Management changes at the top of major airlines are relatively rare and nearly always engender plenty of speculation as to the reasons for such moves. Seeing a C-suite executive move from one airline to another on the same day is virtually unheard of, but that’s what happened today as Scott Kirby, a 20+ year veteran of American Airlines (from America West and then US Airways, always at Doug Parker’s side) announced that he was resigning as President effective immediately and moving into that same role at United Airlines. The position of President at United is a new one, created specifically to bring Kirby in to the company. In that role he will assume responsibility for United’s operations, marketing, sales, alliances, network planning and revenue management; he reports to CEO Oscar Munoz.
Both airlines released statements on the move (AA’s; UA’s) and reading between the lines suggests that Kirby made the move because he was not going to get to be CEO at American any time soon while United was willing to set the wheels in motion on that front. Here’s the salient excerpt from AA:
Today’s management changes are the result of the Company’s Board of Directors’ ongoing succession planning process. As part of that process, and subsequent conversations regarding career expectations and the marketability of its executives, the Company concluded it would not be able to retain its existing executive team in their current roles for an extended period. As a result, the Board chose to act proactively to establish a team and structure that will best serve American for the longer-term future.
As for what this means in terms of changes to the way things operate at either airline, I’ll bet that very, very little shifts because of this move. Kirby is replaced by Robert Isom, also a longtime Parker partner and industry veteran. The company’s focus and plan to execute on that remain intact. At United there is a greater potential for adjustments along the way, particularly as this add is on top of two other recent executive changes Munoz effected. But, again, the basics of where the company is going and what it will be doing in the next few years are also well established. We know that First Class is dying, that the new Business Class is coming and that Basic Economy fares are on the horizon, too.
Kirby will have an opportunity to prove himself in getting the back-office operations back on track and shepherding some of the above projects to completion. And maybe even fixing some of the IT issues that continue to plague the company. And if he can do that for a few years odds are he’ll be the next CEO once Oscar is ready to be done.
My first thought about Kirby jumping AA->UA: Was there really no non-compete? Or who paid what to buy it out?? #AvGeek
— Seth Miller (@WandrMe) August 29, 2016
And then there’s the part that has me personally curious: What did it take to buy out the non-compete? Obviously they worked out a deal of some sort, but I’m curious what was involved there.
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On your last question, the Form 8-K with the termination agreement is due to be filed w/the SEC w/in 4 business days.
Great, so now he can destroy what’s left of UA’s FF program, too.
what exactly is it about mileage plus that is superior to aadvantage? just curious, seeing how UA went revenue based long before AA. At least partner flights on AA count towards elite qualifying dollars. Only UA metal counts on UA.
UA at least has tons of availability. AA availability is awful.
I’ll second that! Out of my airport, I sometimes see months at a time with very little availability to an American hub, while United, if not wide open, at least has quite a few options each month. It’s to the point where booking AAdvantage basically means a positioning flight or a five-hour drive for me.
It may be dependent on what routes you want, but I find myself spending Mileage Plus miles as fast as I can accumulate them, while AAdvantage miles build up a balance that I tap into now and then.
The AA mgmt team has no employment contracts and no noncompetes. Only a provision for settlement if there’s a change in control of the company
I read the same thing – which seems bizarre to me, but I can’t say I know what’s “normal” in the pax airline industry these days.
The main problem with UA’s FF program is that you probably have to fly UA.
(Yeah, I know you can use partners, but that’s besides the points.)
Non-competes are not enforceable if you terminate the employee, so it’s looking more like AA’s press release is accurate.
Who needs a non-compete when United is just copying Delta, and American is just copying the two of them? That’s my attempt at tongue in cheek… but, it is a very interesting development.
Sounds kind of like one of those baseball deals where one team trades away for little or nothing a player with a high salary who no longer fits in their plans, just to get him off the payroll.
Will united take Pablo then?
Just to let you know that you’ve been featured in a Portuguese newspaper 😀
https://www.publico.pt/mundo/noticia/ja-se-voa-entre-os-eua-e-cuba-1742815