Americans loss, United's gain

[swamt]

United is gaining a great asset. Smart move by United to bring him on as United needed someone like Kirby to clean some things up.
 
 


After 20 Years Beside American Airlines' CEO, Scott Kirby Moves to United

 

[Dog Wonder]

Ironic it follows the drunken pilots episode.

 

[swamt]

Indeed. But United has been talking with Kirby for some time now and even AA was aware of it before the pilot's drunk fest announced, but yes it is ironic...

 

[eolesen]

I find it a little curious that AA either had their President not covered by a non-compete, or that they willingly chose to waive it.

What's funny is that this isn't the first time they had an executive leave for the same job at another carrier, just to have it come out they weren't subject to a non-compete.

 

[swamt]

You do bring a validated point. As AA has admitted that they were aware and have been dealing with this for some time. maybe during the mergers this contract issue slipped by, just a thought.

 

[FWAAA]

You do bring a validated point. As AA has admitted that they were aware and have been dealing with this for some time. maybe during the mergers this contract issue slipped by, just a thought.

Uh, no. Kirby's status as an employee at will (no employment contract, no severance and no non-compete) was not something that slipped thru the cracks.

The Proxy Statement made it clear that Kirby was entitled to severance only if he was terminated due to a change of control (a corporate takeover by someone else). Kirby's compensation is described on pages 85-86 (pages 92-93 of the .pdf):

http://services.corporate-ir.net/SEC/Document.Service?id=P3VybD1hSFIwY0RvdkwyRndhUzUwWlc1cmQybDZZWEprTG1OdmJTOWtiM2R1Ykc5aFpDNXdhSEEvWVdOMGFXOXVQVkJFUmlacGNHRm5aVDB4TURnNU9UVTFNQ1p6ZFdKemFXUTlOVGM9JnR5cGU9MiZmbj1BbWVyaWNhbkFpcmxpbmVzR3JvdXBJbmNfREVGMTRBXzIwMTYwNDI5LnBkZg==

Earlier this year, when Parker gave up his employment contract and became an employee at will, it was clear that he was the only executive with an employment contract:

“It didn’t seem right to me that I should be the only person at American with an employment contract,” Parker wrote. The employment agreement provided protection “against a number of things I don’t think I should be protected against,” including being fired or repercussions from unhappy shareholders gaining control of the board.

http://www.bloomberg.com/news/articles/2016-04-29/american-airlines-ceo-parker-shifts-to-at-will-employment

"This was done at my request, because it didn't seem right to me that I should be the only person at American with an employment contract," Parker said in a letter to employees.

"The contract protected me against a number of things that I don't think I should be protected against – such as if I get fired or if unhappy shareholders gain control of the American board," he added.

http://www.reuters.com/article/us-american-airline-ceo-idUSKCN0XQ1PC

This was no oversight - the absence of a non-compete was intentional. As President of AA, Kirby has been in charge of operations, and AA's operational results have been pathetic. Numerous long delays and cancellations, especially at LAX, have plagued AA this year.

This isn't a "loss" for AA; it's the trimming of someone who hasn't delivered good results since the merger.

 

[eolesen]

I'm not so sure I'd agree that it's a trimming of someone who hasn't delivered. Executives don't directly drive operational performance -- middle managers and front-line employees do, and the merger hasn't exactly been rainbow farting unicorns, particularly for the LAA folks who've been passed over repeatedly by LUS people for promotions and laterals.

I'd argue AA's operations are simply reflecting some of that "how many days until I can retire?" mindset that's set in with the LAA middle managers.

 

[eolesen]

Also... thanks for clarifying the proxy statement... I wasn't sure if they really did drop the employment agreements or not as of 12/31, but that's apparently what happened.

UA has been looking to buy talent since Smisek was ousted. Within the last 20 months or so, there have been four C-level execs brought in from outsite UA (arguably, five if you include Oscar, but he was on the board before).

Per friends in the IT group, it looks like the CIO that came in at the start of 2015 has replaced all but one of the VP's plus a good number of MD's. All but one of the VP's came from outside.

It's going to be interesting to see what other changes come with Compton retiring, and who (if anyone) that Kirby, Levy, and Haywood recruit into that next layer of VP's and MD's.

 

[jimntx]

I'd argue AA's operations are simply reflecting some of that "how many days until I can retire?" mindset that's set in with the LAA middle managers.

 
No argument to be had...other than the mindset is all the way down to the gate agent/flight attendant level.  I plan to retire at the end of March next year.  When I mention it to gate agent and flight attendant friends, the response quite often is something like "I've got 3 years, 2 months, 17 days to go myself."
 
You are also right about some real mid-level talent on the AA side of the aisle that has been passed over (at least here at DFW) for people that were tired of living in Charlotte.

 

[dash8roa]

 
United is gaining a great asset. Smart move by United to bring him on as United needed someone like Kirby to clean some things up.
 
 
After 20 Years Beside American Airlines' CEO, Scott Kirby Moves to United
 

I would hold the applause until the results are in. I was never impressed with Airways management. A poor product for the customer and very low employee morale.

 

[swamt]

Just wait then.

 

[Hackman]

I would hold the applause until the results are in. I was never impressed with Airways management. A poor product for the customer and very low employee morale.

Agree here. I wouldn't expect much from Kirbmeister. There are reasons why Delta and UAL rejected America Worst/UScareways failed management. Bankruptcy business plan, non existant employee moral, lack of investment in the business. Good luck UAL, look at AA'S dismal performance for clues.

 

[UPNAWAY]

Has Kirby made any big changes in his fiorst month?

 

[topDawg]

Agree here. I wouldn't expect much from Kirbmeister. There are reasons why Delta and UAL rejected America Worst/UScareways failed management. Bankruptcy business plan, non existant employee moral, lack of investment in the business. Good luck UAL, look at AA'S dismal performance for clues.

 
pretty much. 
 
Kirby/Parker remind me a lot of guys like Leo Mullen, Wolf, and all the other pound scum CEOs and presidents of the 1990s. They can run an airline when times are great......but they set it up to fail when the economy hits the down cycle. 

 

[eolesen]

Has Kirby made any big changes in his fiorst month?

Possibly. PlaneBusiness reported that at least two VP's are "pursuing other interests" within the last couple weeks. One from Marketing and one from Network/Revenue Management.