way of doing in his organization. From experience, he has tried to improve from the existing situation. He talks to employees from all organization departments and listens to their grievances; he considers and tries to solve their problems, which is a motivation to the employees and improves their morale. For example, he took into consideration the issue of uniforms. Oscar engaged the workforce and recognized the necessity to hold the existing workload. He did this by lowering the responsibilities to eliminate layoffs.
The board of directors has backed the CEO to address the previous toxic culture and restore trust to employees and clients. He understands that every customer needs treatment with the highest service and dignity. This is a good decision in light of the board’s oversight role to the CEO, Executive of the company as it will reduce conflicts.
Strategies have been aside to guide the organization to realize its meaningful purpose as a solution to issues. Firstly, managers are advised to improve on their communication skills to reduce incidences like layoffs to their workers. Workers are supposed to understand the goals of the company and the actions required of them to realize these goals. Leaders should also use their powers to persuade the staff to work and demonstrate dedication to the well-being of the team.
Employees should have the right to express themselves. On the other side, managers should encourage the employees to further professional and personal development as a means to help them build a relationship with the organization. Promotions and teamwork are also a way of motivating workers, reducing actions that may disturb the working process. Employee satisfaction solves disputes.
Like any other industry, the company faced severe challenges during the pandemic, including economic destruction due to restriction measures. During the three years of the pandemic, United Airlines put financial balance measures that prevented the airline from losing.
Due to movement restrictions, the airline found it hard to pay all its employees. Therefore, it had to send home some workers, as others were furloughed and announced downsizing since its aid with the federal was expiring in 2021. The company got a boost from the government, where they received about $41 billion to bring back furloughed employees.
The airline has not changed the leadership as the president, and the CEOs have maintained their positions. The Executive has not allowed for recalling of the employee. The airline recalled their employees who had only received complete vaccination as they wanted to operate fully since the government has decided to relax on some of the COVID-19 restrictions.
Leadership is the vital management function that helps direct the organization’s resources for improved efficiency to achieve its goals. Leaders are supposed to guide and motivate their employees to realize their mission. Regardless of the position, understanding the role of leaders can help achieve a meaningful accomplishment of the company’s objectives. Failure to do this, the company will find itself in many challenges. United Airlines has found itself in this situation. Challenges like corporate culture are among the challenges that have brought the company’s progress to a standstill.
Challenges Facing United Airlines
United Airlines faces challenges that hinder it from progressing like in other sectors. Corporate culture is among the challenges that have affected the company’s progress and external factors like COVID-19, among many more.
COVID-19
Since the announcement of COVID-19, the airline sector has been among many affected industries. Movement restriction that was put to curb the spread of the virus affected the airline sector. The management had to take measures to avoid losses due to financial balance.
The airline fired over 400,000 of its workers, and others furloughed in 2021 (Gallego & Font, 2021). As if this is not enough, the airline announced to lay off its employees and downsize due to financial problems as their financial support from the federal financial aid was due to expire in 2021, left with no other means to pay them. The airline has received financial support from the government to help the sector operational.
The airline had intentions to recall their employees, but the Executive gave them a strong warning that it was temporary as the airline had not fully recovered. They used $41 billion support from the government for payrolls and $25 billion to pay their workers. In 2022, the airline recalled their employees, but the conditions were fully vaccinated. As the government relaxes its restrictions, the airline intends to operate at total capacity.
In a recent report, the airline incurred a minor quarterly loss compared to a year ago from the expected 75% of 2019 levels to 68%. The airline had foreseen profits, but the delta variant resurfaced and greatly affected the airline due to ticket cancellation. Despite the increase in COVID-19 cases, vaccination has reduced the severity. This has seen bookings for flights resume. Internal travels are slowly resuming and expecting more as it’s projected that the seriousness of customers and employees will increase due to vaccination.
Marketing challenges
United Airlines is facing stiff competition from expanding lower cost and smaller lines that will create a marketing challenge to the organization. The organization is currently facing competition from international airlines, leading to market share. In addition, the organization faces intense competition from airlines of lower costs that have impacted the airlines and incurred huge losses (Yun & Yoon, 2019). Therefore, the airline is required to face the competitors by lowering their costs as well. This will attract back their customers. There is also a need to innovate their firms to improve them, and also bring in new products can lead to an increase in the customer inflow.
Another challenge is rising fuel prices that have significantly impacted its operations. This has resulted in a reduction in flight demand. In addition to affecting its operations, the airline projected profits would be affected. An increase in fuel prices leads to a rise in airfares, which may scare away customers, involving the marketing of United Airlines. It is also projected that the future of the airline operations will as well attract marketing challenges. Fuel prices also affect the economy of the countries that the United Airlines is operational, and this will danger the firm as clients cannot afford the fees per air ticket that will be charged. The financial market gets to be affected as fuel prices go up as corporate earnings and economic activities are directly affected.
The airline has also been affected by the financial crisis. This was mainly due to the COVID-19 pandemic that led to significant losses that affected airline services in the world. It is also projected that the airline will face a further financial crisis due to the market challenge currency crisis, among other challenges that may lead to severe damages to the organization’s finances. Economic issues destabilize the operations as it lowers the morale of its employees, which can eventually lead to the public losing their trust on which the competitors will take advantage to suppress its normal operations (Gallego & Font, 2021). The financial crisis also will lead to a reduction in the income and wealth of the company.
The airline’s corporate culture is supposed to be incorporated to address future marketing challenges. These challenges will lead its competitors to take over and thus will lead to the company incurring losses. Therefore, there is a need to take opportunities that may significantly impact solving the challenges. Competitors have taken advantage to ensure they have taken charge of flights; the company, therefore, needs to develop strategic measures that will bounce them to their position in the market. Customer feedback dramatically affects the company’s well-being. There is a need for the airline to ensure good customer feedback that results in good customer services to address competition to increase its profitability and improve its growth and result in creating a positive brand image that will attract more customers to the company.
Lack of system of governance
The organization is required to ensure there are developed strategies that help ensure employees’ behavior is at par. The customer is an essential individual, and the employees need to understand that the airline could not exist without a customer. The management should maintain constant employee training to avoid situations where customers are mistreated.
In conclusion, United Airlines ensures they have put essential measures in place to maintain it as the largest airline industry. Market challenges need immediate solutions, and good governance is the cutline. The employees need special treatment to minimize the trust issues. Management skills are supposed to be considered for the smooth running of the sector.
Managerial Skills That Need Attention
Management is the most key to the success of an organization. Failure in leadership leads to a collapse in the organization and, therefore, a need to address the matter. The market segment is another crucial part that needs attention to ensure a profitable industry. This is important because they are critical issues for the sector’s growth.
After the disaster with Mr. Dao, the airline promised to empower all employees to understand the rights of their customers. The CEO pledged to all customers that they deserve the highest treatment for service delivery with a deep sense of respect. Since it’s challenging to handle all the scenarios, all the employees need to be guided by clear moral values to help them determine how to handle challenging situations that may arise in the future. The leadership needs to abide by vague values like listening carefully and giving respectful responses.
Prioritization of operation performance over employees is a matter of concern. The airline has been accused of understaffing. Therefore, the attendants are required to do much for a short time during the boarding process. There is, therefore, a need to empower and equip employees with core training. Employees need to develop emotional intelligence and learn effective communication to handle customers with the dignity and respect they deserve. Leaders should respect their employees so that they learn from them.
The employees need to be respected and listened to. There is a need to take time to listen to the workers’ grievances to know what needs attention. During decision-making, it is good to have consultations from the employees, which improves their morale at their working positions. The managers need to take time and understand what the employees need. This will lead to employees working to their best regardless of the customers’ needs. If the employees are mistreated, they will be careless, leading to failure. Leaders are supposed to value their employees and demonstrate their trust in their employees for better customer service.
The market segment is also another area that needs attention. If marketing is insufficient, the company will see a drastic decline in its services. In United Airlines, there is a need to check into details marketing to avoid incurring losses. If marketing for airline services is not well stipulated, the competitors take advantage and bring them down. The airline needs to apply a customer-centric approach. There is also a need to invest in technology. United Airlines has had software issues that the competitors use as a gateway to take over the market. Basic operations are affected, which tarnishes the airline’s image and business.
As a solution to curb the challenges affecting the organization, the leadership under Munoz, as the CEO, has strategic plans to see the airline achieve its goals. The airplane introduced core4, a training program for the employees who interact with customers. The program intends to reduce scandals that emerge as a result of the mishandling of customers.
In 2013, United Airlines got recognition from the Eco-Aviation Gold Airline by Air Transport for its leadership in environmental efforts.
As a result of leadership, the airline increased Boeing and Aircraft from 15% to 20% more efficient fuel than the previous ones.
The management should ensure they have good leadership qualities that their employees can copy to achieve their goals. They should incorporate corporate culture and address all other challenges to ensure the company’s profitability.
Ethical Challenges Facing United Airlines
Being one of the largest Airline companies globally, United Airlines has registered a fantastic performance in the past years. Contrary to the performance, the company has also faced severe challenges that have raised ethical concerns.
To start with, the company has faced a collapse due to corporate culture. Corporative culture is key to the progress of any company. Corporative culture entails trust for the employees and the interaction between the management and administration and helps set the employees’ tone (Mathews, 2019). When the company lacks corporate culture, it loses its sense of direction as the employees are frustrated. Findings have shown that United Airlines has faced a problem in corporate culture as employees have failed to be motivated, resulting in service delivery to the clients.
The company is has faced the challenge of understaffing. The staff members feel like they are overworked, which can affect. In 2018, the employers demonstrated short-staffed outside the airport (Mathews, 2019). Flight attendants have raised concerns about the staff cutting and regretted the impact it could put across.
Customer safety is an issue of concern. Complaints have complaints been put across that have tarnished their image. An example is when the flight continued while a customer had a health issue. Scandals have popped up regarding customer services.
These issues have continuously tarnished the company’s image and risks deteriorating due to many challenges (Mathews, 2019). The scandals will lead to a loss of trust from the clients. Mistreatment of employees needs to be addressed to achieve a good customer relation due to good corporate culture.
Summary
United Airlines is, for a matter of fact, the largest airline. There is, therefore, a need to ensure that it retains its popularity and maintains the kind standards of the highest levels. The management is supposed to work closely with its employees to ensure they achieve the highest level of customer service.
Strategies to manage problems within the company, including internal and external challenges, are supposed to be well stipulated to encourage high performance(Zhang & Laroche, 2020). Employees to have constant training and encouragement to deliver services of high quality.
References
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https://doi.org/10.1016/j.eneco.2018.09.015
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