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"Life is a storm... You will bask in the sunlight one moment, be shattered on the rocks the next. What makes you a man (or woman) is what you do when that storm comes.” — Alexandre Dumas

The Wall Street Journal's "Crisis of the Week"

Crisis of the Week: United Airlines Faces Turbulence Amid Federal Probe

Ben DiPietro, The Wall Street Journal's Risk & Compliance Journal, September 21, 2015

This week we look at the statements and actions of United Continental Holdings Inc., which replaced its CEO and two of his top executives amid a continuing corruption investigation by federal prosecutors. The ouster of Jeff Smisek comes as investigators look into whether former Port Authority of New York and New Jersey Chairman David Samson used his position to demand favorable treatment or personal benefit from the airline.

In a statement, the company said it decided to replace Mr. Smisek and the other two executives as a result of its own internal investigation into its dealing with the Port Authority. The airline's board apparently decided to cut ties with Mr. Smisek a few weeks before the announcement of his departure. During a conference call discussing its latest quarterly results, the company said it wouldn't comment further as the investigation is ongoing.

Looking only at what the company has said publicly in its statement and on the conference call, we asked the crisis experts to gauge how well United has handled this crisis.

Davia Temin, CEO, Temin and Co.: "'By the book,' is how United Airlines said it conducted its investigation of former CEO Jeff Smisek, and by the book is how its board and new CEO have handled every communication regarding management changes. Communications have been textbook–word-perfect, well-vetted and bloodlessly on message. But there are times when 'by the book' is simply not enough to do the job, and this is one of them. Extraordinary measures are needed.

"United Airlines, especially since its merger with Continental, has systematically destroyed customer trust and taught the public to disbelieve its rhetoric. Dead last in customer satisfaction rankings, it still said its skies were friendly. Before his ouster, Mr. Smisek was featured on the in-flight safety video telling fliers how much they were valued. Yet, just having gone through the boarding and flying experience, customers knew that wasn't true. So, it will take extraordinary action on the part of United to rebuild trust, not just words. And the new CEO's letter to customers simply promised that United would reach the floor of acceptable service, not the ceiling.

"To rebuild trust, new CEO Oscar Munoz will have to reinvigorate the United brand and demand that every interaction and communication made by United personnel lives up to that brand. It will take a 180-degree reversal. United will have to write a new book, and prove to us all that its words are backed by action."

To read the full article, CLICK HERE.

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