United Airlines is politically savvy, guided by President Obama’s former press secretary as Executive Vice President. The airline donated $1 million to President Trump’s inauguration. And CEO Scott Kirby immediately congratulated the President on his “historic” victory back in November and lauded his goals in announcing the most significant tariffs in the history of the United States.
Kirby can’t stop the tariffs, but by offering the President political cover in the business community he might get something in exchange later on? Now Kirby says that Trump’s trade turmoil will make the U.S. stronger. Has he gone insane? (HT: One Mile at a Time)
“We’ve been through periods where people are unhappy before,” Kirby told Liz Hoffman at the Semafor World Economy Summit in Washington, DC, describing US President Donald Trump’s recent tariff increases as opening moves in a game of chess.
“The president has a genuine desire to make things better for middle-class Americans,” Kirby argued, stressing that tariffs are aimed at middle-class job creation, “whether you think it’s the right tactic or not.”
Success, however, will take time, Kirby said, and the US needs to be patient. “We should all take a breath,” he said.
The problem is that Kirby harms his own credibility here. Either:
- He believes that this is 3D chess, or that tariffs are good, in which case you have to discount his intellect
- Or he doesn’t believe what he’s saying, and you have to discount his credibility.
Can employees trust his word in negotiations? Can investors trust his analysis of the business? It seems pretty clear that Kirby is not a stupid man. He’s demonstrated his acumen as CEO. But now he’s demonstrating a side that we weren’t sure we’d seen before, and it requires re-evaluating some of his past pronouncements as well.
Scott Kirby was all-in on President Biden’s agenda. He got out in front of vaccine mandates within days of President Biden’s inauguration when that was a priority of the Biden administration, and long before they attempted to make those mandatory. He was supportive of environmental causes and affirmative action. I’d described United as the most ‘woke’ of U.S. airlines, assuming that Kirby’s statements and United’s actions reflected a consistent manifestation of a worldview, rather than simply blowing with the wind.
United Airlines has an interest in slots at New York JFK. JetBlue’s market cap is down to just $1.4 billion. Kirby describes them as the only airline in play as an M&A target. And legal decisions around things like antitrust, pardons, and economic policy are no longer made on the basis costs and benefits (whether calculations are done correctly or not). Supporting the President’s agenda could be enough for antitrust signoff?
By the way, even temporary (‘strategic’ negotiating ‘3D’) tariffs are highly damaging to the economy. We’re creating tremendous uncertainty. And that’s not just bad for business, it’s also bad negotiating. Note not only that the tariffs themselves lack credibility because they keep changing, U.S. commitments broadly lack credibility because they’re inconsistent with treaties and with other promises, even ones made by this administration.
He’s pro stay on the good side of the Presidential administration because you might want to call in a favor like having an acquisition approved. One of the Big 3 is going to go after JetBlue and they will need a favorable voice. But most will see this as political. It’s not, it’s how big business is conducted.
Just another Suck Up
Like farmers, airlines will be pushing for billions in taxpayer funded welfare payments after the travel industry loses billions from Trump Tariffs.
I do not see the correction caused by the fear of the tariffs as a problem. The tariffs themselves may lead to a more equitable exchange between the USA and it’s trading partners.
Fear not! Once Pol-Potbelly #45/47 crashes our economy, Scott will sway with the winds again… soon he’ll be adding a hammer and sickle to the tails of those spiffy new 787s! Bah!
@jns — ‘not see’?? Say that again… You, personally, don’t have to see it, or ‘believe’ it, because it’s happening, whether you want it or not either. And it’s objectively bad. Like, wealth-destroying. An unnecessary self-own. The USA ran the global economy and world trade. Your guy just abdicated to the CCP, all for nothing…. No one is building factories here. And if they did, that takes decades. And no one wants those jobs. Besides, it’ll be robots, automation. You got conned! Not-sees, indeed!!
So, according to Kirby, 100% tariffs are good.
Accordingly, UAL bookings are down and the stock has dropped 38% since it’s January high and Kirby thinks that’s not too bad. Whatever.
I never thought I’d say this… 1990, you’re comments are more annoying that Tim Dunn’s.
Scott Kirby not only can’t compete in a chess match but he can’t even play checkers.
In checkers, you have to at least see a cause and effect of your decisions one step ahead.
UAL has been touting its great performance – which is only possible because their employees are paid about $1 billion less than AA, DL and WN employees, all of whose salaries have been lifted by their employers either in union negotiations or unilaterally – DL’s non-union employees.
Kirby knows full well that has growth plan doesn’t work at higher pay and yet he is living on the goodwill that Munoz developed with UA employees that nearly sank the company as the ESOP was unwound and UA pilots vowed to “squeeze the golden goose until it laid its last egg”
and a few data points show that it is Germany and Switzerland that are seeing the greatest dropoff in foreign tourist bookings, not a great sign for UA given its largest amount of capacity is in Central Europe and LH Group hubs.
Scott Kirby’s hubris is breathtaking. He might find out that all of the ill-will he wishes on every other airline just might come to roost at UA
@Captain Freedom — 100%? That’s child’s play. Try 3,521% for solar panels from SE Asia. Arbitrary. Cruel. Unusual. Not targeted. Not a scalpel. A nuke. Once it’s more than a 10%, etc., it might as well be one million billion gazillion coo-coo for coco-puffs…
By the way, and I’ve wanted to suggest this to you for a while, please consider changing your moniker to ‘Captain Liberty’ because there is a difference, and if you understood the nuance, you and others of sound mind might actually appreciate it. Here it goes…
“Freedom” is our ability to act without hindrance or external control, while “liberty” often implies freedom as a guaranteed legal right, especially within a political or legal framework.
So, ‘liberty’ means that someone else’s ‘freedom’ cannot deprive you of your ‘freedom.’
That is… unless you like depriving others of their freedoms… in which case, you would be opposed to the concept of ‘liberty,’ ironically.
Anyway, we actually need and should want liberty, lest we forget. Or, we can give that statue in NY Harbor back to France, since they seem to still get it.
@Roberto — Señor, apparently you can’t handle the heat! Ah, the spice! Picante! Seriously, if you cannot address any substance, just ad hominems, then that’s a huge win for me. I’ll take that to the bank, son. Let’s freakin’ go! Feed me more!
@Tim Dunn — Well said, sir. It’s all hubris. These CEOs who are attempting appeasement instead of speaking truth to power will ultimately pay the price. We need courage and innovation in the face of ignorance, lies, and irrational fear. Scott could actually be firm, offer a vision for his company and consumers, but instead it’s sloppy, milquetoast platitudes that fall flat. Like, take note, stand for something, or fall for everything. Yeesh.
A fool. United doesn’t have my business now and with a MAGGOT CEO, it won’t either.
Go woke – go broke
Like some of his tech brethren, Kirby is an opportunist. And also like them, it won’t be long before he regrets.
Cynical perhaps, but this is normal CEO behavior. Stay onside with those in power especially when in a business that is heavily regulated.
This is exactly what Wall Street incentivizes – Prioritize the next quarter and to hell with the long term. Trump has the best part of 4yrs left, and has proven to be an especially vindictive individual. It would be insane for Kirby to go against him. Maybe he feels he has to be more extreme in his support for Trump given his prior positioning. That is the risk when a business takes a stand on a political or cultural issue.
Kirby himself could be gone before Trump so he has little incentive to think that far out
@Tony — If only there was a sign, like, I donno, maybe a prior four-year term, say 2017-2021, which largely rode on the coattails of the prior administration’s economic recovery and successes (#44, yes, that one, the part-Kenyan that all you bigots hated so much, even though #45/47 acts more ‘black’ than him, bah!), and then the fallout from mismanagement of the pandemic at home… countless preventable excess deaths because he couldn’t help it to weaponize PPE and the vaccines, which saved lives… all culminating in his attempted coup on January 6, 2021. Yet, we all allowed this to happen again. Future generations will loathe us for our failures here. No need to save face anymore. Admit it. The guy is objectively bad for us all. The scapegoating and false narratives won’t fix this. We gotta hold our leaders, in government and business, accountable. Demand better.
I was really curious about this and whether it’s fair to critique Kirby (he is interesting!).
https://www.youtube.com/watch?v=RxNK8LWulo8&t=2589s
That’s the interview where the quotes are actually coming from. He sits down about 34:30.
He definitely provides some political cover, specifically when he talks about how we all need to take a breath.
However, he’s 100% dodging the questions on whether he thinks tariffs are the right approach to accomplishing the goal. He explicitly says there’s room to disagree about the tactics used.
You can make your own conclusions, but I think it’s safe to say he does not agree with the tariffs as a tactic, and he’s also giving the admin probably more cover than they deserve. I think Gary’s headline is straight up factually inaccurate – he never says anything truly pro-tariff, and reading between the lines he def comes across as anti-tariff. What he IS doing is asking for patience as we aren’t quite at the end of the journey yet, and he doesn’t think it’s over, and wants to give the admin room the maneuver.
@Bobby Fisher — Apparently, not. It’s actually ‘go woke, keep more of your customers, be more profitable.’ Why do you hate wealth, sir? Like, if you’re gonna do a fascism, ya gotta at least make the trains run on time. Bah!
Kirby isn’t woke or MAGA. He’s an opportunist. He probably lacks the capacity to be sincere to anyone’s face. Kirby definitely doesn’t care about anyone but himself and his accumulating wealth. Least not, the middle class or any of his employees outside of the C Suite or ALPA.
Holy shit! I finished watching his interview, and he concretely blames airport cost growth in NYC, CHI, and LAX for killing the U/LCC business model. He states that costs in those three markets are about $50/pax, which makes it impossible to offer $70 fares, as an example. He also said the those costs have had a 9% CAGR since COVID, which is insane!
He also says pax don’t like the fees and that’s part of it.
Gary, you’ll have to rename this blog “View from 1990”. There’s one thing about commenting. There’s another thing about tearing out everyone’s comments and offering analytics line by line. Even when I agree with him/her, he/she is annoying. Too much time on one’s hands.
At the rate the market is moving up, this market correction will be over soon.
@Bill from Maine — Hey, slick Willy, you can comment as much or as little as you’d like here. Gary’s a champion of free speech and expression. What do you have to fear? ‘Fear itself.’
Speaking of Maine, I must applaud your fearless governor, who knows that silencing opponents is not the answer, even though the President appears to be trying to do so against her and your state.
Just saying, censorship is not the answer. Book banning, often leads to book burning, and then people. Fight the good fight folks. Speak your mind while you can.
@jns — That’s cute.
On the economics, these terms have real meanings, not just ‘feelings’ or vibes.
Correction (10% short-term drop), recession (20% mid-term), depression (+30% long-term).
On the politics and propaganda, you must know that if it were ‘your team’ in-charge, you’d be calling it the actual ‘apocalypse.’
Let’s get real, you’re just a rabid partisan parroting Fox/OAN/Newsmax, and maybe your favorite right-wing podcast, ironically funded by global oligarchs and Russian disinformation money, on in the background 24/7. Sounds miserable. Like, take a step back, wake up, call your kids, and stop this crazy train while you still can. We didn’t need a mad-king. We need real leadership.
I’m no fan of Kirby but I never figured even a miserable person like him could stoop this low. Trying to angle for advantage is one thing, loudly backing policies that can easily destroy our country is another except he simply doesn’t care which can only lead me to conclude that he’s an odious swine.
Somebody needs to look up financial terms. A bear market is when there is a 20% drop from a recent market high in major indices.
@jns — Did I stutter? Never spoke of bulls or bears. Are you the new ‘wolf’ of Wall Street?