I know it’s usually 3 links, but this week it’s only 2 since they’re big ones.
This week’s featured link:
United Appoints New Senior Leaders
It’s taken United President Oscar Munoz a long time, but he’s finally started building out his senior management team at United. Andrew Levy, former President of Allegiant, will become Chief Financial Officer. (Gerry Laderman who is acting CFO will stay with the airline doing what he did before.) Then Julia Haywood, a BCG consultant, will become the Chief Commercial Officer. (Jim Compton is retiring.)
I like Andrew, but more importantly for the airline, Wall St does too. Here’s a quote from Duane Pfennigwerth at Evercore.
While the company’s rush to inflate numerous union contracts prior to his tenure can’t be undone, we’d guess from arms length he will find many opportunities to streamline United’s nonunionized cost structure. It has always been a bit difficult for us to detect low-cost DNA when visiting United at a downtown Chicago office tower. This hire adds credibility to the company’s longer-term cost initiatives, in our view. He can also contribute to ancillary revenue innovation to the extent the CFO has a seat at the table in such matters.
So Wall St is happy with this pick, but the rank and file? It’s a different message. They’ll see his background at Allegiant as a huge red flag. They’ll worry he’ll be there to cut costs too much. Then there’s also his previous stint at Savoy Capital, Frank Lorenzo’s company. Yes, they won’t like any of that. It doesn’t mean he won’t do a good job. It just means he already has a high hurdle to overcome internally.
While Wall St may have liked Andrew Levy, United’s stock did go down after the announcement. I have to wonder if that’s more about the hiring of Julia Haywood. I don’t know her, and Wall St doesn’t appear to either. All I know is her airline experience appears to be solely as a consultant, which concerns me. There are good airline consultants out there, but that doesn’t necessarily translate into them being a good airline exec. United already has a President with no airline managerial experience and now it has a Chief Commercial Officer with none as well. Can she really manage the commercial side of the operation?
Two One for the road:
A $652-million project to move LAX runway will be scrapped after lawsuit – Los Angeles Times
There is some huge news out of LAX. It appears the city is about to settle with the surrounding neighborhoods. I’m still waiting to see the MOU, but if this article is correct, LAX will scrap its plan to move the northern runways further north. It’ll also build a park in the neighborhood. In exchange? The gate cap that is hamstringing the airport will be lifted. If that is indeed the extent of the deal, then this is a smart move by the Mayor and it will have huge benefit for travelers.
