Things in the Sky

On Friday, United announced a new strategy to try to improve on-time performance: bonuses. The company will give $100 for ranking in first, and $65 for a second-place finish or reaching a company goal (which wasn’t explained in the press release).

According to the most recent Air Travel Consumer Report, United’s on-time performance hasn’t been the best. The airline ranked 15th and 17th in August and September, respectively. In October, however, the airline improved to 10th place, though its on-time percentage of 86.3% was a bit above the industry average.

I was talking to Ben from One Mile at a Time about this yesterday, and he did express a valid concern – could this bonus make service a bit more rushed? Well, that convinced me to crack open my copy of Gordon Bethune’s book From Worst to First (a must-read, in my opinion), and it seems that Continental did experience this problem:

At first with the new on-time policy,, we saw something that in a way wasn’t too surprising: The planes were landing on time, but the number of lost bags were going up….It makes sense. If you’re getting paid to get the planes in on time and baggage handling is perceived as incidental, what’s your priority going to be?”

“We didn’t want on-time flights without bags, or without people, or with dirty aisles….When baggage became a small problem in our effort…we didn’t say ‘Okay, we need to offer people money to get the bags on the planes.’ That’s their job. We needed to do was explain that…just as it wasn’t going to do any good to get the planes out on time if the passengers weren’t on them yet, it wasn’t going to do any good to get the out on time without those passengers’ bags, either.”

So, there certainly can be some negative effects of the policy, but Continental seems to have gotten over it fine, as baggage performance steadily improved, and became an area that Continental would “excel” in, to use Mr. Bethune’s word. Still, United could do what US Airways does – offer an equal bonus for doing well in on-time performance, mishandled luggage, or customer complaints. I think this system could work, though.

By the way, did United read Worst to First when thinking about this new policy? $65 and $100 were the amounts of the bonuses that were given at Continental.

Seriously, though, I am excited about this change at United, and I sincerely hope it indicates a change of management style on 77 West Wacker Drive. Hopefully, that will improve the airline’s performance and relationship between United’s employees and managemen.