LONDON – In what has been an expected move to take place by Wall Street, United Airlines’ CEO Oscar Munoz has taken the decision to step down from the airline.
Munoz’s resignation will officially take place in Spring 2020, in which the President of the airline, Scott Kirby, will change roles.
He will however not be leaving United completely as he will be succeeding Jane Garvey as the Executive Chairman of the company.
Amid this news, the premarket share price of the airline rose by one per cent.
In the announcement made today, Munoz was happy with the progress that he has made with the airline since he joined as CEO around four years ago.
“With United in a stronger position than ever, now is the right time to begin the process of turning over the baton to a new leader”.
With the level of speculation about who will get the top job now being dismissed due to Kirby’s appointment, it is not that much of a surprise that he now has this job.
Munoz hired Kirby in 2016 to improve the airline’s performance, in which the success of the airline has been attributed to him, especially in the last two years.
This improvement of performance is set to be the mantra for Kirby’s leadership, with him wanting to ensure that operational standards of the company are much more stringent and strict, as well as ensuring further profitability as we enter 2020.
Munoz’s Tenure – A Tenure of Tension?
With Munoz now leaving the Chief Executive role, it could have been argued that throughout his leadership, it has been a tenure of tension.
Munoz became the CEO four years ago following the resignation of Jeff Smisek who was being investigated by federal agencies over the airline adding flights into the New York Port Authority jurisdiction and therefore influencing its decisions.
Munoz had a bad spat of health which included a heart attack just one month into the new job, putting him on medical leave, which resulted in heart transplants needed.
Upon his return, things would not have got easier for him at all. As well as trailing the other two carriers of the US3, such as American and Delta, a reputational hit was taken following passenger treatment.
In April 2017, Dr David Dao, a passenger onboard a United flight was pulled down the aisle by security, with the airline being criticised substantially for the handling of the issue, with Munoz not apologising to Dao initially but apologizing for “having to accommodate these customers”.
As a result, Munoz eventually apologised in full to Dao but plans to hire him as chairman fell through because of the handling.
This bad reputation was reinforced rather than fixed when a flight attendant in the carrier had to put a dog in the overhead bin, with the pet dying onboard the flight.
Munoz apologised within hours of the incident and pledged to do better.
It remains clear in this case that as Scott Kirby takes the helm of the airline in the Summer, he will be having to ensure that a high standard of treatment to his consumers is of paramount importance.
To conclude, as United goes into 2020, Munoz has been able to assist Kirby on the PR front, especially with the number of new routes it has on the way as well as the 50 Airbus A321XLR aircraft that it has just ordered to boost its transatlantic takings to more niche markets.
Kirby will be expected to oversee growth in capacity from four per cent to six per cent.
In the meantime, we can only see and watch how Munoz treats his last few months of tenure at United as CEO and whether we could see any last-minute announcements from him along the way…