Oscar Munoz is of Mexican heritage, the oldest of nine children raised in Southern California and among the first in his family to graduate from college.
CHICAGO — United Continental’ s new CEO, Oscar Munoz, takes control at the Chicago-based airline amid a brewing scandal as well as labor woes, poor customer service, technology issues and, yet, record profits.
Munoz is highly regarded as a railroad executive and known for being the biggest personality in the room, but his success is far from guaranteed.
Munoz, 56, took the top job at United last Tuesday as the company announced the resignations of CEO Jeff Smisek linked to a federal investigation of United’s dealings with the Port Authority of New York and New Jersey, which operates New York-area airports. The airline is under the microscope for adding a special route to South Carolina to potentially curry favor with the agency’s now-former chairman.
Oscar Munoz’s resume
Education: Graduated from the University of Southern California with a bachelor’s degree in business administration; master’s in business administration from Pepperdine University.
Career: Worked at Coca-Cola and PepsiCo; chief financial officer and vice president of consumer services at AT&T, 2001-03; president, chief operating officer and director of CSX Corp.; director of Continental Airlines since 2004; director for United Continental Holdings since 2010.
Outside the office: Active in several industry coalitions, and philanthropic and educational organizations, including the University of North Florida’s board of trustees and the PAFA advisory board of Vanderbilt University.
Honors: Named one of the “100 Most Influential Hispanics” by Hispanic Business magazine.
United did not make Munoz available for an interview.
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Munoz is of Mexican heritage, the oldest of nine children raised in Southern California.
After graduating with an undergraduate degree from the University of Southern California and an MBA from Pepperdine University, he quickly climbed the corporate ladder at companies with household brands — AT&T, Pepsi, Coca-Cola — before leaping to railroads in 2003 to take the chief financial officer job at rail giant CSX. He was named president in February, and, industry watchers say, was considered the heir apparent to the CEO job.
The change of companies and industries puts Munoz, named one of the “100 Most Influential Hispanics” by Hispanic Business magazine, in charge of the second-largest airline in the world and the largest private employer in Chicago.
Some industry watchers are not concerned with his leadership qualifications but his lack of experience in the day-to-day operations of the airline business, which in some ways varies dramatically from railroads.
Hunter Keay, an analyst with Wolfe Research, noted that there have been few true outsiders in airline C-suites in recent years.
And though United needed a “management and culture shake-up,” Munoz might not be equipped, at least immediately, to make some of the difficult changes, such as re-evaluating United’s hubs or positioning the airline to raise prices to make more money, he said in a note to investors.
“At CSX, Mr. Munoz was a proponent of pricing over volumes and was viewed by many investors as a shareholder-friendly executive. That’s good. But without a more reliable operation or even perhaps structural network changes, (United) simply won’t get pricing,” he wrote.
Munoz has made a transition to a new industry before, when he went from consumer products to rails, said William C. Vantuono, editor-in-chief of Railway Age magazine. He said he knows Munoz well, most recently interviewing him at a conference in June.
“I have a tremendous amount of respect for him as an executive, his abilities,” Vantuono said. “He was able to adapt to the rail industry quite well.”
Still, the competitive landscape is a big difference, said Morningstar analyst Keith Schoonmaker.
At CSX, which operates in the East, Munoz had to deal primarily with one direct competitor, Norfolk Southern, while airlines have many competitors.
“We think it’s a much more challenging market structure that United faces, compared with what CSX faces,” Schoonmaker said.
But Munoz “knows what a high-performing business looks like” from his time at CSX, which radically transformed itself during his tenure there by improving operations and raising prices, Schoonmaker said.
And part of the success at CSX has to be attributed to Munoz, he said.
“He made big promises there, and he delivered on them,” Schoonmaker said. “At CSX, he was generally the most enthusiastic person in the room at an investor meeting. He was very charismatic. And United, if it’s smarting a little after the awkward departure of previous leadership, having somebody who is bullish, an optimist and comes in with a lot of enthusiasm, it’s hard to measure that as a negative.”
Observers say positive things about Munoz personally and as an executive.
In 2011, Munoz and his wife, Catherine, gave $100,000 to the University of North Florida to fund, among other efforts, a scholarship for students who are the first in their family to attend college. Munoz is in his second five-year term as a trustee at the Jacksonville-based university.
Thomas Serwatka, vice president and chief of staff at the university, called Munoz a no-nonsense, straight-shooter who is easy to work with. “In many meetings, people will say the same things five different times,” Serwatka said. “Oscar would like to hear it only once.”
The first task for Munoz will be taking the first 90 days or so “traveling the system and listening and talking to our people and working with the management team,” he said Tuesday during a call with analysts, his only public comments since taking over.
United has some 84,000 employees.
“At the front of everything we do is we have to realize that we have millions of human beings traveling on our equipment, and they’re trying to get someplace, either a business or a family event, and we have just got to think of a service-excellence model, that all of us can work together,” Munoz said. “I call it a shared purpose, if you will. It’s important that we all believe in that.”
Two of United’s most influential unions, for pilots and flight attendants, welcomed the change in leadership.
The CEO swap and other executive changes “represents a new beginning and fresh course for United Airlines, its employees and passengers,” said Jay Heppner, chairman of the United Master Executive Council of the Air Line Pilots Association.
United flight attendants, who five years after the merger with Continental still don’t have a joint labor contract and recently filed for federal mediation, said Munoz has “an impressive business record, including at other highly unionized companies,” according to a statement by Sara Nelson, president of Association of Flight Attendants-CWA.
“We believe a fresh perspective will be healthy for United Airlines in all areas, especially where labor relations languished under previous leadership,” Nelson said.
Munoz told analysts he was committed to reaching agreements with the remaining unions, flight attendants and mechanics “as quickly as possible … but more importantly, beginning to build — for lack of a better term, a win-win environment for all our employees here at the company.”
Railway Age’s Vantuono said Munoz was known for good employee relations.
“I’d be very surprised if he didn’t inspire a lot of confidence among his employees and if morale at United didn’t increase,” he said. “Somebody like Oscar Munoz will bring a fresh approach to United. I think it can only do good.”
During his call with analysts, Munoz outlined in broad terms his plans to improve United, including “listening seriously to our customers, building teamwork across the many dimensions of this industry, and leveraging both innovation and technology. And of course, we’ll do all of this while maintaining a commitment to safety.”
Vicki Bryan, senior high yield analyst at Gimme Credit, an independent research service on corporate bonds, said in a note Wednesday that Munoz was a “rising star” at CSX and that the management change at United is “most welcome and long overdue.”
“While the board waited far too long to change horses, in our view, a promising new CEO Oscar Munoz is now in charge,” she wrote.