Walking the line: Continental and United

The airline industry is a funny place to work.  Once you’ve worked inside it or lived inside it, it gets into your blood.  It’s hard to walk away from because airlines really are families and one doesn’t walk away from a family very often.  Even the industry is a family.  Two people from different airlines might disagree vociferously on something inside the industry but if an outsider offers a different criticism, you’ll see those two band together like brothers to fight back.  Sound familiar?

Despite the fact that we know most consumers buy on price, there is a strong brand liability that exists out there too.  A customer might choose to fly American Airlines to Europe but if he or she is a Continental fan, you can bet they’ll have nothing but criticisms and comparisons to what they think Continental is.  That customer loyalty, I think, derives from an attraction to the company DNA that was established over 40 years or more. 

American Airlines was always a bit more of a no nonsense airline that appealed to the conservative businessman.  Delta was about southern hospitality.  Northwest Airlines was attractive to that stoic Midwesterner since it mirrored their values.  Continental was always a bit of flash and upstart which attracted the entrepreneur.  Braniff was somewhat similar although there was a certain Texas adventurer to it.  TWA was Hollywood and Pan Am was blue blood.  Those airline personalities attracted similar people and although that has been diluted to a fair degree today, that DNA is still there.

I have to admit that I marveled at how readily people accepted the Delta / Northwest merger.  It was, in my mind, a clash of cultures.  It was as if the Southern Dandy went to Minnesota and married a solid, conservative blonde Swede.  Part of me expected neither family to accept the marriage.  Yet, they made it work.  They not only made it work, they made it look like true love.  I was,  and continue to be,  impressed.   Now and then there is a marriage that works out like that.

But, historically, mergers among airlines don’t often work out like that.  There are still former Republic Airlines employees who will give you a bit of an earful over Northwest Airlines purchase of Republic.   Until TWA’s demise, there were Ozark employees who would still privately confess great irritation at TWA purchasing their home.   Look into Delta and you’ll find Western Airlines employees who feel the same.  It’s usually more a marriage of convenience than a marriage of love. 

Now we have Continental and United marrying.  United, arguably the oldest legacy airline of the United States and certainly of blue blood in the US, is marrying Continental Airlines, a western frontier upstart of a far greater checkered past.  Continental employees are chagrined because they see themselves as proud and independent and the airline who survived the worst and came out of that as one of the best airlines in the world.  United Airlines employees are feeling a sense of loss because despite the fact that their name and headquarters exist, Continental is really the daddy in this union and that just doesn’t seem right to them.  That became clear when John Tague didn’t make the cut in the marriage.  Nor did several other prominent and, quite frankly, strong performing United executives.  It might be United’s name but it’s Continental’s leadership that is going to go forward.

Continental employees wonder why they need United given their success for the past 15 years.  What does United bring to the table that they don’t already have?  United employees speculate that these upstarts are going to be overwhelmed faced with the prospect of running a “real” airline.  The truth is, neither concern is really valid. 

Customers seem to sense the same issues and certainly the home cities of each airlines’ headquarters.  It’s a problem for this merger.  Not an insurmountable problem and I do believe that once the merger is consummated and has time to settle, many of those fears really will go away. 

What airline is a United customer going to be flying after this merger is done?  What airline is a Continental frequent flier going to be a member of when it’s done?  I’ll wager that the average customer just can’t answer that based on the way things have gone so far.  I’m a relatively dispassionate observer to this and I can’t answer that question. 

The problem is that people can sense this fear and they’re reacting to it on many different levels.  It’s a fear that is almost palpable at this point and I think that comes from the somewhat mixed message that the new “brand” is sending.  People see a Continental airplane with a United name and I think that strikes them as an attempt to be all things to all people.  Notice that Delta and Northwest avoided that mixed message. 

You can change the typeface of the name United but you can’t change the mixed message.  Brett Snyder of the Cranky Flier is quoted HERE in the Chicago Tribune as saying:

“I’m a huge fan of making a clean break, unless you’re planning on replicating the service. . . ” and “”I don’t know how you meet expectations from both sides when you’re not really making a clear brand statement.”

Bingo.  He’s dead right.  Expectations aren’t getting met on either side.  This is much more an old school airline merger.  I actually agree that a new brand would have been a far better approach.  Even adopting an old brand that neither had history with would have been better if it set expectations for both sides.  Imagine the reaction if this new union decided to call themselves TWA or Braniff or even National. 

Even a new brand incorporating some elements from both would have sent a better message.  What if they called themselves Flagship Airlines with a new logo designed to evoke the service they intended to deliver?  It would have delivered a much more clear message either way. 

Here is an interesting observation:  Both airlines do have some distant genetic heritage in common.  Walter Varney who founded airlines that were direct ancestors of both United and Continental.  I’m not proposing the name Varney Airlines but I do wonder if there isn’t something in that history that would lend itself to a good name.

The problem is that it’s hard to walk away from the legacies each brand offer.  There are decades of branding invested in the names United and Continental.  There are decades of history behind each name and decades of family history in each name.  Even airline executives have some sort of emotional attachment to their airline and they aren’t immune to being influenced by that despite the belief they are cold blooded people focused on profits.  They just aren’t.  Not even Glenn Tilton who has relatively little history working in the airline industry.

They problem inside each airline is that the employees haven’t been given something to rally around.  How does a Continental employee rally around the idea that their company is losing its headquarters and name?  How does a United employee get excited about seeing his proud airline re-badged in the image of Continental?   A new name would have evoked some rebellion but it would have sent a message about this being a marriage of equals and I think employees and customers might have been vocal about the change but I also think they would have come to accept it relatively quick. . . especially if the new name was a good one that evoked something real. 

You couldn’t introduce a name like “Acura” or “Lexus” or “Lucent”.  That’s why adopting the name of a no longer existing airline might have been better.  It would have given an instant history and acceptance to the name and, yet, signaled a new start.  There are lot of defunct names out there to rally around.  And there are a lot of possibilities when it comes to new names. 

It’s not that I don’t think that this merger will succeed.  I do think it will succeed.  I just don’t think it will go very smoothly and I don’t think people will adjust to it very easily for the next 5 or 6 years.  That leaves them at a disadvantage to Delta and American Airlines. 

The next best thing CEO Jeff Smisek could do is get that entire fleet painted in the new colors faster than anyone could believe possible.  Get those operations consolidated quickly and get the customer facing side of the company unified in appearance asap.  Get something out there that people both inside and out of the company can rally around and accept.  Get the Continental executives up to Chicago as soon as the day of the legal merger and by up to Chicago, I mean have them living there on day one, not commuting.   That’s an important overture to make to the United employees.  Similarly, embed your best Continental managers into United hubs and so that the Continental employees see their influence day to day and don’t feel abandoned. 

This merger is a long way from being done smoothly.  The two entities have to make nice with their union employees and get them to agree on a transition to one contract and none of those employees have a reason to buy into this so far.   One thing is certain:  If the employees don’t buy into this merger and cooperate, this will be a long and painful merger resulting in a huge loss of opportunity in the market place.  The synergies won’t be realized and the financial markets will voice their disapproval fairly quick, too.

Branding is more than just communicating with a customer.  It’s a united front (no pun intended) for employees to work under and without a strong brand to connect to, those employees won’t know who they’re fighting for.

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