United CEO Oscar Munoz Is Out (and Scott Kirby Is In)
Taylor Rains December 05, 2019
Big changes are coming to United Airlines as CEO Oscar Munoz plans to step down from his position in May 2020. Scott Kirby, the airline’s president, will take Munoz’s place after the company’s annual meeting, and Munoz will replace Jane Garvey as executive chairman. Garvey will retire in May and has sat on the board for two years.
Munoz’s Tenure
Oscar Munoz became CEO after Jeff Smisek’s resignation in 2015. Smisek’s departure is thought to be a result of corruption between him and the Port Authority of New York and New Jersey’s chairman, David Samson. United was accused of operating a money-losing route between Newark and the city nearest the chairman’s vacation home in exchange for upgrades and improvements United wanted at Newark airport.
Munoz had a rough start as CEO, suffering from a heart attack within a month after taking the position. He received a heart transplant in January 2016 but was back to work shortly after. In 2017, he faced another hurdle when a passenger was dragged off an overbooked flight. Munoz’s comments about the event were less than caring, causing backlash and criticism about how he was handling the situation. This prompted a needed “culture shift” throughout the airline and Munoz vowed to make changes to company policy, training, and the use of law enforcement on aircraft.
Although Munoz’s tenure started off a little rocky, he and Kirby were able to promote growth and profit beginning in early 2018. Profit increased from 2.1 billion in 2017 to 2.5 billion in 2018, and the airline has already earned 2.3 billion in 2019.
In his announcement, Munoz stated, “When I joined United as CEO, I laid out ambitious goals to build a new spirit of United by regaining the trust of our employees and customers — and I’m proud of how far we’ve come. 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.” Garvey admired Munoz’s dedication to change, stating, “his focus on putting customers and employees first has transformed United’s culture today and successfully positioned the company for tomorrow.”
United stock increased 1% after the announcement and is up 54% since Munoz’s start.
Kirby as CEO
Scott Kirby will replace Munoz as CEO. Many suspected that he might replace Doug Parker at American Airlines, but this announcement put that rumor to rest. Kirby is one of the best in the industry for improving growth and making routes profitable, and his efforts since joining United has helped expand the airline’s network and capacity. He is expected to continue his strategy of boosting traffic though United hubs, such as Chicago and Denver, to increase profit margins and improve efficiency. Kirby said in a statement, “I love the fact that almost every time I get feedback from employees, 99.9% of the time it is something about how do we make this airline better for our customers. That is an incredible amount of energy, innovations and creativity, and that’s the foundation that a great airline is built on.”
Do you think this is going to be good or bad for United? Let us know in the forums!
It looks unanimous, FT customers don’t feel Kirby is customer focused. Airlines are primarily a consumer business so if one of your key stakeholders isn’t pleased it will be interesting to see how this develops. From my perspective, I had high hopes for Oscar when he jumped into the CEO role. I can’t say he’s lived up to my expectations, not a disaster, as he got lucky with the Trump economy, but the United product hasn’t improved.
Well, 99% of the employees may want to make the airline better, so who is blocking them doing that? The executives in these airlines don't even know that they have customers. Their free ticket for abuse and mistreatment is the raw monopoly power granted to them by the US Government. Will Kirby be different than Munoz? The audience of this blog knows the answer to that question.
One thing not mentioned in the article is that this has been planned for some time (Oscar replacing Jane); only the timing was up in the air. I'm definitely not happy about Scott Kirby stepping up, but that was to be expected. Let's just hope the board keeps him under control and it doesn't hurt the airline too badly!
He defended the handling of the Dr. Dao incident which a senior paid passenger was forcibly injured dragged from his paid seat. He said it was the fault of the passenger and his staff handled the accident correctly. Later changed his tune after his heartless statement went viral. Let my open the door for ya and good riddance!
Now it is Douglas Parker's turn to go!!!!