Scott Kirby was let go as American Airlines President and is now President of United Airlines. At last week’s American Airlines employee town hall one flight attendant asked CEO Doug Parker whether he regrets American’s decision to fire Scott Kirby and elevate Chief Operating Officer Robert Isom to the role of President.
What did you ask me, Scott, was that a mistake? Look this is personal so I’ve got to be careful, right. But I’m so happy with where our company is right now, the leadership team we have in place. Robert Isom is phenomenal and making a huge difference in this company. Scott’s an amazing executive and is doing great things at United.
The problem we had was we had a lot of really good executives. And as we sat at the board level and talked about succession planning, we had a real concern about our ability to keep that team together. Someone was going to leave. So rather than watching and guessing who that was and trying to react we were proactive.
We’d like to keep me, Scott and Robert and keep doing what we’re doing for the last 20 years together but it doesn’t look like it’s going to be the case. So let’s not let something happen that we didn’t manage so what do you want to do, what’s the best scenario of two of those three, and we decided the board decided it was me with Robert.
So we had to have Scott go do something else. And he did, he’s at United and he doing a great job he’s fantastic.
But that’s what happened and it was the right decision. So I feel good about that one as well. Actually I feel terrible it was one of the worst days of my life when I had to have that conversation with Scott, because he’s a friend of mine, we worked together for 20 years. But it was the right thing to do for the long term for this company. That decision I believe has served American well and will serve us well in the future.
Here’s what I think happened as the Scott Kirby situation unfolded.
- United considered American’s COO Robert Isom for their President role. He disclosed this to Doug Parker.
- Parker and the Board discussed whether to make a counter-offer to Isom. They realized they couldn’t keep both Kirby and Isom. They decided to keep Isom by offering the President job at American.
- The game theory may have worked something like this: If they lose Isom, they’re still likely to lose Kirby at some point. Kirby will want to be an airline CEO, but Parker isn’t ready to go anywhere. So if Isom leaves they eventually lose both. But if they retain Isom, he’s never been an airline President and he’ll stick around awhile.
- So Kirby was out and he went and got the United President job.
- Since American was firing Kirby after all his years at America West, US Airways and American they didn’t get a non-compete in exchange $13 million and lifetime travel as severance.
- Kirby scored a big win by pocketing a severance and a new airline President job — but he probably thought it would be bigger. United put Oscar Munoz in charge of the airline when dumping Jeff Smisek as part of a federal corruption probe. However Munoz didn’t have airline experience and he had health issues. I imagine the expectation was for Munoz to become Chairman and Kirby to take over as CEO reasonably soon.
- But then a United passenger was dragged down the aisle of a United-marketed flight and beaten by officers. Munoz even responded to the incident apologizing for the inconvenience to others and not the beaten passenger. Munoz didn’t get elevated to Chairman as expected.
Investors don’t love much of what Kirby has to say but if there’s a leadership change it seems most likely to be at the top so he may get his CEO shot after all still.
Scott Kirby is one of the most ‘by the numbers, in the spreadsheets’ executives in travel. US Airways refused to add inflight internet until 2012 when he could actually see the numbers that customers were booking away from the airline because they didn’t have it. It was Kirby (and Andrew Nocella who departed American for United with Kirby) who pushed for AAdvantage to copy Delta and United in its transition to a revenue-based program, rather than adopting its own model.
He’s a phenomenal executive sorting through problem operations and one of the most earnest and interesting people to listen to in the industry. My thinking at the time was that both airlines might be made better by the change, although it’s not clear that Robert Isom has taken a decidedly different tact at American than Kirby had. And while United has its problems Kirby isn’t likely in my estimation to ever be a proponent of customer experience.
Parker is “so happy with where our company is right now”??? Guess he hasn’t paid attention to the stock price lately…..
Great analysis and reporting. In thinking whether Kirby has been good or bad for United, the answer is not so clear cut.
when will the board take action against Parker. Mystifying. One of the big stockholders is going to come down on their head before long..
Also, what are these employees, kindergartners? Are they having homeroom every week with the boss?
It aint working. The FA’s in Chicago still have a terrible attitude, and like me continue to be fat and old. How is it that every other company in the US gets away with quiet age discrimination, except for these guys?
Doug Parker continues to live in a glass bubble
Destroying the company & customer satisfaction one day at a time
The quality of customer experience @ AA and its once very important FF program now shambles of what it was just 5 years ago or less.They continue to anger customers from Concierge Key members to base level members and hear nothing and do nothing to address issues
Surprising from a man who who married a former flight attendant
His lack of empathy decency as a human being to his employees and customers is shameful
American ran historically impressively in both good & bad times
Now shattered by greed and the ultimate race apparently of a bottomless pit
I will spend twice the fare to avoid flying them
IMHO he is the worst CEO in the history of Aviation with any Legacy carrier only equaled by the corrupt ego maniac Jeff Smisek.
It would be so simple to vastly improve whats happening at American
and still drive profits to the company but common sense is derailed when you are overpaid and damaging customer relationships by the millions by not understanding lifetime loyalty over short term profits
Which doesn’t seem to matter as long as you show a profit on paper.as bragging rights
Thankfully despite some of Americans fairly monopolized markets we as consumers can still vote with our wallets elsewhere whenever possible and at least for this customer I have pulled numerous business accounts friends and family to their competitors
I earn my status elsewhere flying as I no longer value my lifetime status at American at its serious lack of respect for their customers
Sad!
Small note of pedantry to an excellent article. “Tack” is the sailing term when you want to imply a different direction. “Tact” is sensitivity in social situations. I assume you meant the former.
Parker is a stable genius
I hate reading these sorts of analyses. It is like reading the Bridge column in the NYTimes. These games affect our lives, but in such a horrible, bloodless, abstract way.
If every one of these men would get on a dozen flights in a row and experience the human side of what flyers go through they would see why United is despised, American is hated and Delta can get away with high prices. Btw, they also would see why people actually want to fly Alaska or JetBlue if they work around their limited schedules.
For years America West and USAir were the kind of miserable junk flights the legacy3 fly now. They bought planes with adjustable vents only over every three rows, with seats jammed tighter and tighter. On older planes upholstery was taped together with Duct tape, also useful for taping shut perpetually broken overhead bins. Seatbacks were broken, tray tables were always down, but, oh, well. Fares were cheap. Nonsense. Airlines have been claiming that for 40 years.
Little did we know that accumulation of misery was the future. Those of us flying in and out of Phoenix thought we were the world’s most disadvantaged with America’s Worst and USWhocares.
Now I fly to San Diego on Alaska, go across the international bridge to Tijuana’s decent airport to fly into Mexico or fly from the West To Europe. On a recent trip I flew four flights on American and two on Volaris. Who would have thought Volaris was much better. WE are the 3rd world now.
Road Warriors, you have my sympathy…there but for the grace of God.
A very insightful commentary on what specifically ails American; indeed, our major carriers. Once again, I would like to call your attention to a parallel phenomenon in the transport industry, as we witness the legacy US3 carriers fight each other in a spiral to the bottom.
Amtrak too is in a devolving mode due to the staid, archaic performance of its executive management, protected by the shadows of its Board of Directors. Amtrak’s business model is to simply turn its back on the National Network; cut its way to profitability (good luck) by destroying any semblance of an acceptable food & beverage service, and not restoring or replacing first class equipment west of the Potomac.
Lacking serious, experienced management talent to fulfill customer experience, Amtrak’s dining cars on long distance trains are cut and replaced by cold boxed meals; yet, Amtrak has yet to grab the “low hanging fruit” to increase revenues. For example, staff lacking the training and equipping to be functional bartenders; converting trains for cashless purchases; delaying implementing a Point-of-Service IT system to control inventory, waste, and cash.
When you see the first class meals on our domestic flights, the inability of FAs to properly mix a cocktail, and the diminishing physical comfort on these flights, it’s like these transport executives all attended the same community college to major in transportation.
The bottom line to this perpetual failure of American transport companies is frankly the lack of real competition. Instead of running their companies as if they had meaningful competition, these executives look at life as by not spending to enhance the customer experience, that’s another nickel in their bonus check for such “outstanding performance.”
…..and as your penance for firing Mr. Kirby, you shall spend one hour in the coach toilet on an American 737 MAX.
I love it when someone says “firing so and so was one of the hardest days of MY life.” In other words, please feel sorry for ME, but I dug deep and somehow found the strength to stab my friend in the back to save my own ass. I am the hero (not the POS) in this story.
Phenomenal re operations? Really? The guy who brought banking to AA and turned their LAX operations into a dumpster fire? No one answering central baggage phone lines ever (4 months to resolve lost bag claim)
It was one of my happiest days when he was canned,
As someone mentioned above everything AA does is to make another nickel and dime from a passenger. This is nothing at AA, than finding a way to make more money and provide the passenger less. Do I believe anything Parker says? No! He is just another full of shit and greed CEO in America.
Out with Parker and Kirby.
In a way, firing Kirby was a genius move. Then Kirby was able to go to and drive United into the ground, keeping American from looking so bad as American are racing to the bottom.
My Name is Patrick, I worked for American Airlines 14 years on the ramp. I injured my back and later was terminated by this fool from Turkey who cannot put together an english sentence. VERY corrupt, unethical company with one mission….. cash! Corporate greed reigns at American Airlines.
Take note. It’s simple math. Treat your employees well and generously compensate them and they will be beyond happy, thrilled to come to work and do their best every day. Being happy to be at work, assisting customers above and beyond, ensuring consistent stellar customer service will produce happy, satisfied customers who will return again and again, which creates unparalleled revenue, which keeps the board and executives happy with big fat bonuses and large profit sharing for all those hard working employees who have a personal stake in the company’s success. Then reabsorb a chunk of that profit in upgrades across the board that both customers and employees will enjoy, thus creating a company that the employees are proud to work for and customers gladly flock to fly. It’s cyclical. It’s certainly not rocket science. This is how Gordon Bethune transformed Continental Airlines from worst to first. Continental sucked for years before Mr. Bethune came along. And then, within a few years Continental became the most admired and beloved airline where their employees were happy and it showed. People loved flying Continental. Any airline can do it. Heck, any company can do it. You want a successful company, don’t put greed first. Put people first. Because at the end of the day, it’s people who will make or break a business. Money comes and goes. Life is about relationships. Treat people well, with value, respect and care and your business will soar.
CANT TRUST ANYONE WHO CHEATS AT CARD GAMES!