Scott Kirby, who took over as CEO of United Airlines (NASDAQ: UAL) a week ago, wasted no time reshuffling the leadership team as the company tries to navigate the coronavirus crisis and a diminished travel market for the foreseeable future.
Late Wednesday he promoted Jon Roitman to chief operations officer, effective June 1. Greg Hart, the current COO who had indicated a desire to retire within 18 months or less, was tasked with developing medium- and long-term strategies for improved safety, hygiene and operating efficiency, and creating a more flexible structure for labor and other costs.
“Our costs are not designed for the near-term uncertainty of travel demand. Demand could be down 30% or it could be down 70%,” Kirby said in a message to employees that was released publicly. “The way to best survive this crisis is to be able to nimbly adjust the size of the airline, including labor costs, to meet demand and importantly, be ready to bounce back quickly when the virus is defeated. We believe we are working on ideas that no other airline in the world is considering. Greg is uniquely qualified to be a leader not just for United, but in world-wide aviation, taking us all to the next level on these issues that are so critical to our future.”
United reported a $1.7 billion loss in the first quarter and Kirby told analysts four weeks ago that management is planning for a worst-case scenario of zero net passenger revenue well into 2021. Like all airlines, United has aggressively cut passenger operations, as well as discretionary and capital expenditures. Payroll savings are also coming from tens of thousands of workers who volunteered for temporary unpaid leave, but United has been clear that permanent layoffs will be necessary once federal coronavirus relief aid runs out at the end of September.
Roitman is currently senior vice president of airport and network operations. In his new role, he will also be responsible for flight operations, technical operations and safety.
As part of the reorganization, Jan Krems, vice president of cargo, and Sarah Murphy, senior vice president of United Express, will report to Chief Commercial Officer Andrew Nocella. Toby Enqvist, the chief customer officer, will report to Brett Hart, who took over as president and chief administration officer on May 20.
United has reduced its flight schedule by about 90% through June, but Kirby said the airline is seeing more bookings and will operate at 75% of its pre-COVID capacity in July.
“While we can’t quite see the light at the end of the tunnel yet, it’s not pitch black in here anymore,” he said. “But there is more work to be done and I’m confident that today’s leadership changes will put United in an even better position to drive our near-term, operational goals, while at the same time create an environment where we can fly past our competitors when demand returns.”