United CEO on First Year in Charge: ‘We Need to Treat People Better’

Yesterday United Airlines’ CEO Oscar Munoz sat for a lengthy interview session with CNBC’s Jim Kramer where he discussed his first year at the airline, new President Scott Kirby, and the next phase of the airline.

The friendly interview allowed Munoz to push the dominant narrative right now of an airline that is still in transition nearly a year after he took over from ousted CEO Jeff Smisek. Although Munoz took his leadership role in September 2015, he was quickly sidelined by a heart attack that forced the company to hit ‘pause’ on major changes for half the year.

Munoz was quick to give credit to what positive changes United has made to his executive team, which is still one in transition. “The operating team at United has done an amazing job at transforming,” Munoz told Kramer. That team includes a new CFO and a new Chief Commercial Officer appointed earlier this month, as well as Scott Kirby, as of Monday United’s new President and a surprise hire from rival American Airlines.

Of Kirby, Munoz said that he was, a “Great addition to the team and we’re glad we have him.” Kirby’s hiring is notable for a number of reasons, but perhaps foremost because Munoz’ predecessor had consolidated executive power to the point where it had become obvious that United had a shallow leadership bench. Munoz, who came from the rail industry, has made hires to fix this weakness. Today he said of Kirby, “Scott’s sort of the icing on the cake so to speak.”

“We may have the best board in the industry along with the best management team,” Munoz said

Beyond United’s leadership changes, Munoz addressed capacity challenges, business travel, and the airline’s ongoing labor challenges. For the former, he wouldn’t address pricing directly, but said that
“it’s a competitive and dynamic world. We have to differentiate our product in many ways and pricing isn’t the just the only one.”

United, which has a Houston hub, is hit not just by oil prices on the supply side but by business travel of oil-related companies. “The energy sector is hurting. Big,” he said. He professed optimism for increased business travel in the fall in both the banking and consultant world.

On the difference between running a railroad and running an airlines, he said “at the end of the day the difference is it is more of a people business at the airline. I need to absolutely engage and create that shared purpose for our employees. We need to treat people better.”