Scott Kirby Appointed United Airlines CEO

Filed Under: United

United Airlines has just announced a massive leadership change, at least on paper. I think we all saw this coming.

Scott Kirby Appointed New United CEO

United Airlines CEO Oscar Munoz will transition to the role of Executive Chairman of the Board of Directors of United Airlines Holdings as of May 20, 2020, where he will serve a one year term. As of that date, United President Scott Kirby will take over as CEO.

Kirby was recruited to United Airlines in August 2016, as he previously held the same role at American. It’s pretty clear that he had a path to CEO at United, which he lacked at American (despite allegedly having previously been told otherwise).

Munoz took over as CEO at United in late 2015, as former CEO Jeff Smisek was fired over a scandal involving the Chairman of the Port Authority of New York and New Jersey.

What Kirby & Munoz Are Saying

With this announcement, here’s what Munoz had to say:

“With United in a stronger position than ever, now is the right time to begin the process of passing the baton to a new leader. One of my goals as CEO was to put in place a successful leadership transition for United Airlines. I brought Scott to United three years ago, and I am confident that there is no one in the world better equipped to lead United to even greater heights. It has been the honor of my career to lead the 95,000 dedicated professionals who serve United’s customers every day. I look forward to continuing to work closely with Scott in the months ahead and supporting the company’s ongoing success in my new role.”

Meanwhile here’s what Kirby had to say:

“I am honored to be named the next CEO of United and to succeed Oscar, whose leadership has been truly transformational for United Airlines. I look forward to working with Oscar, the Board, our established leadership team and every United employee as we drive forward our proven strategy and focus on being the airline customers choose to fly and return to time and again.”

My Take On Munoz’s Time At United

I’ve never met Munoz, though he has always come across as a nice guy… and frankly I think that’s about all I can say about him.

The truth is that United’s culture was awful when Munoz took over the role. You still had division on the Continental and United sides, and with the scandal that Smisek caused, the company was at a low point.

Prior to that, United had several bad CEOs who were strongly disliked by employees.

That’s why I think Munoz was the right guy for the job at the time. Employees love Munoz, and I think that’s a great trait for the CEO of an airline, even if he doesn’t bring much else to the table.

In general you have two kinds of airline executives:

  • Those who know their operation inside-out, and if you have a conversation with them they can literally tell you everything about the airline, from the seat counts on each plane, to the exact number of planes in the fleet, etc.
  • Then there are those who understand business overall, but actually aren’t that knowledgable on the day-to-day operation; if you asked them a question they’d point you to one of their subordinates

In that regard, Munoz definitely fit in the latter category. He never seemed to be terribly knowledgable about United’s operation. That’s totally fine as far as I’m concerned, because that wasn’t the priority at the company at the time.

What Will United Look Like Under Kirby’s Leadership?

Kirby is a notorious numbers guy who isn’t a people person. In a dream world he’d offer Spirit Airlines service at non-basic economy prices.

So what will United look like under his leadership? Well, to be honest, probably exactly how it looks right now, because he has been more or less running the airline for the past couple of years.

I think Kirby has evolved a bit compared to his US Airways days. I don’t think he sees the value in offering premium service across the board, but he is starting to see the value in investing strategically.

He sees the value in investing in products in some areas (like United’s huge focus on installing more premium seats), and at the same time doesn’t see the value in investing in other areas (United is the only one of the “big three” carriers that doesn’t allow carry-ons with basic economy fares).

I don’t think much will change when he’s CEO, though I do wonder what it will do to morale, and employees buying into the vision.

Bottom Line

Kirby being appointed United CEO is the least surprising move ever. Truth be told I’m actually not as horrified as some others by this move, because I think he has already been running the airline for the past couple of years for all practical purposes.

I think the only wildcard here is what this does to relations between employees and management.

And seriously, you’ve gotta give America West credit here. Who would have ever thought that two guys from America West would be running both American and United? Wow…

What do you make of Kirby being appointed United CEO?

Comments
  1. I’m not sure why you’re not as horrified as some are. He may have had a lot of influence over the past few years, but at a minimum he was on a leash. Now he’ll be completely unhinged and empowered to do his signature cost-cutting, but this time on steroids.

  2. I think for most of us who fly economy, Munoz was not a good CEO.

    Under him, we saw United introduce a restrictive basic economy, tightening of the United seats (e.g. 3-3-3 to 3-4-3 on the 777s), as well as removal of PTVs on short and long haul aircraft. Last year, Wall Street Journal asked the Big 3 CEOs to do an interview about their economy seating while sitting in economy, and only Munoz didn’t show up. I wonder why? But sure, if you have the money for Polaris, he made sure you were treated well and gave them more room and seats. But of course, economy got tighter to make room for the people with bigger wallets. I limit myself to only short (and direct) flights with United now.

    Oh, and let’s not forget how he originally called Dr. Dao “disruptive and belligerent”, even though all he did was take the seat he paid for so he could set up a charity hospital in Louisville.

  3. @Sam “now he’ll be completely unhinged and empowered to do his signature cost-cutting, but this time on steroids.” – yeah that’s not how public companies work, just because he’s CEO.

    I don’t like him as much as the next guy, but I do agree with Lucky here that you won’t see as big of an impact as you think, at least not over the next 1-3 years.

  4. Munoz had high expectations coming in but he failed miserably.
    He is incapable of leading an organization, doesn’t care about his customers, and just keeps saying nice things without actually putting them to action.
    Both Munoz and Kirby are/will be terrible CEOs.

  5. It really points to a lack of creativity in the hiring process at these airlines. It’s just a shuffling of the deck.

  6. There are things the CEO drives and there are things the airline business drives. Complaining about economy seats is interesting because I think the industry in general is packing as many people as possible into planes. Since they believe everyone wants basic economy, of course they will shrink the seats and add as many as possible. If people were willing to actually pay more, then the trend would go the other way.

    About Oscar, how much of this is driven by his health issues?

  7. Scott should watch his back, as the next VP to accrue 400 PlusPoints can now Skip Waitlist at any time and take the CEO job.

  8. I can’t wait to the first contract negotiation process! I’m sure the employees, even though they knew this would happen, are not enthused at all. I give Kirby 3 years tops. He’ll find a way to make United worse and worse, just like he did American.

  9. Can someone please send Kirby (and 99% of other executives in the US) to a fitness+nutrition boot camp and afterwards to an Italian tailor?!?
    The fit of American business clothing looks absolutely horrible…

  10. I hope that means that he’s on the way out soon. If it weren’t for Smisek, Kirby would be the worst thing that ever happened to United. He just wants to become Spirit Airlines, except Spirit is actually good at what they do.

  11. In general you have two kinds of airline executives:

    @Ben: You forgot there is a third kind: Doug Parker, who does understand neither …

  12. Why are all of these USAIR rejects running 2 of these dreadful Big 3 airlines? Didn’t they bankrupt USAIR and chase away customers? Peter principle?

  13. @Gene & @ Max: ROFL…

    @Juan, dude, it’t not even worth me fact checking you on here w/ multiple links to correct you, come on…what reality are you living in…

  14. Well to all of you complaining about Kirby, American went to sh*t right after he left. The guy knows what he’s doing and we’ve got to remember airlines are companies that are trying to make money, not trying to please someone that is not willing to pay for comfort/space.

  15. It is funny you say the new guy is not a people person. I have a friend of mine that was just hired for a Corporate Director position at United. This person had to have a 1 hour interview with Oscar Munoz during her interview process. You may think that “oh, it is a Director role”. I have never seen a CEO of any of the many Fortune 500 companies me and my wife have worked that had to interview a candidate for a Director role. Thus, it seems like Munoz was really a people person so too bad the new guys is not.

  16. Again – seems like people are not appreciating your point that Munoz was not running the day-to-day operational show for the past couple years…Kirby already was. I don’t think you can overstate how removed a CEO can be from many of these decisions if they have someone in the President and COO role who they trust to drive all of the operational decisions.

  17. Ben, why should give America West any credit? The reality is simply that US airlines have set extremely low standards for their C-suite teams.

    Parker is infamous for his alcohol abuse and under his complete lack of leadership, AA’s stock continues to underperform whilst morale is at an all-time low and he keeps having to fight with unions.

    Kirby is universally hated and one of the few things he did at United, as you reported, was an idiotic lottery award system for employees which further hurt United’s morale.

  18. I valeted Munoz and his family’s car and from the few minutes I met them they seemed like nice people. (And the hotel I was at he was a regular, with the hotel staff liking him a lot too)

  19. Those who tout Kirby’s accomplishments at UA would do well to remember that UA’s network was horribly run by ex-CO people around its hub cities – focused on the local market – and not as a connecting airline. Kirby couldn’t help but make UA much more efficient by doing many of the things that hub airlines should do. Still, UA’s on-time has dropped to the bottom of the big 4 and 8th out 10 US airlines year to date according to the DOT. UA might be improving revenue but its on-time performance relative to the industry has fallen.

    Let’s also not forget that Kirby, while at USAirways, was the architect of the LGA-DCA slot deal that rocketed DL to their now dominant position in NYC in terms of flights, seats, and local NYC passengers – because US couldn’t figure out how to use the one-quarter of LGA slots they held. On the DCA side of the deal, the DOJ required US and AA to divest about the equivalent of the slots US received from DL – minus what was given to B6 and WN – as part of the AA/US merger. So, DL now has nearly half of the slots at LGA and also has grown to the largest carrier at JFK (which UA’s former management left) and AA/US has about the same share of slots at DCA as US had before its merger with AA.
    When DL and UA agreed to swap slots when UA left JFK, the DOJ blocked the EWR/UA side of the deal and then the FAA relaxed slot controls at EWR while DL retained the slots it gained from UA at JFK.

    The bar for Kirby’s success wasn’t terribly high given how badly broken UA was from a network standpoint – Kirby’s specialty.
    But his resume will always include some very significant strategic failures. Add in some of failures by UA’s predecessors at UA and Kirby inherits several things that can never be undone and which shifted the competitive advantage to UA’s competitors.

  20. So I wonder which one of these two (Munoz or Kirby) was the bigger proponent of the new Mileage Plus PlusPoints system that went into effect on December 4?

  21. I love how the article fails to mention the company had a paying customer beaten and dragged off of the airplane in front of everyone while the CEO said he was re-accommodated. You couldn’t pay me to fly United.

  22. For many of us in Houston, it is a non event. United’s disregard for their customers is so bad, I haven’t flown them in years. They are truly the option of last resort. I’m flying to the UK next month, and its great to now have nonstop from Houston to Manchester on Singapore Air.

  23. Kirby is Doug Parker Jr… just a little smarter. I do not think customers will be happy at all. Constant devaluations to soft product and the mileage program will continue to disappoint. MileagePlus is now one of the most expensive programs to redeem partner awards in. I see little value in it.

  24. Enough about the Doctor. He could have manned up and left the plane instead he got dragged off like a bitch, and got a payday out of it. none of the other 150 +/- fellow passengers volunteered to take his place.

  25. Lucky

    Gotta admit, this is probably the first time I’ve agreed with you! I completely agree with everything here … UAs been basically run by him the last few years and don’t expect any drastic changes …. Keep growing in your big hubs and make $$$

    Besides; Oscars still going to be down the hall …..

  26. Munoz was not positive for United at all as far as I am concerned. United used to have a almost upscale feel and reputation, but it’s rep has been on a rock slide for the past 10 years or so… Bring the old tulip U back for starters….

  27. In my previous role at the UA, I worked a lot with the team redesigning the AC LOPAs. We worked on the 46J 767, redesigns on 777s, and all the pending 787 redesigns, where we added an average of 5-10% seats, removing Lavs, and Carts, along with an average of 1.5″ of leg room, can tell you this has been Kirby’s airline for awhile now, those are all his signature moves from Network and RM at AA.

    Watch out for 28/29″ pitch on NBs coming soon as well, though they won’t be admitting it in the marketing material. Back few rows on some of the airbuses, already have it. Our marketing team fought this every step of the way, but the Engineers and RM and Network teams, didn’t really ever listen to us.

  28. @DC. Lets not pretend Dao is some sort of hero. He is a malcontent who refused to comply with officers and physically resisted removal. After being removed from the aircraft, he then runs back on, and was injured simply because the officers needed to use force to counteract Dao’s violent efforts to impede his removal.

    No excuse for what UA did here – removing a seated paying customer to make room for non revenues in that situation is violative of the contract of carriage, just plain wrong and UA deserved the shaming that it got. But Dao is a piece of filth. After this, he – or his supporters – then opportunistically and cynically alleged racism was behind it. Then he collects a huge payday.

    He should have been compensated for his missed flight and any actual damages caused thereby. The rest, UA should have gone to trial for the injuries and exposed him as the charlatan he is. Then he should have been put on no fly lists for the remainder of his life. No one should have to risk flying with Dao as a passenger, who believes it is his right to endanger the safety of all else on board as his demands must be taken care of before all others.

  29. @ Joe — The first time you’ve agreed with me?! Please tell me you’ve only been reading for like a day. 😉

  30. I could not care less about service. I care solely about comfort and cost. I’ve been shifting away from UA for a few years, even though I’m EWR captive. With the new plus points making it near impossible to maintain 1K, ‘20 will see most of my business shift to DL domestically and international carriers across the pond. Kirby is great if you’re an investor. Not so much the traveler.

  31. This is a disease as it is across all big companies… The magic word is money.. bonuses raises.contracts.. but never and idea to keep costumers coming… People are the ones falling on their game. Paying more for the same food all season round… When people stop having that mentality that a perk makes you a better person…and tou are just one more number in a load..

  32. I work at United for 20 years, my direct supervisor used vulgarities and offensive language all the time. I reported this to the manager and emailed to top management (including Mr. Munoz) absolutely nothing was done. So, not only passengers are being insulted and disrespected, believe me… Disgrace

  33. Don’t forget that United steal pension money from thousands of workers when they went bankrupt. At that time for me, $87 per year of service, all went down the drain… Now all I have is SS. So much for working at the largest airline.
    Just one year later turn record profits. UAL/United is a total rip-off. No Shame!

  34. @DC — “I love how the article fails to mention the company had a paying customer beaten and dragged off of the airplane in front of everyone …” —

    So was this incident where passenger Dao got physically dragged off of the aircraft, in a rough manner, the direct action of any United personnel on the aircraft? Did anyone from United lay a hand on him? Did he incur his injuries from being uncooperative with security and not because of actions by United’s onboard personnel?

    Event — United notified ORD security and, even though ORD security should have handed the call to Chicago PD, since it had no jurisdiction to board any aircraft, ORD security was the agency that did the dragging of passenger Dao off of the aircraft … if anyone wants to place blame for the way that passenger Dao was physically treated, blame ORD security and not United, which did nothing wrong on this physical incident … one can debate United’s “overbooking” procedures and their handling of those, but not how passenger Dao got physically treated while being uncooperative with ORD security on that aircraft!

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