The Wall Street Journal carries a piece on how the CEOs of American Airlines and United used to work closely together.
With Scott Kirby becoming CEO at United, it’s a look back at Kirby’s role as President of American Airlines, and US Airways before that and how he and American Airlines CEO Doug Parker were both hired under Bill Franke at America West. Franke went on to serve as Chairman of Spirit Airlines and then Frontier and Wizz Air.
Kirby was let go as President of American Airlines. We’ll never get the real, full story there though here’s how Doug Parker tells it. Simultaneously Kirby was hired on as new President of United. American’s board paid out $13 million severance and didn’t get a non-compete.
This passage stood out to me in the Journal piece about Kirby’s leadership style.
Mr. Kirby has a reputation for holding strong views and drilling down into details. People who have worked with him say he welcomes creative solutions to problems. He bristled last year at a conference when an analyst suggested that “the perception that I hear from investors is that it’s Scott’s way or the highway.”
“I recognize that perception exists. I think it’s not true,” Mr. Kirby said at the time, adding that he reads every analyst report, and the transcripts of all his competitors’ earnings calls. “I listen more than, I think, almost anyone.”
Kirby definitely gets in the weeds, including in the management of frequent flyer programs, and he’s known to overrule the executives below him. It may be that the sense is he doesn’t listen to investors (which is good, the growth plan that’s benefited United was unpopular with investors) but my sense is that he’s less likely to listen to his own teams.
- The AAdvantage team had their own approach to rewarding highest-spending customers, rather than straight copying the revenue-based programs Delta and then United adopted. Kirby would hear none of it. US Airways had been preparing to go revenue-based and might have pulled the trigger even before Delta had the American Airlines merger not delayed things.
- It was Kirby and (now United Chief Commercial Officer) Andrew Nocella who liked the name “Platinum Pro” for American’s new 75,000 mile elite tier. The AAdvantage team hated it, and one employee who used to work in AAdvantage recently reminded me that some said it sounded like a Nevada strip club.
That said he can be dissuaded from views he starts with. When US Airways and American merged and began to offer reciprocal elite benefits, he thought that the two programs should offer status matches so that an American Executive Platinum was a US Airways Chairmans Preferred and vice versa. The AAdvantage team convinced him they weren’t ready to do this because over the messy data they were still working through.
Dividend Miles, before the America West merger, had 7 alphanumeric characters as their account numbers just like American AAdvantage. There were 100 million members of the combined program. There were 1 million identical account numbers that existed on both the US Airways and American files. It’s the overlap in account numbers that’s why, when you log into your AAdvantage account today, you have to enter your account number, password, and last name.