Last updated: 02:30 PM ET, Tue August 30 2016

United Airlines' New President: Why Did Kirby Jump Ship?

Airlines & Airports | United Airlines | Josh Lew | August 30, 2016

United Airlines' New President: Why Did Kirby Jump Ship?

Scott Kirby will be switching teams.

The now-former president of American Airlines has accepted a job as president at United Airlines, making him second in command to CEO Oscar Munoz. Kirby will not be replacing anyone at United, as Munoz was officially “President and CEO."

To people who follow the industry, this move is perhaps a bit of a surprise. Yes, American and United are rivals that are vying for the upper hand as they chase Delta, which is currently the most successful of the three legacy carriers. Also, Kirby’s history with current AA CEO Doug Parker goes back a long way. The two have been working together for more than two decades. They have climbed through the ranks together, running America West before its merger with US Airways. Kirby has been Parker’s number two at American since the 2013 merger with US Airways. 

Kirby is being replaced by current AA COO Robert Isom, who also followed the America West, US Airways, American career progression. 

American’s board of directors said that the move was part of the long-term succession plan. That makes it sound like Kirby was not expected to eventually replace Parker. Perhaps executives further down the ranks are being groomed for higher positions in the future and Kirby had to be removed so that there was a clearer path for promotions going forward. 

Or perhaps Kirby, 49, saw an opportunity to finally get out from the shadow of Parker, who is 55 and appears to be in for the long haul as AA’s CEO. 

Read More: American Airlines CEO Terminates His Own Contract

Officially, the move is being called a “transition and separation agreement.” Kirby's severance package includes $3.8 million in cash and more than $9 million in AA stock. According to CNN, Kirby did not have an employment contract with American. This means that he has been, more or less, free to negotiate with United. 

Some industry-watchers think that Kirby will be groomed to eventually take over for Oscar Munoz at United. Munoz has apparently wanted to get Kirby on board. In a statement announcing the hire, the United CEO said that “Scott's appointment, along with other recent leadership announcements, is the culmination of the formation of my senior leadership team.”   

Munoz followed up that statement by telling employees that Kirby’s appointment "will allow me to sharpen my own focus as CEO on the core mission of driving United's overall strategy, business innovation and financial performance."  

Did Kirby place his bet on the winning horse? Judging by recent performance, it would seem so. On both the recent Airline Quality Ratings report and the Skytrax 2016 ratings, United has jumped ahead of American. Despite problems combining operations with Continental after its 2010 merger, United is further along in the process than American, which merged with US Airways in 2013. 

Given his eight-figure severance package and the inside track to CEO, it would appear that Kirby has come out ahead in the deal. 

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