United's Kirby gets turn as an airline ceo after years as No. 2
United Airlines Chief Executive Officer Oscar Munoz will hand the reins to President Scott Kirby next year, capping a turnaround effort at a carrier that had become an industry laggard after a rocky merger and a pair of embarrassing scandals.
Kirby, 52, will take over as CEO at United Airlines Holdings Inc. in May, less than four years after joining the company following a long tenure as the No. 2 executive at American Airlines Group Inc. and US Airways. Munoz, 60, who overcame a severe heart attack shortly after becoming CEO in 2015 and went on to have a heart transplant, will become executive chairman.
"Mr. Kirby was being groomed for a CEO role, both at UAL, and at AAL previously, so, prior to today, the only real question had been, 'When?'" Vertical Research analyst Darryl Genovesi wrote in a note to clients.
Kirby's promotion will provide management stability at United after he and Munoz worked to fix an airline that had floundered for years following its 2010 merger with Continental Airlines. The two executives unveiled an ambitious expansion plan last year that initially spooked investors before winning over skeptics as results improved and the carrier boosted its profit forecast.
United was little changed at $88.28 at 10:33 a.m. in New York. The shares had climbed 53% during Munoz's tenure through Wednesday, the biggest gain on a Standard & Poor's index of major U.S. carriers.
"With United in a stronger position than ever, now is the right time to begin the process of passing the baton to a new leader," Munoz said in a statement. Current Chairman Jane Garvey will retire in May.
Munoz became CEO of United in September 2015 after a dozen years at CSX Corp., where he had risen to president and was considered a contender to become CEO of the railroad.
When he joined United, his predecessor had just been ousted amid an internal probe of how the airline handled a case involving ties to the former chairman of the Port Authority of New York and New Jersey.
Dragging Fiasco
Under Munoz, the Chicago-based carrier came under additional scrutiny in April 2017 when a Kentucky doctor was dragged from a regional jet -- an episode that seemed to illustrate United's approach to customer relations for many travelers. Munoz was stripped of the chairman's job after the incident.
The dragging fiasco occurred even as employees had warmed to Munoz's changes, which included new contracts with most major work groups and robust investment on upgrades for airport facilities, employees' smartphones and other technology to increase efficiency.
"Oscar Munoz fought against all odds to rescue @united from being torn apart & return it to premier status in the industry," Sara Nelson, the leader of United's flight attendants, said in a tweet. She also praised Kirby as the "best network man in aviation."
Kirby, who joined United in August 2016 from American, has sought to overhaul the carrier's network, operations and revenue management. He has emphasized the need to reclaim what he calls "natural share" at United's three mid-continent hubs in Chicago, Denver and Houston.
Casino Ban
Earlier in his career, Kirby was a close business partner of American Chief Executive Officer Doug Parker for more than two decades. The two worked closely together America West when the carrier merged with US Airways in 2005. Kirby built support among creditors and labor unions for US Airways' plan to acquire American out of bankruptcy.
Kirby's surprise departure from American came after a review of succession planning. Robert Isom was promoted to president to replace Kirby.
At America West, US Airways and American, Kirby was known for taking part in elaborate Halloween festivities, joining other executives in donning costumes -- several times as a woman -- and lip-syncing to rock songs. He also has acknowledged being banned from casinos in Las Vegas and elsewhere for counting cards when he was younger.
Kirby graduated from the U.S. Air Force Academy and later worked at the Pentagon and American's travel-reservation system unit.