An airline’s CEO gets unlimited free travel, naturally. But United Airlines CEO Scott Kirby is unique. He and his family don’t just get to fly United for free. They can fly as much as they want on American Airlines, any flight in any class of service, as well.
That’s because Kirby was let go as President of American Airlines and immediately became President of United – in a move I hoped at the time would make both airlines better (it’s benefited United). This paved the way for Kirby to become CEO at United, since Oscar Munoz was always going to be something of a caretaker.
Given these unique travel benefits Kirby has, how should he think about his travel?
Q1: If Kirby wanted to fly, say.. from NYC to LAX, would UA or AA be the better choice for comfort in this scenario?
Q2: Would he get into F on AA or UA and would this travel on AA be considered non-rev or positive space?
Very curious about this. Thanks.
— mindbenderNine (@mindbendernine) August 28, 2021
Scott Kirby’s exit package not only included millions in cash and vesting of hundreds of thousands of shares in American Airlines, it also included lifetime travel on American for himself and his family.
Travel Privileges. Executive previously vested into lifetime travel privileges that include unlimited reserved travel in any class of service for Executive and Executive’s immediate family, including eligible dependent children, for personal purposes, access to Admirals Club travel lounges and 12 free round-trip passes, or 24 free one-way passes, each year for reserved travel for non-eligible family members and friends (collectively, “Travel Privileges”).
One caveat is that American Airlines won’t cover any taxes due on travel that Kirby receives from them for free. He can certainly afford the taxes. He can certainly afford to fly private. But this is all something he’d possibly factor into any decision.
So, should Kirby take advantage of this benefit? There’s no question that Scott Kirby is going to fly United when he can. It would be a bad look to prefer another airline. However, on a given non-stop route where United competes against another airline, his own airline could be sold out with seats available on American. Delta’s one-time CFO Warren Jensen also proved it’s a bad look for an executive’s family to bump paying passengers.
Kirby is an in the weeds kind of guy. He’d check flight loads before insisting on flying United. And it’s actually not uncommon for a CEO to fly another carrier, Doug Parker last year flew Southwest when his own airline’s flight was booked solid and he didn’t want to bump a paying passenger.
If Kirby had a choice, though, what should he do? In the route example given, New York to Los Angeles, United and American compete head-to-head.
- United only has 2 flights a day at JFK, American is scheduling 11 into the future (we’ll see how many they keep). Regardless American offers greater frequency and convenience at JFK. Bring Newark back into the mix and they both have convenient options.
- United’s Polaris seats are an improvement over what came before, direct aisle access lie flat, but they’re tight.
American’s first class on the Airbus A321T is a better product with just 10 seats in the cabin arranged 1×1.
American Airlines A321T First Class Cabin
This is definitely advantage American, but if Kirby wanted to be cozy with a family member he might choose United or downgrade to American’s 2×2 business class.
American Airlines A321T Business Class
- United’s soft product is generally better than American’s, but at JFK American is re-opening its Flagship Lounge and Flagship First Dining. His explicit Admirals Club privileges in his termination deal notwithstanding, boarding passes would get him access to Flagship First Dining which is superior to the Polaris lounge at Newark (which does not yet have an announced re-opening plan).
Flagship First Dining New York JFK
Miami First Dining Corn Chowder With Corn Fritters
While Kirby’s agreement didn’t include a non-compete clause in exchange for a multi-million dollar cash payment and vesting of hundreds of thousands of shares of stock (oops!), it did contain confidentialy and non-solicitation clauses. Kirby wasn’t supposed to use American’s confidential information at United, and wasn’t supposed to entice executives over to his new airline. It would be interesting to dive into whether there was any violation in, for instance:
- His scrapping United’s basic economy plan, delaying the rollout, and mirroring what he’d planned for American (banning carry on bags especially)
- Adding inflight credit card solicitation at United, since he said it was based on his knowledge of the success of the practice at American
- Bringing over long-time henchman Andrew Nocella, now Chief Commerical Officer at United
American, though, didn’t pursue a claim. Kirby was the big winner. And he’s helped to steer United’s ship during a crisis (including some underhanded tactics against customers) and he’s helped improve the airline’s operation. American, on the other hand, chose to make Robert Isom its President and it hasn’t improved its operation in the same manner.
Kirby gets to be CEO, Doug Parker was in the way of that at American, and he gets unlimited lifetime travel on both airlines. That’s a great problem to have.