United Airlines’ CEO to step down
Munoz, who will become executive chairman, is paving the way for the company’s president
United Airlines CEO Oscar Munoz will transition to executive chairman in May 2020, paving the way for Scott Kirby, the airline’s president, to take over as chief executive.
Munoz, 60, who is to serve a one-year term as executive chairman, was named chief executive of United in September 2015. He took the reins during a particularly turbulent time as the airline was still struggling to integrate employees and systems following its 2010 merger with Houston-based Continental Airlines.
Just one month into his new role, Munoz took out full-page advertisements in newspapers including the Houston Chronicle to apologize for the rocky union.
“Simply put, we haven’t lived up to your expectations or to the promise and potential of that day,” Munoz said in that full-page ad.
His early focus included ratifying new labor agreements, and by the end of 2016 all United work groups had labor contracts in place for the first time in nearly 10 years. (United’s catering workers have since unionized and are currently in negotiations with the carrier.)
Sara Nelson, president of the Association of Flight AttendantsCWA, noted Munoz’s work with employees in a tweet on Thursday.
“Oscar Munoz fought against all odds to rescue @united from being torn apart & return it to premier status in the industry,” she said. “@afacwa fought to make sure he could do his job & he did ... TY Oscar & congrats to the best network man in aviation, Scott Kirby.”
Munoz recruited Kirby from American Airlines in August 2016.
“One of my goals as CEO was to put in place a successful leadership transition for United Airlines,” the outgoing chief executive said in a press release. “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.”
Munoz’s time as CEO was not without its missteps however. The forcible removal of Dr. David Dao from a United Express flight in April 2017 prompted a social media uproar and caused United to revamp its policies.
“Our review shows that many things went wrong that day, but the headline is clear: Our policies got in the way of our values, and procedures interfered in doing what’s right,” Munoz said in a statement shortly after that incident. “This is a turning point for all of us at United, and it signals a culture shift toward becoming a better, more customer-focused airline.”
United under Munoz’s leadership, before and after that incident, worked to introduce new features for customers, including free snacks on all flights and free DirecTV for travelers on its Boeing 737 planes that have television screens in the back of the seats. It also continued expanding its route network.
Over the past four years at Bush Intercontinental Airport, the airline opened the new Terminal C North and an airport lounge for Polaris first- or business-class international travelers. It’s currently investing $326 million on a new baggage system.
“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,” Munoz said in Thursday’s news release. “Along with the successful implementation of the plan our team laid out in January 2018, United’s operational and financial performance isn’t just better — it’s better than ever. By instilling a culture of ‘proof not promise,’ we have transformed United even faster than we expected and there’s an incredible sense of excitement about the future.”
United reported third quarter net income of $1 billion, up 23 percent from $833 million for the same three-month period last year.
Munoz earned nearly $10.5 million last year in salary and other compensation. He is eligible for a cash severance payment of $7.5 million as well as other awards under his employment contract, according to documents filed with the Securities and Exchange Commission, upon his resignation.
According to United’s latest proxy statement, Munoz held just shy of 212,000 shares of common stock in the company.
As part of the transition, Jane Garvey, United’s current chairwoman, will retire from the board after more than a decade of service. She has been the chairwoman since May 2018.
United shares closed Thursday at $87.86, down less than a point.