Oscar Munoz stepped down as CEO today, turning over the reins to Scott Kirby. He becomes Chairman for just a year.
Munoz replaced Jeff Smisek, who was ousted in September 2015 amidst a federal corruption probe. Smisek was accused of paying off the Chairman of the Port Authority of New York New Jersey with a dedicated scheduled ‘Chairmans Flight’ to his vacation home and back in exchange for putting items United wanted at Newark on the Port Authority schedule.
This only came to light, of course, because of the federal corruption investigation into ‘Bridgegate,’ creation of traffic jams in Fort Lee, New Jersey as political payback for failing to support the 2013 re-election of Governor Chris Christie. The probe reached into the Port Authority, and while Smisek was never charged Port Authority Chair David Samson was ultimately convicted for extorting the flight from United.
Munoz took over in a rush. He lacked experience in the airline industry other than as a board member of the airline. However he began to get employees on his side before quickly having to take time out for health reasons. He was initially great for the airline’s culture and he green lit product investments – from Polaris, to coach snacks like stroopwafels, and improved on board coffee (the previous brand Fresh Brew was derided by customers as ‘Fresh Poo’).
Oscar Munoz Cutting The Ribbon On The First Plane Equiped With New Business Class Seats
Given his health challenges he was likely a short-timer. He was supposed to become CEO and Chairman but his ascent to the Chairmanship of the airline was delayed by the David Dao incident. He blew the airline’s response by apologizing that customers had to be re-accommodated — as opposed to being shocked, angry, or disappointed that a customer was dragged off and bloodied.
Ultimately though the most consequential decision he made was hiring Scott Kirby as his successor. Kirby’s history is as a destroyer of airline customer experience and as a micromanager, eliminating elite bonus miles and charging for water at us airways, insisting that American AAdvantage blindly follow the revenue-based programs of Delta and United rather than charting its own path and even getting so far in the weeds as to overrule the AAdvantage team over the name of their new 75,000 mile elite tier.
Since Kirby’s arrival at United we’ve seen a steady degradation of the Polaris business class product, from reducing service levels (dropping a flight attendant and pre-plating meals) to efforts to control alcohol consumption. Employee bonuses were cut. The airline failed to invest in competitive wifi in order to offer anything like Delta or American.
United has been the worst actor among U.S. airlines during the global pandemic, breaking the law by refusing refunds to customers for cancelled flights, making it harder to earn elite status (via partners), and devaluing mileage plus via higher award pricing on partner airlines. While other programs consider the need to be more generous, Kirby’s focus has been how to avoid giving anything to customers – even things they’re entitled to.
Munoz has good feelings surrounding him, he’s seen as a good guy, but his legacy is Scott Kirby. It may be that Kirby’s talking up job cuts has been strategic, positioning for a second bailout (that airline lobbyists are already pushing for), but also to scare unions into contract concessions.
Ultimately Kirby’s move to announce aggressive layoffs coming October 1, and to force non-union employees to take unpaid vacation days, along with moves against United’s customers may preserve enough cash for the airline to avoid bankruptcy restructuring and preserve himself as head of the airline.
By the way Kirby is also the most interesting airline CEO to listen to because he isn’t mealy mouthed, he says what he thinks more than you’d expect from other similarly-situated executives. And he now is on Instagram and has one post.
View this post on Instagram
Hi, everyone. I’m Scott Kirby, a lifelong fan of aviation and the new CEO of United Airlines. I’ve spent my entire career in and around aviation, including the last four years as President of United. While it’s a challenging time for the industry and our world, I remain energized by the opportunity ahead. We are laser focused on returning to regular service as soon, and as safely, as possible. In the meantime, we are #UnitedTogether to transport vital medical supplies, critical goods and healthcare heroes to places that need them most. I’m joining Instagram today to shine a spotlight on our incredible United family and our commitment to care for our customers. I’ll be sharing what I’m up to and providing updates about the current situation. I’m excited to connect with you here and hopefully soon in the friendly skies.
Munoz showed promise for United early on but missteps and his choice of airline President did in his legacy.