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American Airlines' President jumps ship to United

Portland, Oregon
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37,406 posts
7 reviews
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American Airlines' President jumps ship to United
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Scott Kirby was until today President (#2 to the CEO) at American. He's now President (#2) at United. It's not often you see such a high ranking executive move from one company straight to another. American has appointed its COO Robert Isom as President.

http://newsroom.united.com/2016-08-29-Scott-Kirby-Named-President-of-United-Airlines

http://hub.aa.com/en/nr/american-airlines-group-names-robert-isom-as-president-8-29-2016

Vancouver, Canada
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for Air Travel
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11,211 posts
101 reviews
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1. Re: American Airlines' President jumps ship to United
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They also hired one of the high priced strategy consultants into a senior position, While Kirby's hiring seems positive, the consultant... well, not so much.

Portland, Oregon
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2. Re: American Airlines' President jumps ship to United
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The appointment of the high priced strategy consultant (Julia Hayward) as CCO got very negative feedback, as she is replacing Jim Compton (thus far Munoz's defacto #2). Kirby's appointment, as her boss, should alleviate that.

Portland, Oregon
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3. Re: American Airlines' President jumps ship to United
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It looks like he was pushed out by American. He got a $13m severance package, and walked straight into the equivalent position at UAL. Apparently he didn't have a non-compete clause.

http://bit.ly/2bEqZNt

Phoenix, Arizona
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4. Re: American Airlines' President jumps ship to United
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Interesting turn of events. Thank you for the update.

Not sure how things will work out with Ms Hayward.

Will be some interesting times, that is for sure. Being that UA is our prime carrier, and we are both heavily invested in UA's MP program, I am starting to cross my fingers. Guess that more changes will soon be in the works?

With GFC yielding to Polaris Class, things ARE changing.

When I read the title, my first thought was that Doug Parker had jumped ship. Not that would have been the ultimate surprise. In many ways, Phoenix still misses Mr. Parker, as he was very active in this community, along with our "local airline." Now, if UA would just expand a bit, in the PHX market...

Appreciated,

Hunt

Vancouver, Canada
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5. Re: American Airlines' President jumps ship to United
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If they pushed him out, the non-compete would likely fail enforcement. Texas is a right-to-work state.

Palmetto, Florida
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5,800 posts
6. Re: American Airlines' President jumps ship to United
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Well well well

Portland, Oregon
Level Contributor
37,406 posts
7 reviews
16 helpful votes
7. Re: American Airlines' President jumps ship to United
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"If they pushed him out, the non-compete would likely fail enforcement. Texas is a right-to-work state."

=========

Waiving a non-compete *and* paying a $13m severance, knowing full well he's going straight to one of their major competitors?

I think it's Doug Parker being very generous to a friend who is genuinely surplus to requirements at AA. Would he have been so generous if Kirby went to Delta?

Edited: 7 years ago
Vancouver, Canada
Destination Expert
for Air Travel
Level Contributor
11,211 posts
101 reviews
142 helpful votes
8. Re: American Airlines' President jumps ship to United
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No. The non-compete would not be there or enforceable if he was let go. You cannot stop people from carrying out their business. (having just let a pile of people go and then turned out the lights before I left, I had to bone up on right-to-work) Only if he left on his own accord would it come into play. You can't quit and then steal competitive advantage. Severance is either part of the contract or a payout for options not exercised that he can't take with him.

Palmetto, Florida
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9. Re: American Airlines' President jumps ship to United
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Not a lawyer but the idea of no compete clause for an airline CEO is rather silly and never enforceable whether you are in Texas or in Illinois. There aren't many airlines out there and they operate in many if not all states. Usually you restrict some one to a certain radius of your business, so would a judge agree to restrict Mr Kirby to all of USA and any countries w AA presence? What would that leave him? Tazamania? Timbuktu ?

Portland, Oregon
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37,406 posts
7 reviews
16 helpful votes
10. Re: American Airlines' President jumps ship to United
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Amatrip,

Scott Kirby wasn't/isn't the CEO of either airline; they're still Doug Parker and Oscar Munoz respectively. He reported to Doug until 4.15pm EDT and from 4.18pm he reports to Oscar.

Regarding the severance, I think I understand it. In the case of forced redundancy (your boss tells you you're being laid off) by law the company is absolutely required to pay the severance. Kirby wasn't invited into a room and told you're laid off; if he were then he'd have been frog marched out of the building immediately. He was told by Parker that you should look for a new job as you're surplus to requirements and we'll be letting you go soon. Legally that's still a notice of redundancy and if AA refused they'd be liable for legal redress. The fact that he found the new job at United and started three minutes after his departure from AA (with $13m in severance) makes him a lucky or more likely smart guy.

Interestingly United has another guy from a similar situation on the Board of Directors (very recently appointed). Jim Whitehurst was COO of pre merger Delta and tipped as post merger CEO. But the BOD gave it to Richard Anderson and he was similarly ushered away (he's now the CEO of Red Hat, the Linux company). Come to think of it, I wonder if Whitehurst had anything to do with sounding out Kirby , or vice versa.

Edited: 7 years ago
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