When companies merge the impetus is to immediately cut costs to achieve the hoped-of financial benefits. And all too often that means consolidation and cutbacks in the back offices i.e. contact centers.
So when United Airlines and Continental Airlines announced their merger earlier this week my radar went on to see if that is going to happen in this instance. The suspicion is yes, to some extent, but not as great as it would be if both firms were head-on competitors in major markets.
United, the dominant partner is projecting some $200 million to $300 million net cost [read staffing cuts via attrition at first but not ,well...] "synergies" by 2013. A significant sum, yes but it is predicting revenue "synergies" of $800 million to $900 million.
That's good news for the combined carriers' contact center staff; it means more reservations and yes service calls. There is minimal overlap in the route network, which means little trimming and instead considerable complementary routes that will generate more business, yes from a recovering economy but also from the "new" airline's competitors.
"Employees will benefit from improved long-term career opportunities and enhanced job stability by being part of a larger, financially stronger and more geographically diverse carrier that is better able to compete successfully in the global marketplace," says the press release. "The companies believe the effect of the merger on front-line employees will be minimal, with reductions coming principally from retirements, attrition and voluntary programs."
Of the two merged carriers Continental Airlines especially long had an excellent customer service and reservations department. United's management should take a close look at it to see if they have best practices and solutions that could be adopted corporate-wide.
My gnawing feeling is that the merged airline though will accelerate shifting more calls to the Internet and to advanced speech recognition systems, now that it has the resources and the economies of scale, just as their competitors have done. Getting ahold of a live agent is rarer than finding something more edible than peanuts on a flight though. While I am a big fan of these automated tools there is in travel especially the need to have a reassuring knowledgeable live voice at the other end of the line.
If United + Continental truly do want to make their merger shine in the big carrier league it should take a page instead from successful low-cost competitor JetBlue's playbook and have their agents work from their homes. That strategy has dramatically proven to slice expenses while boosting productivity. The savings would then go to delivering customer-attractive high quality and competitively-priced air service.