United We Care

Crisis Comm. Plan by Finnerty, Komjati, Lyles, Magliocca

Challenge/Situation Analysis:
United Airlines (UAL) faces a challenge of mitigating damage that could arise from negative exposure
generated by a disgruntled customer.

Musician Dave Carroll was flying from Nova Scotia to Nebraska by way of Chicago O’Hare with UAL.
While on the tarmac at O’Hare, Carroll and his bandmates saw baggage handlers throwing around guitars
on the tarmac. He immediately complained to three flight attendants who responded with indifference.
The guitar, a Taylor 710 acoustic, was valued at $3,500. Carroll spent $1,200 to repair the guitar after it
was damaged by the baggage handlers’ methods of handling.

Further, upon filing several complaints with the airline, Carroll received an e-mail from UAL saying that
his claim for compensation had been denied because he failed to file it at the proper place or time. UAL
also denied his request of $1,200 in travel vouchers to offset the cost of his repairs.

After months of contacting UAL personnel in an effort to be compensated, Carroll finally made a video
about his experience entitled “United Breaks Guitars” and uploaded it to YouTube, a popular online video
community. The video went on to be viewed more than seven million times. Several newspaper, magazine
and online stories were also written detailing Carroll’s ordeal. UAL’s negative exposure had the potential
to affect the general public’s perception of the company.

UAL serves nearly 119 destinations in 26 countries and 2 territories. It has 4,700 employees worldwide
and flew about 4.03 million passengers in 2009.

Passenger revenue made up about 92% of UAL’s operating revenue in 2009.

That being said, passengers are vital to the success of UAL. To ensure passenger loyalty, UAL needs to be
established as an air carrier that is genuinely invested in the cares and concerns of its passengers.

UAL has always striven for excellent customer service. A strategic public relations campaign is needed to
offset the recent negative exposure and re-establish UAL as a company that is genuinely invested in the
satisfaction of its customers.

Goal Statement:
For the public to be regarding United Airlines as a quality provider of all aspects of air travel.

Crisis Comm. Plan by Finnerty, Komjati, Lyles, Magliocca

Target Audiences:
Employees: As of September 30, 2009, UAL had 47,035 employees, with 12,993 of those being flight at-
tendants, 15,076 being service personnel, which includes ramp and baggage employees, and 8,093 being
involved with management. UAL’s employees reside in every state in America and in many nations around
the world.

With such a large magnitude of employees, and employee behavior being one of the main causes of the
challenge, communicating with employees is vital to restore UAL’s reputation. It is imperative to improve em-
ployee behavior in an effort to deliver unparalleled customer service and ensure customer satisfaction. Flight
attendants, service personnel and managers were all UAL employees whom Carroll came in contact with and
who failed to deliver exemplary customer service.

Established Customers UAL is a company that boasts offering the right service to the right customer at the
right price. In 2009, United carried more than 82.5 million passengers. These customers flew over 114.2
billion miles. Approximately 60% of these customers were aboard domestic flights. Demographics show
that the average airline passenger is rapidly getting older.

Airline passengers are typically those with higher amounts of disposable income. It is extremely important
to reach passengers who travel on business. These are the most frequent fliers with UAL and are therefore
the most important to reach. Business passengers are also more likely to travel with baggage that requires
more delicate care. Leisure travelers are also highly important to reach because of the large segment of
business they represent. These customers are less likely to have an established loyalty to UAL. While they
most commonly travel with typical luggage (clothes and everyday necessities), they also routinely check
golf clubs, guitars and other items that require more care.

Potential Customers: UAL alone carried more than 651 million paying passengers in 2008. There were
more than 157 million passengers on international flights (from the United States to other countries) in
2008. In total, that was over 809 million passengers. This means about there are about 726 million poten-
tial customers for United Airlines. Air travel has decreased about three to seven percent annually, making
it even more difficult to win over and comfort potential customers.

There is a huge pool of potential customers that UAL must take into consideration. These customers are
already flying; UAL needs to make them want to fly with its airline. Some customers do shop for airlines
simply by lowest price while many others will stick to airlines they have had a good experience with be-
fore. Many factors go into the decision to choose an airline such as a history of flight delays and customer
satisfaction. Potential customer attitudes towards UAL can be changing on a daily basis, depending largely
on how the airline is perceived and portrayed by the media.

Investors: UAL is listed in the NASDAQ Global Select Market and has issued more than 125 million shares
of common stock to investors. However, of the 125 million shares, 115 million have gone to employees.
Therefore a large portion of the investor base is actually UAL employees. Nonetheless, they have insti-
tuted a maximum ownership limitation of five percent. Unfortunately they are operating at a -5.75 percent
profit margin. Moreover, from February 1, 2008 to March 28, 2008, United Airlines stock price went from
$41.14 per share to $21.19 per share. UAL’s stock dropped by almost half the price within a two month
period after the guitar incident.

Crisis Comm. Plan by Finnerty, Komjati, Lyles, Magliocca

In UAL’s 2008 SEC filings, it listed some of the major concerns for the company, some of which included
a terrorist attack, bankruptcy consolidation, high fuel costs, negative economic conditions and exten-
sive government regulation. Based on these concerns, UAL shareholders are most likely fearful of the
company’s future. In addition to these factors, the -5.75 percent profit margin may cause non-employee
shareholders to no longer be investors. Luckily, 92 percent of UAL shares are held by employees. Thus
they will be more likely to stay invested in the company as it overcomes the challenges ahead. External
investors will also have more incentive to stay with, or invest in, the company because it is the fourth larg-
est air carrier in the United States.

Objective 1 (Employees):
To reduce the number of damaged baggage complaints by 20% by ensuring that UAL employees act responsibly
in an effort to deliver exemplary customer service.

Accountability Strategy: UAL and its employees must be accountable for their actions relating to poor
customer service. In order to do so, employees at all levels must admit their mistakes and work diligently
to make amends for those mistakes. Accountability efforts must be focused inward, within the company,
and outwards, toward the general public.

Tactics:
1. UAL’s human resource personnel will promote proper behavior by putting in place and
utilizing a system that can be utilized to discipline employees who fail to deliver optimal
customer service.
2. UAL management then must implement a system of monitoring what employees work on each
flight, and then holding those employees accountable, via the disciplinary system, for any
misconduct that takes place on such flights.
3. UAL employees, especially those individuals in upper management positions, will take public
responsibility for the poor customer service of all employees. Specifically, a UAL official must
personally contact Carroll, admit that employee conduct was inappropriate and apologize for
it, and work to appease his concerns. Similar action should be taken in the future, prior to a
customer’s public proclamation of dissatisfaction.
4. UAL will develop a simple method by which customers can file a baggage complaint. Even if a
customer’s complaint is not legitimate, UAL customer service personnel must contact the
individual and work to reach some level of compromise to appease the customer.
5. UAL will hire a Social Media Strategist who will be responsible for keeping UAL’s social media
sites, such as Twitter, Facebook, YouTube, etc., up to date. Through these platforms, the Social
Media Strategist will promote transparency and exemplify accountability by responding to
customer concern.

Quality Assurance Strategy: In an effort to reduce baggage complaints, UAL must take extreme measures
to ensure that employees are highly trained in the areas of customer service and appropriate execution of em-
ployment duties at all levels.

Tactics:
1. UAL will provide employees who handle baggage with training sessions in which appropriate
guidelines for handling luggage are discussed, and negative consequences of inappropriate
conduct are explained.
2. UAL will provide flight attendants with training sessions that address how to effectively handle
Crisis Comm. Plan by Finnerty, Komjati, Lyles, Magliocca
 situations in which customers file complaints. These training sessions will provide flight
attendants with materials that disgruntled customers can be given explaining how to formally file
complaints with the new, simple method developed by customer service.
3. UAL will provide customer service personnel with training sessions in which employees are
notified of ways in which to deal with customer complaints including: what types of
compensation can be offered, when it is appropriate to offer those types of compensation,
alternative methods of appeasing customer concerns and ways of showing genuine investment
in customers’ concerns.
4. UAL will then administer tests and evaluations to ensure quality employee performance upon
completion of training programs. Such evaluations will occur sporadically throughout an
employee’s employment, without the employee’s knowledge. Those who fail to perform
exemplary service will be met with more training or disciplinary action.
5. UAL customer service personnel will also evaluate the number of complaints filed each month.
Upon completion of the complaint and compensation process, customers will be sent surveys
and asked to rate their experience with customer service personnel.
6. UAL’s Social Media Strategist will upload videos of employee training sessions to YouTube. The
Social Media Strategist will then assemble a social media press release containing links to the
company’s social media outlets. The Social Media Strategist will send this release to industry
(such as business and travel) bloggers. By spreading news through social media, UAL will make
its quality assurance efforts known to the public.

Objective 2 (Established Customers):

To reach established customers with a message that UAL prides itself in positive customer service and is
working to provide customers with an excellent experience every time they fly with UAL so that they view
UAL as a company they can trust and are loyal to.

Dual-Directional Communication Strategy: Established customers will be aware that UAL highly
values its customers and is dedicated to ensuring their satisfaction in all aspects of their travel with UAL so
that they continue to choose the airline for their flights, both domestic and international.

Tactics
1. Send an e-mail to established customers with an explanation that UAL recently failed to meet
its standards of providing an excellent experience for all customers and is dedicated to making
improvements that will ensure customer satisfaction. Include in the e-mail a link for customers
to send feedback about their experience flying with UAL.
2. In order to show that UAL takes customers seriously, create a team to respond to all legitimate
customer feedback. The message relayed will be one of UAL’s commitment to improving
customer care to ensure an excellent experience in all aspects of air travel.
3. Send a direct mailing to the top five million repeat fliers with an explanation that UAL recently
failed to meet its standards of providing an excellent experience for all customers and is
dedicated to making improvements that will ensure customer satisfaction.
4. In order to show that UAL takes customers seriously, include a phone number of a hotline for
customers to call with feedback about their experiences with UAL. This hotline should be a
direct line to contact with a human, not a machine.

Crisis Comm. Plan by Finnerty, Komjati, Lyles, Magliocca

Electronic Media Communication Strategy: Customers will be reached through a variety of mul-
timedia avenues. Through the use of different forms of media, we will be able to reach large segments of
the population. Television, internet video and radio are each more likely to reach a different demographic.

Tactics
1. A reputable UAL representative will appear in interviews on CNN, MSNBC and FOX NEWS to
show transparency and ownership of the challenge UAL faces.
2. Use the UAL YouTube channel to have a company-controlled presence on the Web site. Produce
a video response to Dave Carroll’s “United Breaks Guitars” video. This video should be comical,
to match the tone of Carroll’s video, but should also convey a message of understanding and
ownership of the challenge.
3. A reputable UAL representative will be interviewed on NPR to reach larger segments of the
business customer base. This interview will convey transparency and ownership of the challenge
UAL faces.
4. Secure a week for Glenn Tilton, President and CEO of United Airlines to appear on CBS’s reality
show “Undercover Boss.” Make sure that Tilton spends time with baggage handlers on the
tarmac.

Objective 3 (Potential Customers):

To ensure that potential customers see UAL as a responsible, reliable and paramount airline service and
choose to fly with UAL on their next trip.

Raves and Reviews Strategy: UAL has many great services and has been recognized as an exceptional
airline in several areas. This strategy will inform potential customers about all the great things said about
UAL to combat the few negative things being said about them.

Tactics
1. Gather all the good comments made about UAL in the media and any distinctions it may have
won, such as being named the number one on-time airline by the U.S. Department of
Transportation’s Air Travel Consumer Report, and compile them into one aesthetically-pleasing
and comprehensive list to post on the UAL Web site and to send out to various media outlets.

Social Media Strategy: This crisis stemmed from Carroll’s expert use of social media and an important
way to combat it is through more social media. Although UAL should not directly butt heads with Carroll
or slander him on YouTube, it should utilize the medium to reach the same audience Carroll did.

Tactics
1. Create official UAL social media accounts that are creative, factual and are utilized in a way that
will grab attention but not be inflammatory and link them all to one another so potential
customers can be easily lead from one site to another, gathering various information.
a. YouTube: Create interesting and youthful videos that will mimic the feel of Carroll’s
videos without mocking him or defaming him and upload them to the existing YouTube
account. This will catch the attention of the same audience. Some short videos could
include songs about low-priced airfare, positive customer service experiences or notes
from the Raves and Reviews list. Include tags with each upload so potential customers
who may be searching for Carroll’s video will also come across the videos by UAL.

Crisis Comm. Plan by Finnerty, Komjati, Lyles, Magliocca

 b. Twitter: Consistently update the existing Twitter account at least 4 times a day. Tweet
about the Raves and Reviews, apologize about not performing to its normal standard of
customer service, discuss any changes in customer service policies and encourage
followers to tweet any questions, concerns and comments.
c. Facebook: Utilize the existing official Facebook page to apologize to customers and
create a discussion group that will encourage potential customers to air any concerns and
receive answers within a week. Also utilize the several fan pages and non-official pages
that are about UAL and respond to them as necessary (such as thanking those in the group
about how great UAL is and asking those in the group that dislike UAL what they can do
to create a better experience for passengers).
d. Blogs: Comment on any major blogs that talk about UAL consistently such as
travel.blogcarnival.com, evilunitedairlines.blogspot.com and triporati.com. Some of the
blog entries are very negative and UAL commenting on them will show that it actually
cares about each and every customer. On the blogs that praise UAL also comment and
apologize for not living up to the standards they are used to or mention what UAL is
doing on a daily basis for continual improvement.

Economic Incentive Strategy: Potential customers are very driven by prices when choosing an airline
to fly with. While the crisis is continuing and potential customers may have a negative connotation of
UAL, it should compensate by creating an economic incentive.

Tactics
1. Create and heavily advertise a customer satisfaction guarantee program. If a flight is overbooked
or luggage is lost a customer will get compensation within a week or they get a free ticket.
2. Reiterate UAL’s lowest price guarantee so customers will see that booking with UAL will always
be the best choice economically.

Objective 4 (Investors):
To effectively communicate to investors that UAL is actively pursuing customer service corrections in or-
der to provide financial stability for investors.

Investor Stabilization Strategy: Because UAL is already in an economic struggle, a worst-case

scenario would be massive shareholder selling. Therefore, it is imperative that we convey a clear message
of action in order to stabilize the financial situation produced by the guitar incident. The poor image pro-
duced by the incident must be rectified in order to assure shareholders that their money is not in danger.

Tactics:
1. Create an investor information kit that contains important documents including a news release,
Frequently Asked Questions page, mission statement and letter of apology will also be placed
on the investor relations portion of the Web site. It will be assembled in a style similar to
that of a media kit.
a. News release: This release will be tailored to the investors of UAL. It will include a
general overview of the incident, how UAL is working to correct the problem and the
effect this incident will have financially on UAL. It will also promote the positive
experience gained from the incident and an explanation of how UAL has become a
better customer-oriented company because of it.

Crisis Comm. Plan by Finnerty, Komjati, Lyles, Magliocca

 b. Frequently Asked Questions (FAQ) page: A public relations and finance team will provide
an FAQ of important investor information that is pertinent to the situation. It will include
basic information, such as what on what stock exchange UAL stock can be found. It will
also include fiscal year dates. However, it will also include questions and answers more
specific to the guitar incident, such as what happened to the employees who committed
the act and an explanation of how UAL working to solidify positive customer service.
c. Revised Mission Statement: A revised mission statement will be placed with the other
materials in the investor information kit. The public relations team, along with key
officials in the company, will identify key areas of criticism, such as customer service and
include a detailed statement of how the company hopes to satisfy the needs in those areas.
d. Letter of Apology: The main spokesperson of UAL will draft a letter of apology to
investors. It will apologize for the poor treatment of customers and the effect the incident
could have on investors. Also, it will detail a course of action to mend the situation and
move the company in a positive direction. This letter will also be sent to investors through
mail and email if available.
Two-Way Investor Communication Strategy: By providing investors with a platform to communicate
with company officials, UAL will show a genuine interest in the concerns of investors, allow them to pose
questions, provide a platform for feedback and give investors a genuine sense of owership in the company.
Tactics:
1. Shareholders will be invited to attend a meeting with a public relations spokesperson and a
financial spokesperson. At the event, details of the incident and financial information will be
disseminated in a face-to-face format. There will also be a chance to ask questions. This will
help enhance the image of UAL because interpersonal communication has more impact on
individuals. Segments of this meeting will also be placed in video format in the investor
information kit.
2. A blog will be formed for the company tailored to investor information. The blog will allow a
more conversational format of communication. It will also allow worried investors to
communicate their concerns to an official of the company.

Evaluation

Employees:
Objective: To reduce the number of damaged baggage complaints by 20% by ensuring that UAL
employees act responsibly in an effort to deliver exemplary customer service.
Assessment: The Accountability strategy will be assessed by evaluating whether or not a disciplinary system
was put in place, utilized, and effective in deterring individuals from mishandling baggage. Accidents do
happen, therefore, a 20% decrease in baggage complaints after training sessions and disciplinary actions
would reflect more careful behavior on behalf of employees. The number of baggage complaints will be
assessed by the new simple system for filing complaints, which will also monitor the number of complaints
filed. This number will be compared with the percentage of baggage complaints from the same time
period of the previous year.

The Quality Assurance strategy will be assessed by monitoring the number of employees who completed training.
The strategy will also be assessed by seeing if management followed through and continued to evaluate the
performance of employees, and whether disciplinary action and training improved that performance.

Crisis Comm. Plan by Finnerty, Komjati, Lyles, Magliocca

Established Customers:
Objective: To reach established customers with a message that UAL prides itself in positive
customer service and is working to provide customers with an excellent experience every time
they fly UAL so that they view UAL as a company they can trust and establish loyalty to the airline.

Assessment: The Dual-Directional Communication Strategy will be assessed by tracking hits on
the customer feedback page that is linked to by the e-mail. Further, the number of responses will
be recorded. We will also record the response time of each message to evaluate the standard of
replying within two days. The success of the direct mailings will be evaluated based on the
number of calls to the hotline.

The Electronic Media Communication Strategy will be assessed by tracking comments made on
CNN’s, MSNBC’s, FOX NEWS’s and NPR’s webpages related to the interviews. Determine the
average viewership of the program on which the interview is conducted. Also, track online news
activity generated by the interviews.

The success of the YouTube channel will be measured by the number of views for the posted
videos, especially the primary response video. Comments on videos will be monitored as well.

Ratings from “Undercover Boss” will be used to measure the success of that exposure.

Potential Customers:
Objective: To ensure that potential customers see UAL as a responsible, reliable and paramount
airline service and choose to fly with UAL on their next trip.

Assessment: The Raves and Reviews strategy will be assessed by placing a hidden traffic counter
on the Web site page and seeing how many unique hits the page got. Also, a media audit will be
performed to see if the media or blogs picked up a story about one of the raves and reviews and if
it was portrayed in a positive or negative light.

The Social Media strategy will be assessed by counting the number of views the new YouTube
videos received, as well as any increase in how often the older videos were watched. Any
comments to Twitter or Facebook will be counted and those who had a conversation through an
official UAL social media site will be asked if it changed their view of UAL or if they were more
likely to fly with UAL. The tone and existence of any anti-UAL blogs will be monitored after
UAL comments on them to see if the tone changes at all.

The Economic Incentive Strategy will be measured by giving passengers on all UAL flights the
option to fill out a comment card which will ask:

• Why did you choose United Airlines for your air travel?
• Are you satisfied with the price of your United Airlines ticket?
• Have you flown with United Airlines before?
• Do you have any comments or suggestions?

These cards will be collected and counted.

Crisis Comm. Plan by Finnerty, Komjati, Lyles, Magliocca

Investors:
Objective: To effectively communicate to investors that UAL is actively pursuing customer service
corrections in order to provide financial stability for investors.

Assessment: The Investor Stabilization strategy will be assessed in numerous ways. First, we will
conduct a media audit to see who utilized the news release for investors. We will also track the
number of hits the release has on the Web site. Second, UAL will count hits for the FAQ and the
revised mission statement. Third, we will measure the stock price of UAL over the duration of the
campaign. Because the strategy is to stabilize the investments in the company, stock prices will
be paramount to all other forms of evaluation. Furthermore, if the stock price does fall, we will
hire a financial research firm to analyze the reason for the decline.

The Two-Way Communication strategy will be assessed in four ways. First, turnout at the
shareholder meeting will be measured. Turnout will be measured against the number of
shareholders in the company. This will also exclude employees who are shareholders, but they
will be invited to come and will be counted separately. The quality of the meeting will also be
measured. We will hand out collateral in the form of a survey to those who participated in the
meeting to gauge their reaction to the event. Second, segments of the meeting will be placed
online where we can measure traffic to the video. Third, measurement of participation in the
investor blog will take place. We will measure traffic and the temperament of those who
participate. Temperament will be measured as negative, neutral or positive. Fourth, we will
conduct in-depth interviews with investors who hold more than one percent ownership of the
company. This will also exclude employees of the company. This will provide us with qualitative
data as to the image of the company from a shareholder’s perspective. This measurement tool
could also assist us in our stock price evaluation. If prices do fall, we can use information from
the interviews to deduce why investors dropped their shares.

Timeline
Within 24 hours: -Send e-mail to established customers.
-Issue apology on Facebook, Twitter and investor relations Web site.
-UAL representative interviewed by CNN, MSNBC and FOX NEWS.
-Press release for investors
-FAQ
-Revise mission statement

Within 1 week: -Launch “Raves and Reviews” page on Web site.

-Create and post YouTube videos.
-Have a UAL official issue an apology letter to Dave Carroll.
-Send out direct mailings/letters.
-Create investor blog.
-Comment on existing travel blogs.

Crisis Comm. Plan by Finnerty, Komjati, Lyles, Magliocca

Within 1 month: -Start advertising campaigns for customer satisfaction and lowest
price guarantee programs.
-Develop employee training programs.
-Secure a week for Gregg Tilton to appear on “Undercover Boss.”
-Hold investor meeting.

Within 3 months: -Have employees complete customer service training programs.

As Soon as Possible, but no more than 3 months:

-Hire Social Media Specialist
-Create, implement and utilize disciplinary action program and
employee evaluation program.

Budget
Hire a Social Media Specialist $50,000/year
Direct Mailings $3 million
Training sessions $2.35 million
Advertising Campaign $650,000
Investor Meeting $2,500
__________________________________________
Total $6,052,500

Crisis Comm. Plan by Finnerty, Komjati, Lyles, Magliocca