Scott Kirby made the odd pivot from President of American Airlines to President of United Airlines yesterday. Walking away with a $13MN severance package from AA without a non-compete clause, he has already begun work for United, where he will oversee:
- network planning
- revenue management
We don’t know whether Kirby was terminated by AA or strategically requested the move because he knew long-time co-worker and American CEO Doug Parker was not going anywhere, but certainly he did not just pick up the phone yesterday and tell United CEO Oscar Munoz to clear some space for him — this was a carefully planned move. To wit, United has not had a “President” up to this point and thus this position was specifically created for Kirby and he will report directly to Munoz, whose health still is not back to 100%. It seems that United now has CEO heir-apparent in place.
There is reason to be cautious about his move to United — as a bean counter at America West turned US Airways turned American, he has played a principal role over what many lament as the destruction of a great airline. That’s a loaded charge, but he is at least partially responsible for changing the way we think about loyalty. By that I mean that US Airways under Kirby was a trend-setter in the move to a transnational-based loyalty model in which loyalty on per-trip basis was valued over long-term loyalty. For example, Kirby slashed domestic first class fares that incentivized purchase but hurt upgraders. We see this attitude at the root of the move to award miles based upon ticket price rather than miles flown.
Cranky Flier, who worked with Kirby at America West, sees the move as positive and argues that Kirby will help improve United’s operational reliability. That would be a welcomed change, as United has experienced another summer of cancellations and delays.
Kirby’s own words do not give cause for alarm–
I am honored to be joining United at this important and exciting time and to have the opportunity to help accelerate the momentum the airline has achieved over the past year. I see real opportunity to build on the airline’s vast global network and, along with my 86,000 United teammates, create the world’s best airline for employees, customers, and shareholders.
United has not achieved momentum by cutting its way to growth — it has expanded its international route map, invested in its onboard hard and soft product, and made great progress in securing labor harmony with its employees. If Kirby’s primary goal is to make United the most punctual and dependable legacy carrier, I do believe we will have a winning combination.
The “fool me once…” adage admittedly come to mind here, but I believe we must give Kirby the benefit of the doubt now and watch closely what he does. As a loyal United flyer, I certainly hope he will help rather than hinder the progress we have seen.
And one more note. He leaves American Airlines with lifetime flight benefits for him and his immediate family — positive space (confirmed) in the highest cabin available (as in, “Oh I think we’ll fly to Sydney tonight in first class. I just have to pay taxes on it”). He probably has negotiated the same deal with United. Not bad…