American Airlines President Moves to United Continental
August 29 2016 - 5:10PM
Dow Jones News
The president of American Airlines Group Inc. left the company
Monday but immediately moved into the same role at rival United
Continental Holdings Inc., in one of the most unusual management
shake-ups seen in the competitive U.S. airline industry.
The departure of Scott Kirby breaks up a management team at the
nation's largest airline by traffic that dates back more than two
decades and orchestrated two mergers. But his move could give
United the kind of broad industry experience some critics of the
third-largest U.S. airline contend it is lacking.
United is in the midst of strengthening its management bench
under Chief Executive Oscar Munoz, a newcomer to the industry who
is under growing pressure to address lagging financial and
operational performance. Mr. Munoz, who is both chief executive and
president, would cede the latter role to Mr. Kirby.
United said Monday that Mr. Kirby's appointment is effectively
immediately. The 49-year-old United newcomer will report directly
to Mr. Munoz and have responsibility for operations, marketing,
sales, revenue management, alliances and network planning, the
company said.
American separately said Monday that it named Robert Isom, its
chief operating officer, to the post of president, following Mr.
Kirby's departure. Mr. Isom, 52 years old, will continue to oversee
the airline's operations and assume all revenue responsibilities,
the company said. American expressed its gratitude to Mr.
Kirby.
American said Monday that its board's succession planning and
subsequent conversations about the career expectations and
marketability of its executives led the company to conclude it
wouldn't retain its existing management team in their current roles
for an extended period. As a result, the board chose to "act
proactively" to establish a team and structure for the long
term.
Like other top executives of American, Mr. Kirby, 49 years old,
doesn't have an employment contract or a noncompete agreement, and
he is free to make the lateral move to United. But American said it
would pay him a severance because he wasn't let go for cause, these
people said. Mr. Kirby's base salary in 2015 at American was
$660,000, and his total compensation was $8.3 million.
Mr. Kirby said Monday that he was honored to join United and
"have the opportunity to accelerate the momentum the airline has
achieved over the past year." The executive said he sees "real
opportunity to build on the airline's vast global network."
At United, Mr. Munoz, 57, has been making changes since
returning to work in March after recovering from a heart attack and
later a heart-transplant surgery. He quickly found himself in a
proxy contest that was resolved by a big overhaul of the airline's
board, including adding more directors with airline experience and
installing an industry veteran as nonexecutive chairman.
Mr. Kirby's turnaround credentials—and his sudden
availability—should take some of the burden off Mr. Munoz and
provide the company . But the new post isn't a predetermined path
toward the top job at United for Mr. Kirby,.
Earlier this month, the Chicago-based company hired a new chief
financial officer and tapped a new chief commercial officer.
Write to Susan Carey at susan.carey@wsj.com
(END) Dow Jones Newswires
August 29, 2016 16:55 ET (20:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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