How United Airlines President Scott Kirby Follows in Bob Crandall's Footsteps
Bob Crandall/Scott Kirby

Among the words that could describe United (UAL) President Scott Kirby's letter to employees Monday are these: passionate, intelligent, tough-minded, hub-obsessed and unrestrained.

Whatever words you choose, they cannot help but recall another former American (AAL) executive who, three decades ago, led airline industry thought.

Bob Crandall was president of American Airlines from 1980 to 1985 and CEO from 1985 to 1998. In management style, in many ways, Kirby is his descendant.

Kirby may not be quite as harsh as Crandall could be at times, but he clearly has the same high level of self-confidence and he at least begins to approach the best known description of Crandall -- "He's a son of a bitch, but he's our son of a bitch."

The description has been widely repeated. Its origin is unclear, but it apparently originated with labor; some credit a Transport Workers Union official. Unionized airline labor doesn't  always love such managers, but it generally recognizes their value.

Referring to Kirby, an American pilot who asked not to be named asked Monday after reading Kirby's letter: "How many millions did we pay this guy to leave for United and start gutting us?" When he left American in August, Kirby received a severance package valued at more than $13 million.

Another American pilot said both men were "highly regarded, detail oriented, network geniuses" who could be "intolerant of opposing opinions."

One other comparison: Crandall's biggest mistake may have been his 1992 decision to match and expand a Northwest fare cut, which came in reaction to his "Value Plan" that was intended to simplify American fares. His move dragged in other carriers and led to the biggest fare war in industry history, which cost the industry millions.

Today Kirby, like Crandall a believer in aggressive fare matching, is blamed for American's effort to match Spirit's pricing in Dallas in 2015, which dragged in other carriers and led to a fare war that cost the industry millions.

Nevertheless, Wall Street believed in Crandall and now believes in Kirby. On Aug. 30, 2016, the day Kirby signed on, United shares rose 9%, gaining about $1.5 billion in market capitalization. United shares opened at $46.95 on the day Kirby's hiring was announced and closed Wednesday at $75.39. American's share price gains trailed United's in 2016 and so far in 2017.

Kirby's letter includes an instructional primer on hub economics, celebrates a victory over American, masters detail, criticizes United for being "docile" in the past, and warns regional partners not to take advantage. It often sounds like Crandall were in Kirby's shoes.

An instructional portion reads: "When we add a new route to a hub that brings in more connecting traffic, it brings more customers to all of our other flights at that hub.

"All of our other flights become more successful, and then we can upgauge flights or add destinations that wouldn't have been profitable before," it continued. "Those upgauged flights and new destinations, in turn, bring more customers to flow back through the network so we can add a new round of destinations, frequencies and upgauges."

Like Crandall, who has said he advanced at American because he familiarized himself with more details than anyone else, Kirby offers specifics. Regarding Newark-Atlanta service, he wrote  that a decade ago, United flew eight daily flights on mainline jets, while Delta flew 11.

Then United downgauged to six flights on regional aircraft.

"Guess what happened then?" Kirby wrote, taking pleasure in describing the obvious. "Many of our EWR customers switched to Delta, because they didn't want to fly on regional jets and we didn't have the frequency to support their business needs."

He also describes the dynamics of the Chicago-Rochester, Minn., route, which works with regional jets but not with a mainline aircraft. "We have to use {regional jets} in the right markets, not places like EWR-ATL," he wrote.

Then Kirby mentions that United just signed a contract with regional carrier Air Wisconsin, taking aircraft that would have been used by American. "We get to add these additional aircraft feeding small-city traffic into our hubs, and AA loses lift that used to be feeding its hubs," he said. That's a double-payoff Crandallesque plan if ever there was one.

"United has spent several years shrinking and being a docile competitor," Kirby wrote. "Starting this summer, we're going back on offense." Then he warned United's regional partners that the relationships "need to be more balanced, both financially and in terms of the amount of flying each airline does."

In conclusion, Kirby apologized, saying, "I'm sorry for the really long note, but I'm just so excited about the future here at United that I couldn't help myself."

On that last point, the comparison ends -- it's tough to picture Crandall writing that bit.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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