Oscar Munoz is leaving United as CEO and Scott Kirby will take on that job May 20, 2020. Munoz will become Executive Chairman for one year. United’s current chair, former FAA administrator Jane Garvey, will retire from the board at that point. This mirrors predictions I have offered here for some time.
Scott Kirby wasn’t going to become CEO at American Airlines because Doug Parker wasn’t planning to go anywhere. As American Airlines considered its leadership future Scott Kirby was out with a huge severance and no non-compete clause. He immediately landed as President of United Airlines and my bet was this would make both airlines better off (it didn’t seem to help American).
Oscar Munoz Played An Important Role at United
Munoz came in as CEO when Chairman and CEO Jeff Smisek was ousted in a corruption scandal, agreeing to a requested bribe by the Chair of the Port Authority of New York New Jersey in exchange for favorable treatment at Newark airport. While Munoz was a long-time United board member, he had no experience running an airline. However he put a positive face to the airline, spending time listening to employees and helping to turn around their faith in the carrier.
Oscar Munoz With United Employees
Oscar Munoz was supposed to become United’s Chairman, but that was put off in the aftermath of the airline’s David Dao passenger beating fiasco. My view at the time was that this delayed Scott Kirby’s ascension to the CEO role.
Oscar Munoz’s five year contract runs through 2020 and he’s been unwilling to speak to what happens after that. It’s been clear for some time that Kirby has been running the operation while Munoz has spoken to high level narratives about the airline. These roles have seemed as though they were already in place and this announcement just recognizes it.
What Will The Future Look Like Under Scott Kirby?
United’s leadership team has been transitioned. It’s no longer the ex-Continental crew running the carrier across the board. And they seemed to have learned some things – beyond just Kirby’s growth plans, which continue apace.
While there have been a procession of soft product cuts, such as to the airline’s business class product, and devaluations to the United MileagePlus program – all things I expect from leadership under Scott Kirby and Chief Commercial Officer Andrew Nocella who followed Kirby from American – there’s also a new recognition of the importance of elite frequent flyers and business travel focus, such as with the introduction of Boeing 767s with more business class seats.
Kirby’s strength has never been the employee relations that Munoz has managed effectively. In fact where there have been stumble steps along the way those have been at Kirby’s feet. It will be important to watch how he steps into the shoes that Munoz has filled since Jeff Smisek’s departure. Will there be changes we’re going to like as Smisek had promised after the merger?
Though there’s been some growth – and will need to be more as Kirby steps into the CEO role – Kirby’s history is one that suggests management from the spreadsheets. If soft product can’t be demonstrated to drive bottom-line revenue, it’s not a worthwhile cost.
His history in the industry is as a hard nosed numbers guy, both for better (especially in tough times at US Airways) and for worse (as customer experience gets shaved). He’s taken things too far in the past, such as elimination of elite bonus miles and a plan to charge for water on board at US Airways, moves where he’s had to reverse course. It remains to be seen whether he can moderate those tendencies as he formally takes the reins at United.
Very bad news for United customers. Even though I’m a MM, it may soon be time to jump ship.
Why would he change his approach now? That makes no sense at all. They hired him based on his past style. Expect a race to the bottom. People like this don’t have pride in customer service. It’s all nickel and diming customers.
I’m a numbers guy to. And to me the numbers behind United’s frequent program changes don’t add up. Next year I expect United will get less than 2% of my airline spend. Good luck Scott.
Good news for Delta
I expect you to Bend the Knee Dug whenever we meet.
it’s the kiss of death for United. Bean counter Kirby has been cheapening the product ever since he came aboard. I used to get a real breakfast on the 7am flight from BZN-ORD, now we get a snack box put on a plate, sometimes even less. Guys like Kirby go from one job to another, destroying the brand and alienating the customer. But they keep getting hired.
With RT intl trips to KHI (on LH, TK) and to SYD (on SQ or UA), and a TCON flight (on UA), all in at least Premium Economy, that I will credit to my SQ account, I should quality for SQ Gold and a second *A Gold by May 2020. United and I will then finally part ways, despite being a UA 1MM and 1K for 2020.
So, Kirby is free to unleash his worst business instincts, I could not care less. It will be water under the bridge as I will be flying with any *A carrier that gives me the best deal and then crediting all the flight and status miles to SQ.
Flying domestically as a SQ *G would entitle me to continue using UA lounges, so there is little down side to leaving UA, now that they’ve decided to slaughter their “cash cow” and the airline’s only bright spot through its rough post-merger years…
It’s “goodbye UA” and truly liberating!
Good news for DL and WN. Kirby has shown no ability to manage operations to a level that would compete with either one. However the airline was smart to buy Airbus rather than placing more bets on the ill-fated 737-MAX.
So I only started flying seriously for work in 2016 and have been platinum for two years and now 1K for 2020. I’m 34 years old. I see all of these million milers saying they are going to jump ship and I don’t really get it. Maybe we have different aspects of flying that are important to us? (I just want to get there on time!)
I fly mostly domestic but 1-2 paid business class tickets each year.
Am I suffering from the soft bigotry of low expectations? Maybe I haven’t been around since the “golden age of flying” but to me, United is great and yeah things could be better but it’s an airplane first, restaurant/club second. I fly out of DEN.
I guess I want someone who is defecting from UA to explain in specific what is driving that, because I don’t see it from my 75+ segments every year.
@Steve S — The short of it, which you should have noticed if you’ve been paying attention, is that UA has decided to go completely revenue-based in order to reward their “best” customers. Those of us who went out of our way to spend $15K exclusively with UA to make 1K, were not valuable enough customers. Now to make 1K I would have to spend $24K, for no noticeable enhancement in benefits.
I cannot afford $24K to make 1K, and even if I did, I would not go for it because it is simply not worth that much to me.
Solution? Move on to greener SQ pastures!
Extremely bad news for United; Scott Kirby, who I met personally. He’s going to do the same things he did at America West, USA Air and American Airlines. Terrible management material.
catalina56
DCS speaks the truth. Kirby will wreck United worse than it’s ever sunk to.
Short-term profit grab with draconian changes vs. long-term market growth due to a superior market operation.
Who else would make a Parker-led AA look good?
Steve S – I’m with you. And have been a 1K for 15 years so have been through thick and thin, a heck of a lot of it thin. United is in a much better place now than 5-6 years ago. the most noticeable change is the better attitude of (most) employees. The domestic FA service is overwhelmingly better as new hires without the legacy baggage come on board. Long haul still has the surly ones due to seniority but new ones coming in have improved that a bit too. And there’s new routes (India non stop from SFO, the night flight to HKG, lots of new Europe/Israel service from everywhere).
And just look at the financial performance of UA with Kirby vs AA without him.
As far as the FF program goes and changes to the elite qualification, so far they don’t affect me. I hit $18K spend in October and 54 flights in September, and I expect to do the same next year. And if anything these changes are for the better. If you get too many 1Ks chasing the same number of upgrades that itself devalues the program. So thinning the herd by raising the qualification bar makes sense. Some lose out, some gain.
What worries me a bit is that Kirby’s lack of people skills has been balanced by Oscar, and on his own I’m not confident that balance will be kept. In the short term Oscar will probably still be around in the “executive chairman” role. But UA would be advised to give Kirby a #2 with Oscar’s skills to keep that balance right.
I have been a loyal United customer for years but the recent changes to the Milage Plus program and lousy service onboard international Polaris business class has done it for me. Good luck in the race to the bottom!
Many of the goods that have come from UA, especially from the operations dept of things have all been Bc of Kirby … he’s been calling the shots way longer than people think …..
Stop this doom n gloom outlook … things will be fine at UA especially since Oscar is staying in the Willis tower in a crucial role …
If a CEO messes up, who’s responsible for them? The board .. who will be running that? Oscar … enough said
Scott Kirby is a dark cloud that will ruin customers’ experience flying on United.
It will only get worse with him running everything.
Is that why United seems to have the fullest planes out of every airline I fly? So all this doom and gloom language is a bunch of anti-United BS. Kirby alone does not run the show as the board is watching his actions. Come on now. He is on the thrifty side, but that is his style. America West was a good airline and that’s where he mainly came from until they merged with US Airways. Everyone seemed to be happy there until US Air merger.