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United Continental Hires Scott Kirby as President, Stock Up

Zacks Equity Research
Updated

Chicago-based United Continental Holdings UAL has been making quite a few changes to its management team of late as it strives to improve its operational performance under Oscar Munoz. Munoz himself has been serving as the Chief Executive Officer (CEO) of United Continental for less than a year.

United Continental in its latest bid to rearrange its management team has appointed Scott Kirby as the president, a newly created position at the carrier. Kirby has vast experience in the airline space and his appointment is a prudent move by United Continental as it seeks to turn around its fortunes. At United Continental, Kirby will assume a wide array of responsibilities ranging from overseeing its activities pertaining to marketing, sales, alliances, and network planning along with revenue management. Shares of United Continental gained value following the news of this key appointment.

UNITED CONT HLD Price

 

UNITED CONT HLD Price | UNITED CONT HLD Quote

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Kirby’s Vast Airline Experience

Kirby moved to United Continental from another powerhouse in the airlines space, Fort Worth, TX – based American Airlines Group AAL where he served as the president. Kirby has over 20 years of experience in the airline space, having joined the erstwhile America West Airlines in 1995. Kirby was a key member of the executive team that oversaw the merger of America West and US Airways in 2005. Kirby became US Airways’ President in 2006. American Airlines Group in the current form was created in 2013 following the merger of US Airways and American Airlines. Kirby had served as American Airlines Group’s president, occupying the second-most important position behind CEO Doug Parker, since 2013.

Kirby has been replaced as president by Robert Isom at American Airlines. Isom, prior to his elevation, served as American Airlines’ Chief Operating Officer. Isom, who like Kirby is incredibly experienced in the airline space, will continue to oversee the carrier’s operations apart from assuming all revenue responsibilities at American Airlines.

United’s New Hires Aimed to Counter Criticism? 

Kirby’s appointment comes within a few days of key managerial changes at United Continental. Earlier in the month, the carrier appointed Andrew Levy as Executive Vice President and Chief Financial Officer. The highly experienced Levy has joined United Continental from Allegiant Travel Company ALGT. Additionally, United Continental appointed Julia Haywood as its executive vice president and chief commercial officer.

United Continental’s endeavors to appoint people with significant experience in the airline space appear to be in response to the revolt it faced earlier in the year from some of its shareholders. Hedge funds PAR Capital Management, Inc. and Altimeter Capital Management, L.P, with over 7% collective stake in the company, were apparently dissatisfied with the company’s performance as management apparently lacked enough understanding of the airline business. In fact, Munoz himself had served railroad operator CSX Corporation CSX before being chosen to replace Jeff Smisek as United Continental’s CEO in Sep 2015.

Investor focus will remain on whether United Continental manages to revive its sagging fortunes through the above appointments.

United Continental like American Airlines currently has a Zacks Rank #3 (Hold).

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