Should United’s CEO Fly American When Traveling With His Family?

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?

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.


    United Polaris

    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.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. It’s smart for executives to expose themselves to competitive products and get their heads out of their own bubble. That’s one compelling reason for Kirby to fly AA. God knows no one at AA takes an interest in their hard product before they financially commit. Parker may need to fly more on Spirit, if that’s his domestic aspiration.

  2. I would be curious to know if the flight attendants or airport staff know. Presumably, his reservations are coded specially. If I was the JFK station manager for American, I would make a gate announcement that our airline is so great the CEO of our competitor is flying it today.

  3. This article is so unnecessary. ALL officers of an airline usually have compensation packages that include travel for life. It’s an industry perk and not out of the ordinary. Scott Kirby LIVES in Dallas and commutes back and forth to Chicago. I wouldn’t be surprised if he takes whichever airline fits his schedule and has the type of seats he’s looking for. It’s really that simple. When I lived in the PNW, I had privileges on my airline as well as a competing airline. I took whichever flight was most convenient and had open seats.
    So who are we to speculate which airline he “should” take? That’s his business, not ours. He earned it.

  4. Having destroyed American’s product and service, in the mold of doing the same at America West and USAir, why would he fly them other than schedule and he gets preferential handling.

  5. “In the weeds” -an expression used when persons are near or beyond their capacity to handle a situation or cannot catch up …methinks words (expressions) being used without knowledge of what said words/expressions mean

  6. Unless it was properly negotiated, or Mr. Kirby left as a retiree of AA, any “free” travel on AA might be federally taxable to Mr Kirby. I have to believe he was smart enough to get around this, but maybe not.

  7. What CEO wants to fly with family, on their own airline, and be faced with employees complaining to them throughout the flight (or even on the ground by gate agents or ramp/tech ops folk). Would you want a meal served to you,or your kids, by a disgruntled flight attendant? At least on a different carrier, he might not be as much of a negative target, or even might have some extra service attention given by a crew trying to impress how much better they perform the job versus his crew.

  8. What a load of crap this article is. United’s Polaris is far superior than anything American offers. American has narrow body flights on transcon, whereas United offers wide bodies. Apples to oranges, United wins. Add to the mix United Superior lounges at newark, and the clear winner is united. No reason to ever fly American on this route.

  9. Hypocryt …demands his employees be vaccinated “against” Covid even those who never see the traveling public (those who keep us flying, mechanics, facility maintenance, baggage handlers…etc..). Employees who have been essential workers, those that lost their pensions and have spent decades keeping the UAL friendly skys ahead of the game year after year despite bancrupcy and the economic ups and downs without even an option to test in lieu of immunization and then takes an option to fly his family on an airline with employees who does not share that same requirement! So sad and shameful. Shows his arrogance and not the leadership UAL employees deserve…tragic!

  10. The bottom line is “ You get what you negotiate “ and it is what it is for the deal he made. Right?

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