'Undercover Boss' Teaches Airline CEO It's Not All Blue Skies

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On Sunday, Frontier Airlines (RJET) CEO Bryan Bedford will take his turn on CBS' (CBS) Undercover Boss. In the process, he will don a wig, shed his suit, and discover the dull, gritty, nasty jobs that it takes to put an airplane in the air and keep its passengers happy.

In subsequent interviews (see Bedford's interview with Aol Jobs here), the 48-year-old Bedford revealed that he learned similar lessons to those of previous undercover bosses. His brief visit to the other end of the corporate ladder showed him that boardroom calculations about the amount of time and number of people that it takes to clean an airplane, for example, or service a full cabin of passengers may not be borne out on the ground. As he and his employees rushed from task to task, his slow pace caused a plane delay. As he later admitted, the time allotted for a plane turn-around is not "enough time to do a terrific job."

On the bright side, Bedford's experiences on the ground level brought him into contact with many of the hundreds of jobs needed to keep planes in the air. Among other tasks, he staffed a ticketing counter, emptied lavatories, cleaned airplane cabins, and worked as a flight attendant. In the process, he also got a firsthand look at the effect that slashed paychecks have had on his employees. In May 2008, Frontier's union and non-union workers accepted voluntary pay cuts, which were designed to help the company recover from bankruptcy. The following year, Frontier negotiated further employee concessions as it emerged from bankruptcy.

Originally, these cuts were supposed to be temporary: According to an internal memo, employees were going to be returned to full pay in September 2008. Of course, such cuts weren't evenly applied across the company: While trimming tens of millions out of labor costs, Bedford received a yearly bonus that jumped from $619,535 in 2007 to $620,000 in 2008. This was in addition to stock options, salary, and other benefits. Meanwhile, pay for crew schedulers airline is $11 per hour, while customer service reps pull in $26,000 per year.

According to Forbes, Bedford didn't receive a bonus in 2009, which meant that his total compensation package totaled $1,354,067. In other words, even with a 31% pay cut, he still made more than 52 times as much as the people who sell tickets for his airline, and his hourly wage was almost ten times that of the people who fly the planes.

Since his Undercover Boss experience, Bedford has worked to draw lower-level employees more closely into the company's decision-making process. In a recent interview with the Denver Business Journal, Bedford noted that he's developed a "town hall" group structure, in which "We'll break bread with them, we'll share a meal. We'll talk about how the airline's performing and get their feedback on what they'd like to see us do differently."

Then again, there's a big stretch between generating suggestions and putting them into action. As Bedford notes, "You've got to actually walk the talk and action their suggestions. I think we've got a lot of work to do, just in terms of developing a stronger culture."




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