Textbook stuff, revised edition…
July 11, 2009
source: Lee LeBlanc
The story recounted in “Textbook stuff…“– “United Breaks Guitars,” now sitting at over 2 million views, up from 250,000 two days ago– continues to unfold. United has responded, offering belatedly to pay for the damages. Dave Carroll, leader of Sons of Maxwell and composer of the song, has responded (see it here on Youtube), proposing that, after all this time, United should just give the money to charity.
United has also suggested (for instance, to the Chicago Tribune, in an interview featured in this coverage of the incident) that the carrier could use the video internally to help change its culture– a prospect that Carroll applauds: “It could be used to improve the way passengers are treated around the world.”
But for all the hits on Youtube, has there actually been a meaningful hit to United?
Kevin May, writing at Travolution, suggests not: “…the reality is that the ‘complaint’ has probably done more to boost the profile of Canadian rockers Sons of Maxwell than it has impacted on the ticket sales of United Airlines.”
In the short-run, I suspect that’s right: Carroll and crew have certainly gotten a lift, and United ticket sales are likely holding. But then, ticket sales these days are largely made via constraints– corporate travel deals that result in policies restricting employees to a single carrier; dominant/sole carriers offering the only option on many routes, etc.– or as a product of cut-to-the-bone promotional pricing. And as bad as United’s service is, the universe of choice on most routes in the U.S. offers very few real service alternatives. I typically fly 100,000-150,000 miles domestically per year and would suggest that, with the exception of a few relatively small carriers like Virgin America, the level of service is pretty uniformly terrible and continuing to deteriorate. So, United breaks guitars… but where are you going to go? (I’ve written before about this “race to the bottom” and why, I believe, it is happening.)
But does this kind of “default impunity” mean that United and the other underdelivering members of their competitive class breeze through episodes like this with no damage at all? I think not. There seem to me at least three ways in which being called out in this way will take its toll:
- While much/most of United’s traffic is prescribed, a good bit of it’s most profitable traffic is on more competitive international routes. “United Breaks Guitars” has suggested to millions that, given the choice, it’s better to fly Virgin or Singapore or BA or Lufthansa… And when these travelers do take foreign flag carriers (if their experience is anything like mine over the last several years) they will realize that there are airlines with decent service… they’re just not the big U.S. carriers. And so more and more of these travelers will make their future decisions for travel on those more lucrative routes accordingly.
- It’s no fun working for a company that is the butt of jokes (or worse, as in the case of Northwest in Detroit for example, the target of focused customer hostility). Employees can feel defeated, can become cynical, or both… and when they do, service tends to deteriorate further. But more immediately painful to United, it aggravates relations with their employees. In my experience, United’s line employees are neither stupid nor evil; they are, in their own ways, prisoners of the same broken system that victimizes travelers. Indeed, increasingly as I travel I’ve seen defensiveness about “the way things are” give way to defeated embarrassment… and when one’s job is an embarrassment, one tends to take it out on the company. In the past, that’s taken the form of asking for more money, “battle pay.” In this economy, it appears to be accruing as a general “uncooperativeness.” In either case, it severely impacts United’s ability– the ability of any company in this kind of situation– to act effectively.
- In the longer run, United (and all of the hub-and-spokes legacy carriers) are vulnerable to a different approach to delivering air travel (see here and here). That threat will become a reality when both the emergent alternatives and consumer demand for them reach critical mass. Episodes like “United Breaks Guitars” move consumers toward that critical mass, toward affirmative willingness to make the switch. (And, as the experience of ATT through “deregulation” and break-up suggests, it also contributes to a political climate in which incumbents are vulnerable…) When a shift like this happens it can feel surprisingly fast and complete– and thus likely feel to the legacy carriers in the U.S like an implosion. But in fact, it’s been steadily building, via incidents like this. In the end, it is the festering of disappointed demand, finally enabled by new solutions, that creates “catastrophe” for incumbents like United–c.f., e.g., the “inevitable surpirse” of newspapers in the U.S.
So in the short run, “United Breaks Guitars” may just be another flash across the web, with little or no immediate effect on United’s bottom line. But more fundamentally it– and the systemic issues the episode illustrates– could prove deadly.
