United CEO Scott Kirby On Wealth Tax, Flying Private, And Being Betrayed By American

United Airlines CEO Scott Kirby is one of the airline industry’s most outspoken people. He sometimes rubs people the wrong way, and other times he downright confuses people. However, no matter how you feel about him personally, there’s no denying that he has done an amazing job leading a change in trajectory for the airline compared to competitors. That brings us to the latest fascinating interview featuring Kirby…

The 10 most memorable things Kirby said in NYT interview

Yesterday the New York Times published an interview with Kirby, and as usual, it contains quite the claims and takes. I’d like to briefly share the 10 claims he made that I found to be most interesting (and we’ll ignore his schedule, which he claims is the most unusual of any CEO). In no particular order:

• Kirby defended charging more to avoid a middle seat by explaining that “there are some customers who want to sit in a window seat or a better seat, and that costs money to deliver,” and says the way to give everyone what they want is “to charge for the services and products that those customers want”
• Kirby says that while airfare has gone up, “the truth is they’re really bouncing off an artificial low from Covid,” and four out of eight publicly traded US airlines are going to lose money this year, so they “have to charge enough that it covers the cost of flying, and it’s expensive to fly airplanes”
• Kirby says that people confuse management and leadership, and his job is “really to make five decisions a year — the big decisions with no clear right or wrong answer that only the C.E.O. can make”
• When Kirby was fired from American 10 years ago, he said it didn’t sting, but “it felt more like a betrayal,” and he “wanted to go somewhere else and prove something”
• Kirby says he’s “a better C.E.O. of United Airlines because of what happened” at American than he “would have been a C.E.O. of American,” and “it did force introspection”
• Kirby believes that “wealth inequality has become a danger to our society, and we need to address that,” and he suggests “we should have a national wealth tax,” and “we should have inheritance taxes that get close to 100 percent at some level,” and he “would pay them”
• When Kirby boards a plane, the first thing he looks for is “smiling, positive flight attendants”
• One of Kirby’s most contrarian takes is he thinks “A.I. is going to be really powerful, but we are in an investment bubble,” and “there’s just no way it’s going to generate that amount of revenue”
• Kirby thinks “the future of the United States is incredibly bright,” and he is “not down in the dumps like a lot of people,” and he thinks “people on both sides of the aisle want to do the right thing for the country”
• Kirby will only “occasionally fly private,” and when he does, “it has a P.R. risk,” and he also thinks it’s important to fly commercial so he can see both United’s product and the product of competitors

I can’t help but find Kirby’s takes to be interesting

As I’ve often said, I’m conflicted on Kirby. I absolutely think he is doing an amazing job leading United, and he is charting a very clear course for the airline. It’s also amazing to think what he was known for at American up until a decade ago, and the completely different approach he has taken at United.

I do have to say, I can never exactly figure out Kirby’s public persona. On the one hand, I very much respect how honest he is, and how willing he is to talk, even if there’s not necessarily much upside for the airline or him. You don’t hear many airline CEOs publicly expressing support for close to a 100% inheritance tax (however one might feel about that).

But then he’ll also often make claims that are just so outlandish, where I can’t help but wonder if he’s being sincere, or just gaslighting people. Take for example Kirby’s bizarre narrative about creating a mega airline that all Americans are proud of, suggesting that’s good for consumers. I just find that to be such an indefensible claim. Does Kirby really believe that, or…?

Lastly — and this is where I sound like an airline apologist, but really, I just understand basic math — I find it funny how some people are enraged by the headline of this story, which is that “United’s C.E.O. Says It Should Cost More Not to Sit in the Middle Seat.”

Let’s be clear — another way to phrase that is “United’s C.E.O. Says It Should Cost Less to Sit in the Middle Seat.” The public likes to pretend that airlines are these high margin businesses that are just screwing consumers, but that’s not actually the case. A majority of passengers at US airlines are being transported at a direct loss, with the profits being made up for by the high paying passengers, as well as loyalty programs.

Better segmenting customers is actually one of the things that has allowed the legacy carriers to become profitable even while having historically low fares, adjusted for inflation (not at this very moment, but more broadly in recent years). Many people act as if we’re all entitled to $99 transcon fares while also expecting an amazing experience. That’s just not realistic.

Bottom line

United CEO Scott Kirby had a fascinating interview with the New York Times, where he chimed in on a wide range of topics, as usual. A lot of airline CEOs limit their interviews to carefully rehearsed talking points, while Kirby isn’t afraid to speak his mind, for better or worse. From how American “betrayed” him, to his takes on AI and an inheritance tax, Kirby certainly didn’t hold back…

What do you make of this Kirby interview?