United announces Kirby to take over for CEO Munoz
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.