two airplanes flying over water

United Airlines has a word for Delta Air Lines: “Healthy businesses don’t make excuses.” In a not-so-subtle jab, United argues that it takes a “no excuses” approach to issues that impact operations, even beyond its control.

United Jabs Delta: “Healthy Businesses Don’t Make Excuses About CrowdStrike”

In what was probably the most interesting interaction of this week’s Q3 earnings calls, Deutsche Bank analysist Mike Linenberg asked why United did not even reference the CrowdStrike issue in it guidance. While Delta bore the brunt of the delays and cancellations, United still canceled nearly 2,600 flights.

Mike Leskin, United’s Chief Financial Officer, answered first and offered an interesting concession as well as a dig at Delta:

“But healthy businesses, healthy industrials, healthy businesses, don’t make excuses about CrowdStrike, don’t make excuses about weather. We build into our guidance, the expectation there will be one act of God in a quarter that impacts the business in a negative way. And if that impact ends up not being so large then we can beat — coming at the high end or beat our guidance. If you have a series of events in a quarter or a massive event, then of course, you’re not always going to hit your guidance. But I think it’s just basic setting of targets in a way that expects it not always to be a perfectly sunny day.”

No excuses about CrowdStrike? I think it’s very clear Leskin was referring to a certain Atlanta-based airline. That United plans in for one bad weather even or other “act of God” each quarter may not be unique, but it is an interesting way to hedge bets and hope for higher returns, much like the concept of schedule padding, where a carrier blocks far more time than is typically needed for a flight to ensure on-time arrival.

United CEO Scott Kirby, who historically has avoided such poking of a competitor, piled on:

“And I’ll actually use this to expand on a cultural philosophy that I think is really important here at United. When I was a cadet at the United States Air Force Academy, the best thing I learned was no excuses, may have no excuses ma’am, no excuses sir. It’s easy to point to the things that aren’t your fault, they don’t feel like they’re your fault, but that was one of your basic answers. And we have tried to get that philosophy instilled throughout United.

“What that means is it forces you to constantly get better. It’s easy to have an MBA in a cubicle somewhere come in at 9:00 am on Monday in an air-conditioned office and calculate how much some event outside of your control cost. And it’s right, I mean it’s not that it’s wrong. But that then that’s the end of the story. If you have a no excuses mantra and you don’t allow people to even go calculate those numbers, it forces people to go find innovation, creative ways to get better and better and better, so that you can overcome those things when they happen. And we have said it a few times on this call.

“We are the innovation leader in the airline industry around the globe and second place is far behind. And the no excuses philosophy is a big part of that. It forces us to do things that we wouldn’t otherwise do if we let ourselves just look at the calendar or look at the bad things that happen and write those off. And so I think it’s a really important cultural point that the team has on both the revenue side and the cost side. And I’m proud of the team for taking it to heart, our Chief Operating Officer is in the room, Toby, and he says it in a different way, but great. He says, — we’re talking about things like the weather. And it may not be our fault but it is our responsibility and that’s the attitude we have here at United.”

It’s a powerful contrast between Delta CEO Ed Bastian, who continues to point fingers at CrowdStrike for Delta’s week-long operational meltdown, even though it uniquely impacted Delta (of course, suggesting something more was at play). If you think Kirby was not talking about Delta here, you’re really not paying attention, especially when he boasts that United is the innovation leader and “second place is far behind.”

But there’s a certain swagger here too, which must be always exercised with caution. There’s a verse in the Bible that says, “Therefore let anyone who thinks that he stands take heed lest he fall.” (I Corinthians 10:12). Kirby, you’re on notice!

To its great credit, United is investing in precisely the sort of technology that should minimize future CrowdStrike outages, weather delays, or other events beyond United’s control.  But everyone has a meltdown now and then and if I were a betting man, I’d certainly wager that United’s day will come, in some form or in some way.

Yes, continue investing. Continue innovating. But humility goes a long way in building trust and confidence. That’s something Kirby might learn from Bastian’s failure as well.


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