Scott Kirby and Doug Parker teamed up at America West in the 1990s and reshaped that airline as a low cost carrier. They merged with USAirways and wanted to do the same there, even changing its ticker symbol to LCC.
Their philosophy was to cut passenger benefits as much as possible.
They never did integrate the airlines well, but with American in bankruptcy, they managed to merge with them and gain control of that airline. Relentless cost cutting ensued, some of which I highlighted in 2016. Not only did they massively devalue AAdvantage, they once again failed to integrate the airlines and operational performance plummeted. I’ve written off even trying to fly American as it seems like all of my American flights wind up delayed or cancelled. They messed up multiple trips to London, to my grandfather’s 90th birthday party with delays, and cancellations. At the same time they also stopped rebooking passengers onto other airlines, meaning that a 7 hour flight can turn into a weeklong nightmare.
In the meantime Scott Kirby was second fiddle to Doug Parker at American and wanted to know what the succession plan would be for him to take over.
Instead he was showed the door.
Feeling the slap in the face, Mr. Kirby jumped ship to United and became President of the airline in 2016. Oscar Munoz was a people person and was hired to turn United around in 2015 after a disastrous stint under Jeff Smisek, who had been hired to merge Continental and United and also failed to integrate them. But Mr. Munoz had health issues early on that hampered his ability to complete the turnaround, though he did improve employee morale at United. And he wasn’t an airline industry insider.
While Mr. Munoz is well liked, Mr. Kirby is not a people person. However, Mr. Kirby knows the airline industry well and has added routes and made decisions that have helped United. His knowledge of American’s playbook has also been useful. If United wanted to retain him and not have him jump back to take over American, they had to give him leadership of the airline.
And sure enough, effective in May, Scott Kirby will be United’s CEO.
This is not the leadership that consumers want. Truthfully though, it was clear when Kirby was hired that things were going to change. And not for the better. He has been behind most of the devaluations since he arrived.
United has made so many negative changes and cuts to their program that it’s dizzying.
Just this year alone they announced that:
- They would kill award charts, allowing them to charge whatever they want for award tickets.
- They would eliminate close-in fees, which I predicted would be devastating news.
- They killed off benefits on their premier credit card.
- They showed how they don’t understand how to make money off their credit cards.
- They made obtaining elite status significantly more expensive and difficult.
- They refused to honor a lifetime contract with club members.
- They sneakily added mileage surcharges after eliminating close-in fees on award tickets.
- Top-tier elites are expected to spend more and more sums of money, but benefits continue to get less and less.
Airline merger after airline merger have taken the life out of the competition and the race to the bottom just keeps getting quicker. The pace of change for the worse has been astounding, but that’s what happens than there’s an oligopoly.
I’d expect things to continue to get worse with Mr. Kirby as CEO. But with his ex-partner running American and Delta not even trying to have a competitive loyalty program there’s nowhere left to run or hide. Except opting to be a free agent and ditching loyalty until airlines realize that loyalty is a 2 way street.