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.