Turbulent Dealings

By Sean Dame, Marketing —

Airlines didn’t used to concern themselves too much with empty or low volume flights. Very often you could be one of six people on a Boeing 747, and it was normal. Today, of course, the airlines understand the cost that these flights imposed on their companies and have stopped any money-losing flights.

In early September, the CEO of United, Jeff Smisek, stepped down amidst allegations of trading favors with the chairman of the Port Authority of New York and New Jersey. The favor was to re-instate one of those money-losing flights from New Jersey to an airport close to the port authority chairman’s weekend home in South Carolina. In return the chairman, David Samson, would allow improvements for the Newark Liberty International Airport. These improvements would greatly benefit United since the airport contains most of its carriers.

Control = Power

Investigations into the Port Authority began after the George Washington Bridge incident back in March 2014. Senior aides to the former governor Chris Christie had worked with Port Authority officials to close lanes leading to the bridge, all in hopes to get back at a mayor who didn’t support Chris Christie during his re-election. The Port Authority has control over many of the vital transportation resources for New York and New Jersey, and allowing government officials to inappropriately tamper with such operations has caused great problems for the state.

Rate of Success

For United, all these issues boil down to how well the company is performing. Since the merger of United and Continental Airlines, there have been several issues with its ability to stay ahead of its competitors. Just after the announcement of the resignation of three top executives from United, stock prices saw a 1.5 percent decrease closing at $56.51 which has been consistently lower than Delta’s. The question remains—how will United get back on track? With a new management team and a new focus, things will hopefully begin to change for the better. For the shareholders, however, learning to trust management again will take some time.

Staying Honest

Having a solution to honesty would obviously be a great tool to improving company culture. How could top executives or government officials say honest in their dealings and keep the trust of the public? In a competitive world, losing trust is never an option.

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Photo courtesy of Bernal Saborlo.