United an­nounces Kirby to take over for CEO Munoz

Orlando Sentinel - - BUSINESS - By David Koenig and Michelle Chap­man

Three years af­ter be­ing dumped by a ri­val, Scott Kirby will be­come the next CEO of United Air­lines, where he has played a key role in lead­ing a turn­around of the once-mori­bund car­rier.

United an­nounced Thurs­day that CEO Os­car Munoz will step down in May and be suc­ceeded by Kirby, cur­rently the air­line’s pres­i­dent.

Munoz has led the air­line since 2015 dur­ing a tu­mul­tuous time that in­cluded the bru­tal drag­ging of a pas­sen­ger off an over­crowded plane and an ag­gres­sive growth plan de­signed to re­cap­ture United’s glory days.

Munoz re­cruited Kirby days af­ter he was ousted as the No. 2 of­fi­cial at Amer­i­can Air­lines, where he was widely con­sid­ered a fu­ture CEO.

Kirby has fig­ured promi­nently in de­ci­sions in­clud­ing a re­fresh of United’s fleet and a bold plan — ini­tially re­sisted by Wall Street — to ag­gres­sively add new routes from its hub air­ports such as Chicago and San Fran­cisco.

“When he ar­rived, United was a hot mess,” said travel an­a­lyst Henry Harteveldt. “Scott has fo­cused on im­prov­ing United re­li­a­bil­ity and pro­duc­tiv­ity, and it’s a much more re­li­able air­line than it used to be.”

Kirby, 52, will lead one of the world’s big­gest air­lines just as in­vestors won­der whether the his­tor­i­cally volatile in­dus­try can con­tinue to post strong prof­its.

United faces nar­rower chal­lenges in­clud­ing a num­ber of union la­bor con­tracts com­ing up for ne­go­ti­a­tion and the on­go­ing ground­ing of its Boe­ing 737 Max jets, which has caused the air­line to can­cel thou­sands of flights since March.

Kirby left Amer­i­can Air­lines in mid-2016 in what the com­pany de­scribed as part of its long-term suc­ces­sion plan­ning. In ef­fect, Kirby was passed over as heir ap­par­ent to CEO Doug Parker in fa­vor of Robert Isom, then Amer­i­can’s chief op­er­at­ing of­fi­cer.

In­sid­ers at Amer­i­can never doubted Kirby’s in­dus­try knowl­edge and in­tel­li­gence — he claims to have been kicked out of casi­nos 150 times for count­ing the cards played in black­jack games — but they say his per­son­al­ity could be abra­sive at times.

Kirby wasn’t un­em­ployed for long. Munoz, a long­time rail­road ex­ec­u­tive with lit­tle ex­pe­ri­ence in the air­line busi­ness, said at the time that hir­ing Kirby com­pleted his se­nior lead­er­ship team.

In a state­ment is­sued by United on Thurs­day, Munoz said, “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.”

The choice of Kirby was not a sur­prise. Wolfe Re­search an­a­lyst Hunter Keay said Kirby’s growth­first strat­egy and fo­cus on op­er­a­tions and costs won’t change how in­vestors view United, al­though his ag­gres­sive­ness could mean more bor­row­ing.

As for his per­son­al­ity, Keay said, “Kirby has adopted a more diplo­matic tone in pub­lic fo­rums over the last two to three years af­ter a hum­bling and un­ex­pected exit” from Amer­i­can.

Munoz will serve as ex­ec­u­tive chair­man for a year af­ter step­ping down as CEO. United’s cur­rent chair­man, Jane Garvey, will re­tire from the board in May.

Munoz, 60, was on the board at United when he was named CEO in 2015 af­ter Jef­frey Smisek was ousted. Smisek was embroiled in a fed­eral in­ves­ti­ga­tion into whether United im­prop­erly cur­ried fa­vor with the head of the re­gional agency that op­er­ates air­ports in the New York City area, in­clud­ing United’s hub in Ne­wark, New Jer­sey.

A month af­ter tak­ing the job, Munoz suf­fered a heart at­tack and later un­der­went a heart trans­plant.

United at the time lagged its clos­est com­peti­tors, Amer­i­can and Delta, by many fi­nan­cial and op­er­a­tional mea­sures. It has since re­duced de­lays and can­cel­la­tions and boosted mar­gins.

Since early last year, United has grown ag­gres­sively by flights be­tween hub air­ports and smaller cities.

Scott Kirby has played a key role in lead­ing a turn­around of United Air­lines.

United CEO Os­car Munoz, who has led since 2015, is step­ping down in May.

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