United Chairman and CEO Jeff Smisek is out. So are United’s executive vice president of communications and government affairs and their senior vice president of corporate and government affairs. Smisek is replaced as President and CEO by board member Oscar Munoz and board member Henry Meyer III becomes non-executive Chairman.
The departures announced today are in connection with the company’s previously disclosed internal investigation related to the federal investigation associated with the Port Authority of New York and New Jersey. The investigations are ongoing and the company continues to cooperate with the government.
Smisek actually sat at dinner with the Chairman of the Port Authority which is in charge of United hub Newark airport, and listened to the Chairman’s request for a special flight to and from his vacation home in exchange for official actions. And instead of notifying the FBI, United provided the flight.
If fuel prices hadn’t come down, Smisek would have been replaced long ago. In the end it’s the company’s need to distance themselves from illegal activities that turned out to be his undoing.
For United flyers, though, it’s hard not to breath a little bit of a sigh of relief although it’s not clear what changes in company culture – any any – we’ll see.
If the Continental board hadn’t pushed out Larry Kellner prior to the United merger I tend to think United, and in some ways the industry, would be different today. Kellner was a great student of Gordon Bethune — who incentivized and inspired the best from his employees and drove everyone to operational excellence. Under Bethune and then Kellner Continental was the best airline in the U.S. That — and keeping United from merging with US Airways (which wasn’t really going to happen) — was the idea behind their merger with United. United had been badly run for awhile, and the thinking was that United’s problems would be fixed by that same leadership.
But the leadership of Bethune and Kellner was already gone by the time of the merger. And under Smisek management came to resent their customers and their employees.
- Frequent customers were called “over-entitled”
- And employees are blamed for the airline’s problems
- They straight up lie to customers when hiding information from them.
- United’s twitter team diagnosed one challenge for the carrier as having too many customers.
- And they turned customer care over to their lawyer.
A month ago I wrote that Smisek’s United wants to become more like AT&T, but its customers stand in his way.
Oscar Munoz has been a Continental (and then United) board member since 2004 and has served as president of CSX Corporation and previously worked at AT&T, Coca Cola, and Pepsi.
It’s my hope, and for all United customers, that a change in leadership at the top represents an opportunity to bury the past several years — as well as stop ‘managing by doing what Delta does’ — and bring United back to greatness.