APEX Insight: Oscar Munoz has the rare mix of acumen and charisma that’s allowed him to pilot through competitive terrain with ease – a skill set that will serve him well as he embarks on year two in command of United’s comeback.
United Airlines has a bad rap, and nobody gets that more than Oscar Munoz. Holding third in rank among the United States’ big three carriers – American Airlines and Delta Air Lines claim the one and two positions – the last decade has, for the airline, been fraught with bitter union disputes, brushes with bankruptcy, a bumpy merger with Continental and a CEO embroiled in an antitrust lawsuit. This has led to bad customer service, a rise in flyer complaints and a nosedive in stocks.
On September 8, 2015, Munoz stepped into the role of chief executive officer amid the controversy. He chose to be frank about the airline’s troubles. “Let’s be honest, the implementation of the United and Continental merger has been rocky for customers and employees,” he said the following month, in a widely publicized open letter penned to passengers and staff. Accompanied with the letter, Munoz launched UnitedAirtime.com, a site for receiving and addressing customer and employee feedback.
In less than 24 days on the job, he had met with employees and several customers with a simple agenda: to listen. “I am completely focused on creating an environment where listening has greater value and is essential to creating and implementing innovative solutions,” he shared on his LinkedIn page. But Munoz recognized that listening was only half the equation. “An employee told me that United could be the best airline in the world if it just turned lip service into action. I couldn’t agree more.”
Rhapsody in Blue
As the oldest of nine siblings, it isn’t difficult to imagine where Munoz developed his listening and leadership skills. “I grew up in a modest blue-collar home in Southern California,” he writes in another LinkedIn post. His Mexican-born parents provided for the family with his father earning wages as a meat cutter and his mother taking on the enormous task of raising nine children, and instilling a strong work ethic in Munoz at an early age. Scouting prep schools and plotting out his career path to becoming CEO of an airline didn’t make up much of the table talk over family dinners, though. “My parents didn’t go to college, and it certainly wasn’t the thing my friends and I were thinking about in high school,” he continues writing.
He credits a high school adviser with giving him the push to become the first in his family to go to college. “She went out of her way to take an interest in me and my future,” he adds. “Thanks to her encouragement and guidance, I was well on my way to applying to the kinds of universities I never dreamed of attending before.” Her lesson of kindness was one that he would never forget. After earning a BS in business administration from the University of Southern California (where he met his wife, Catherine) and an MBA from Pepperdine, Munoz catapulted headlong into a business career.
By 1986, at 27 years old, he had already made the rare leap from PepsiCo to its long-time rival, Coca-Cola. He was kind of a big deal, but as he recalls in a 2012 interview for Hispanic Executive magazine, he wasn’t that big of a deal. “After about a year with Coca-Cola, I met with my boss, who told me I was exceeding everyone’s expectations and doing a great job,” he recounts. “However, my boss then said, a bit hesitantly, that despite my great performance, I should consider a bit of advice: ‘You may not be as good as you think you are.’ That conversation was a true lesson in humility and has shaped my leadership style and expectations of myself ever since.”
Having taken his lesson in humility in stride, he climbed the soda company’s corporate rungs to become a regional vice-president of Finance and Administration in what was then, and still is, a billion-dollar soda market. After a stint in the communications sector with US West and then AT&T, he moved into the transportation industry in 2003 as executive vice-president and chief financial officer of CSX, a freight transport company, where he eventually became president and COO before leaving for United.
The Friendly Skies
After launching UnitedAirtime.com, Munoz’s inbox ballooned with thousands of e-mails containing both criticisms and ideas from employees. “I’m glad you asked us for e-mails. So please listen and hear what we say. We have great ideas!” wrote Stacey, a long-time purser for the airline. “Thanks so much for being frank and to the point! I already believe wonderful things are ahead!!” exclaimed Bridget, a Honolulu-based customer service representative.
Only a month in, Munoz’s inside-out strategy that sought to lift the airline with higher employee morale was already taking effect. Xi’an was added as the latest Chinese destination cleared for nonstop 787 Dreamliner service; re-energized negotiations with labor groups were taking shape; and in response to complaints about the airline’s coffee, a new partnership with illy was brewing. Plus, Munoz, who maintained a coffee-free vegan diet, had just completed a triathlon. A fitness buff, he traded surfing along Florida’s Ponte Vedra Beach – not far from Jacksonville, where his wife stayed to see their youngest of four through high school – for jogging and biking in Chicago, where he rented an apartment.
Three days after responding to Bridget’s e-mail, Munoz returned to his apartment, fresh from an early-morning workout, when his legs buckled below him: He was having a heart attack. He was rushed to Northwestern Memorial Hospital, where a left ventricular device was implanted in his chest, accompanied by an eight-pound battery affixed to his side that would power him through recovery, and until a transplant would become available. E-mails continued to pour in, only now expressing well wishes and prayers.
Munoz impressively bounced back after two months, and his commitment to the airline not only inspired the United team, but also impressed the airline’s hedge fund executives and industry peers. While out on a United strategy retreat, on January 5, 2016, his birthday, he got the call that a heart was available and he underwent an 11-hour transplant surgery.
A United United
Munoz isn’t shy about his near-death experience, but he does shy away from using it to redefine his leadership of the airline. “My opening letter to my employees dealt with the same issues that we’re dealing with today,” he said in a recent interview, lightly shrugging off the notion that he’s a changed man running a profoundly changed airline. Change and heart, he explained, had already been in the air. Now it was being put to action.
Thanks to Airtime feedback, United made good with several improvements, from posting its best on-time performance in company history to redesigning uniforms for comfort and durability. Stroopwafels and savory snacks are back in economy class; Wi-Fi has been installed across the airline’s entire domestic and international mainline fleet; automated security screening and upgraded lounges have been rolled out to improve the airport experience; and last June, the airline made headlines with the unveiling of Polaris, its reimagining of international business-class travel. To compete with the American low-cost carriers, a “Basic Economy” tier was introduced in November for those willing to fly without the frills.
“I am completely focused on creating an environment where listening has greater value.” – Oscar Munoz, United Airlines
However, not every decision Munoz has made has been met with unanimous praise – “There’s not a single good deed I could do on an airline that does not get punished,” he’s remarked. But momentum, along with United’s stock, is clearly on the rise. And while he’s prepared himself to ride the airline’s upswing with a fresh-faced leadership team, which includes recently appointed president Scott Kirby, Munoz continues to find ways to stay grounded and contribute to the causes he champions, such as diversity and education.
As one of only 10 Hispanic CEOs leading a Fortune 500 company in the United States, Munoz has used his success to empower others: His wife funds a statewide program in Florida for first-generation college students, a presidential professorship and a presidential fellowship focused on graduate education at the University of North Florida. “Our parents taught us to work hard and never forget our family roots, where we came from, and how much effort it took to get to where we are today,” he told Hispanic Business magazine.
And in the wake of a Trump presidency, Munoz echoed that conviction in a memo to employees. “Though the state of our politics may have changed … our character as individuals remains the same,” he said. “And so should the way we respect one another and take care of each other. That is the spirit that keeps us flying together as one, United team.”
“Oscar Munoz: Chief Executive Officer, United Airlines” was originally published in the 7.1 February/March issue of APEX Experience magazine.