On the eve of two major US airlines finally becoming one, the new United brand's UK and Ireland worldwide sales chief Bob Schumacher talks to Jonathan Hart about climbing a merger mountain
BOB SCHUMACHER EXUDES the quiet patience of a man repeatedly asked to interpret the piecing together of a complex aviation jigsaw. Only his quick-fire delivery suggests an evident relief at slotting the final segments into place.
Over coffee at a London hotel, Schumacher barely pauses to draw breath in his eagerness to spell out the imminent completion of the protracted merger between United and Continental. Words tumble in rapid order about the complexities and benefits of forming an airline goliath, serving close to 400 destinations through 10 hubs linking eight points in the UK and Ireland.
Little wonder. After two false starts, it has been fully a year since the merger was finally given the green light - and under the dual subsidiary guise of United Continental Holdings, there has been a logistical and explanatory mountain for the amiable Schumacher to climb in the interim.
JOINED AT THE HIP
As managing director UK and Ireland worldwide sales for the new United brand, he is clearly happy to be reaching the summit and finally to have a cohesive entity to present to travel buyers.
"It seems we have been talking about this forever, but at last we expect to be granted a single operating certificate by the end of the year," says Schumacher. The US Federal Aviation Administration (FAA) certificate vitally means the same procedures can be applied to both carriers, he adds.
"For us, it means the real formation of the new United, which means we can pull the final pieces into place. The last major piece will be the fusion of the two reservations systems. All being well, that will be finalised by the end of Q1 next year.
"After that, bar some odds and ends, we really will be joined at the hip. We'll be fused into United and the contractual name will have disappeared at that point."
NORTHERN IDENTITY
Until then, the carriers will continue to operate as two separate subsidiaries, and a major task in the UK has been to start morphing two well-known names into a single brand. "This is particularly relevant in the north where Continental has unique DNA. United has always been a key London player and everyone in the south is familiar with the brand," says Schumacher.
"However, the farther north you go, from Birmingham up through Manchester, Belfast, Edinburgh and Glasgow, Continental is the better-known name. What we have been trying to do up-country is build a bridge to pull buyers over to the new brand and new name.
"For example, all B757s flying into those markets have United written on the aircraft, so we've started that conversion. Otherwise, those aircraft are operated by the Continental subsidiary with the same crews, timings and flight numbers as before.
"So it's all ongoing. I reckon we're probably about halfway through the bridging process. I'd love to think that by summer 2012, it will all be done and we really are just one United."
Schumacher says the fusion of system operations into a single control centre in Chicago is the last major hurdle. "Once all the systems are talking together, that will be the last big piece of the jigsaw in place," he says. "After that, the completion of outstanding contracts, tailored paperwork and unified products and processes should all be complete by next summer."
BUILDING A BEHEMOTH
The completion of all mergers, particularly of large companies, always takes time, he says. "You have to consider that the United side comes with 48,000 employees and the Continental subsidiary with 42,000 and that, somehow, the show has to go on without any impact on the customer through the merger process.
"That means you have to do it cautiously and plan every aspect of it. We need to make sure we put together the foundations to form the world's leading carrier. You don't do that overnight.
"We have to select the brightest and best employees and put them together under the new brand, and that takes a pro-active and sensitive consultancy to ensure all staff remain motivated through the process."
He adds that more than 700 aircraft are currently being repainted, a process which has been going on for more than a year.
"We also have legacy reservations systems that need to be married together. That involves a huge amount of customer data that we can't afford to lose or drop," says Schumacher. "In short, Rome wasn't built in a day and the merger of two of the most historic and largest carriers was always going to take time."
In conjunction with the grant of a single operating certificate, a sales blitz will help to reinforce the new brand in the trade, which accounts for more than 70 per cent of distribution. "We aim to visit every travel management company and agency up and down the country. We will be using our supplier relations and joint venture partners, plus our position in the Star Alliance, to put together some penetrative deals for the new United trading name on all levels," says Schumacher.
"It's been a question of getting the timing right - of blending two concepts into one. We haven't wanted to create confusion or give the impression that Continental's gone away while it's still operative."
While buyers may still perceive United and Continental as two separate entities, both subsidiaries enjoy a natural commonality in transatlantic products, he adds. "Both carriers separately made big investments ahead of this marriage. Continental, for example, has had the guaranteed flat-bed product on all flights into and out of the UK since June last year.
For United, all bar some patchiness increasingly being ironed out on B777 services, that process is also complete. "Ultimately, the perception needs to be of a much larger carrier with an offering that it never had before. From the UK, the combined destinations, non-stop flights and overall coverage in the US all give United a big fist in the marketplace that corporates and agencies will recognise.
"If you've got one or two daily flights across the north Atlantic from Heathrow you're not a player in the corporate world. If you've got five daily to New York, four to Washington, three to Chicago, two to San Francisco and one to Los Angeles, then you're a player."
The goal of the new carrier is to match market demand on the transatlantic route, adds Schumacher. "We're not here to build market share. The days of dining out on market share are well and truly behind us. Oil prices dictate that there must be capacity discipline.
"The beauty that comes with this merger - and the schedulers are smiling - is the range of fleet and times that can be optimised."
Optimising aircraft types is another advantage. Schumacher says "the real excitement" comes with the addition of the B787 to the fleet: six are planned to join in 2012, leading eventually to 50 B787 aircraft. "This is a game-changing aircraft for medium- and long-haul. It brings down the cost of flying, as well as the environmental impact, by about 20 per cent per seat mile."
"We are creating a world airline and that is critical in terms of its breadth, depth and quality. We are a service business and will only be in business as long as we deliver the best service. There's a long shopping list of things we could brag about but ultimately, the customer will be giving the verdict on whether we've got it right."
Bob Schumacher managing director UK and Ireland worldwide sales, United
Sixteen years with Continental Airlines, latterly as senior director UK and Ireland, preceded Bob Schumacher's appointment to his current position as managing director UK and Ireland worldwide sales for the new United brand in January this year.
Married with two children, the 49-year-old started his career in the mid-1980s as a traffic officer and load controller for Gatwick Handling, followed by stints as duty officer for London City Airways at London City Airport and station manager for Air 2000 at Gatwick.