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.
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19 Comments On "With Scott Kirby As United’s New CEO, The Former America West Airlines/USAirways Leadership Now Control 2 Of The Big 3 US Airlines"
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Yeah Dan, Since I’m a Million Miler after this coming year being a 1K , I’ll become a free agent. No more loyalty.
Loyalty has become absurd at this point.
Flying has become a very non consumer friendly industry even though it generates tourism and economic growth all over the world and airlines end up basing their fares over whatever everyone else is doing. Very sad for a hard working, hamster on the wheel type middle class family like mine. I always feel like I’m missing out on seeing G-d’s glorious world and I’m sure I’m not alone…
Airfare adjusted for inflation, airfare has never been cheaper in coach. It’s all about being creative/flexible with dates and destinations, and planning trips around low airfare. I flew round-trip to NYC-AMS last year and NYC-LON this year, both for under $500RT each time, both overlapping a US holiday (Memorial day or labor day). That wasn’t normal 5 years ago, but this summer, there were months with consistent dates with 450-550 RT pricing.
Yes, there’s a race to the bottom regarding on-board comfort in coach, but the prices have come down accordingly.
So has been getting airlines points via credit cards. Only sweet spots are BA/Avianca and a cpl of others.
Question is, is it worth it to even stores miles by Amex or chase if one day all airlines and hotels will be devalued….
That’s the beauty of hybrid points. Take advantage of miles when they offer a compelling value or just use the points for paid travel otherwise.
But if paid travel is the way to go, shouldn’t 2% cash back be worth more? Hybrid is only worth 1.5%, is that accurate?
1. You earn between 1.5 to 5 points per dollar spent. Multiply that by 1.5 cents.
https://www.dansdeals.com/credit-cards/credit-cards-points-start-need-know-best-credit-cards/
2. Because you retain the ability for outsized value with airline miles and hotel points with hybrid points.
I fly Delta almost exclusively now. Operationally the best of the US carriers. When getting from point A to point B safely, and on time, go with DL.
No doubt, they are operationally strong. But they’re also the weakest with miles, though the differences are getting smaller.
Maybe Oscar Munoz can replace Doug Parker at AA and straighten things up over there.
LOL.
I’d love to see Gordon Bethune go back to airline CEO.
https://www.cnbc.com/amp/2019/12/05/oscar-munoz-to-step-down-as-ceo-of-united-airlines-ual.html
Ironic quote at end of article;
“I love the fact that almost every time I get feedback from employees, 99.9% of the time it is something about how do we make this airline better for our customers,” Kirby said in a video e-mailed to employees. “That is an incredible amount of energy, innovations and creativity, and that’s the foundation that a great airline is built on.”
Approx 2.5 billion in PROFIT! They can Afford to spend a little more on loyalty. Not less.
In light of news like this (and the other United devaluations) and considering that AMEX has been running (pretty consistent) bonus transfers to Avianca and Flying Blue, it looks like AMEX is the better currency at the moment for airline program transfers. Chase still wins out for hotels due to the Hyatt transfer option.
They both have pros and cons:
https://www.dansdeals.com/credit-cards/credit-cards-points-start-need-know-best-credit-cards/
Diversification is key.
Crazy idea dan, but maybe you and all the other travel sites come together to make a new competitive airline
I’m waiting for Amazon Airlines or Tesla Airlines.
hi dan Top-tier elites are expected to spend more and more sums of money, but benefits continue to get less and less.
plus points ??
Looks like good news, but there’s a devaluation built right into it.