United Airlines tries to fix its reputation

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Ruehl Bulan perches on the left rear exit of a United Airlines jet and flings seat cushions, three at a time, into the chilly October night.

He’s part of a skeleton crew of mechanics swarming the Airbus A320, which just pulled into Dock 2 at the carrier’s cavernous maintenance hangars at San Francisco International Airport. By dawn, they will have stripped the plane down to its metal seat frames.

For the first time this decade, Chicago-based United is giving a makeover to every aircraft in its fleet. It’s part of an effort to restore a reputation that has been bashed in YouTube videos and the Onion.

Out: tired gray interiors emblazoned with black and red stripes, a decor known within United as “tequila sunrise”; 1980s-era overhead bins on some planes; and, on this jet, any reminder that it once flew for United’s defunct Ted brand. Over four days, the A320 will be spruced up with a new first-class cabin and outfitted from front to back with soft, blue leather seats.

The overhaul doesn’t end there.

“We’re working our way through Red Carpet Clubs, gate areas, just to get back to a common standard of this is what you expect of United,” said John Tague, United’s president.

The question is whether revamping aircraft and airport lounges will repair customer ties that have frayed since the mid-1990s. Much of the damage was done in recent years as United grappled with service meltdowns, raised fees and slashed its spending on aircraft upkeep to conserve cash.

As turbulence has buffeted the airline industry, customer satisfaction has dropped for every major carrier except Continental Airlines and Southwest Airlines, researchers at the University of Michigan have found. But satisfaction rates have fallen furthest for United, which ranked last among the largest airlines in two of the last three years as measured by the school’s American Customer Satisfaction Index.

“United customer service is almost an oxymoron,” said Bob Trevelyan of California, saying he prefers Southwest. “A new fleet and everything else is great. But until they change the attitude of management and in-flight [crews], it’s not going to matter.”

Image and service were pushed to the back burner this decade at United and other U.S. carriers as executives dealt with a series of crises: Sept. 11, SARS, oil shocks, global recession and plummeting revenue. United also faced internal turmoil: workers embittered by pay and pensions lost during a three-year bankruptcy; management distracted by fruitless merger talks with Delta Air Lines, Continental Airlines and US Airways.

United’s reputation was further damaged by operations meltdowns in the summer of 2000 and again in late 2007, when storms slammed its Chicago and Denver hubs. United has traditionally differentiated itself on service, so its shortfalls were all the more frustrating to customers, analysts said.

By spring 2008, United executives realized it was imperative that they focus on fundamentals. At a May 2008 board meeting, Tague, who had just been named chief operating officer, spelled out how United could reverse course: The airline needed to run on time, with clean planes and courteous employees, while delivering industry-leading revenue and keeping costs in check.

United first had to make sure its planes kept on schedule. Its on-time performance ranked 19th among the 20 largest U.S. carriers during the fourth quarter of 2007, according to the Bureau of Transportation Statistics.

If an airline is chronically late, everything suffers. More bags go astray, cleaning crews have less time to pick up trash, and workers are more likely to be overwhelmed by passengers who have missed connections.

United’s punctuality improved as it parked more than 20% of its fleet and built in more time to load and unload passengers. For the first nine months of 2009, United ranked second among large airlines.

“Being on time was No. 1,” Tague said. “That gives us the permission to focus on a lot of these other issues.”