WSJ: “American Airlines President Moves to United Continental”

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Scott Kirby, former American Airlines president, who was told to “transition out” according to the WSJ, moved into a similar position at United Continental (why don’t they just drop that Continental part) on Monday, the same day he left AA.

WSJ American Airlines President Moves to United Continental

These lateral moves are quite rare (cannot remember one) among the US airlines now that the number of network carriers is down to just four (American, United, Delta and Southwest).

Here’s an excerpt from WSJ (access the piece here):

The president of American Airlines Group Inc., who was let go on Monday with more than $13 million in severance pay, is immediately taking up the same senior role at rival United Continental Holdings Inc., in one of the most unusual management moves in the industry’s history.

Scott Kirby was told that he needed to “transition out” of the Fort Worth, Texas, company, said people familiar with the matter, after the airline’s board decided it wouldn’t be able to retain its executive team in their current roles for the long term.

Like other top executives of American, Mr. Kirby doesn’t have an employment contract or a noncompete agreement, and he was free to make the lateral move to United.

American wasn’t obligated to give Mr. Kirby a severance package, yet it paid him in cash and stock, according to a regulatory filing. It’s highly unusual for an executive to receive such a package when leaving to join a rival.

Conclusion

Kirby was unlikely to make it to CEO at American Airlinesbut he may have a shot at the position at United Continental at some point.

It is interesting that American Airlines doesn’t have a non-compete agreement for its management team and gave the guy a nice bonus of $13 million to get him out of the door and join their rival.

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