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?
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