The abrupt departure last week of United Airlines CEO Jeff
Smisek amid a corruption probe and the naming of former CSX Corp. President and
COO Oscar Munoz to replace him could bode well for the airline, some observers
of the carrier said.
“The appointment of Mr. Munoz may be a blessing in disguise,
in our view,” wrote CRT Capital analyst Michael Derchin in a investors’ note
dated Sept. 8, the day Smisek stepped down. “At CSX, Mr. Munoz helped transform
the railroad into an industry leader in customer focus, reliability and
financial performance. These are major priorities for [United], in our opinion,
and Mr. Munoz could be the right man at the right time to take the helm at an
airline that could improve in these areas.”
Smisek leaves an airline that is still struggling with its
reliability performance. Five years after its merger with Continental, United
lags well behind Delta, a chief competitor, in on-time and cancellation rates.
The airline must also conclude contractual negotiations with unions
representing its mechanics and flight attendants, both of which are currently
in mediation.
Aviation blogger Judson Rollins, who worked in Continental’s
revenue-management and marketing departments while the carrier was merging with
United, said Munoz had an excellent reputation on the labor-relations front
during his time at CSX.
“My expectation is that his entry in the CEO role will help
the company reach labor deals much sooner than under Smisek,” he wrote in an
email to Travel Weekly.
Rollins called Munoz “the perfect guy” to right the ship at
United and said that he expected a new focus on operational excellence that
could lead to the eventual departure of United COO Greg Hart.
Not all analysts, however, were as confident about the
impact that Munoz will have on the airline.
Scott Buck, an analyst for Imperial Capital, said he didn’t
make any adjustments to his investment model for United after the leadership
change last week.
“I believe it will take Munoz some time in the role before
we see any change in strategy or operations,” Buck said.
Smisek resigned on Sept. 8 as a result of an ongoing federal
corruption investigation associated with the Port Authority of New York and New
Jersey, United said.