Skift Take

Plenty of eyebrows were raised when Scott Kirby swapped American for United in 2016, but it was clear he was looking to run an airline. His trajectory to CEO was long anticipated.

United Airlines is reshuffling its executive team with Scott Kirby being promoted to CEO in a long-expected move, and Oscar Munoz shifting to executive chairman of the airline group’s board.

The change will take place in May 2020 when United’s current chairman, Jane Garvey, will retire from the board.

Munoz will serve as executive chairman for a one-year term.

Kirby joined the company from rival American Airlines in 2016.

Munoz presided over a major turnaround at United. A board member since 2004, Munoz took over as CEO after Jeffrey Smisek was forced out by scandal. He took over an an airline plagued with operational woes and restive labor after a merger with Continental Airlines criticized by Wall Street. A heart attack shortly after he took the job kept Munoz temporarily on the sidelines.

Munoz rebuilt the airline’s executive ranks, most importantly by hiring Kirby, who left his role at American after not being chosen as the eventual heir to CEO Doug Parker. Before long, Munoz was back presenting a new business plan. Wall Street, to put it mildly, reacted harshly. It featured too much risky capacity growth, they argued.

And his tenure was marked by one of the biggest public-relations disasters in the company’s history. In 2017, a passenger was forcibly removed from a United Express flight after refusing to give up his seat on an overbooked flight. The initial response, a leaked internal message in which Munoz defended employees and failed to apologize sufficiently for the incident, sparked rumors that Munoz could lose his job. Munoz, in a media apology tour over the dragging incident, vowed to completely change the way United operates.

Munoz’s turnaround plan worked, reflected in United’s strength today — its strong profit margins, its much-improved labor relations and service reputation, its stronger network, and its impressive cost control.

“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,” Munoz said.

United CEO Oscar Munoz who will become executive chairman. (AP Photo/Richard Drew)

“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.”

Kirby’s tenure as president has been marked with efforts to drive new revenues, and to help reshape the airline’s image. His 2016 recruitment to United was seismic news in the airline industry. Kirby and American CEO Doug Parker had worked together for two decades and led the team at America West that took over US Airways in 2005 and subsequently US Airways’ merger with American in 2012.

Kirby is beloved on Wall Street for what is perceived as his operational genius. Since he joined United, the carrier’s share price has almost doubled.

“I am honored to be named the next CEO of United and to succeed Oscar, whose leadership has been truly transformational for United Airlines,” Kirby said in a statement. “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.”

Underscoring that this was not much of a surprise move, United’s shares were up just 1 percent in pre-market trading.

See Scott Kirby’s interview here from Skift Forum Asia in May.

Skift Airline Weekly Senior Analyst Jay Shabat contributed to this story.


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Tags: united airlines, united states, usa

Photo credit: Scott Kirby speaking at Skift Forum Asia. Skift

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