United Airlines CEO Scott Kirby on calculated bets and building a US flag carrier

Andrew Edgecliffe-Johnson (0:00)

You wrote a piece about your rationale for approaching American. Why did you decide to show your hand?

Scott Kirby (0:06)

Like everything I'm doing at United Airlines, everything that I think about is, how do we make a great airline for customers? And I am 100% certain that that merger would be good for customers.

Andrew Edgecliffe-Johnson (0:16)

So is the reason you're still talking about a deal that at the moment you don't have a partner for, because you're trying to put pressure on that partner and create the...

Scott Kirby (0:26)

No, the reason I'm talking about is because you asked me. I'm not talking about it on my own.

Andrew Edgecliffe-Johnson (0:31)

Today on The CEO Signal, we're talking to Scott Kirby, CEO of United Airlines, one of the world's largest carriers.

Penny Pritzker (0:37)

Kirby built his career as a numbers guy in the airline business.

Andrew Edgecliffe-Johnson (0:41)

And he likes big bets. He took over at the height of the pandemic and ordered hundreds of new planes when much of the industry was pulling back.

Penny Pritzker (0:49)

Now he's spending heavily on customer experience. His goal is to make people actively want to fly united rather than just choose their flight based on price and timing.

Andrew Edgecliffe-Johnson (1:00)

And he's also been looking at an even bigger move. This year, he tried to open merger talks with American and Delta. They both said no. So how does Scott Kirby decide what's worth betting on, especially when the odds are long and the stakes are high? From Semafor, this is The CEO Signal.

Good to see you, Penny, and great to be back in your hometown of Chicago.

Penny Pritzker (1:30)

So glad to have you here, and we're here at United's headquarters.

Andrew Edgecliffe-Johnson (1:34)

Yeah, very appropriate setting for our conversation with Scott Kirby. And he's a pretty interesting CEO. We're catching him at a very interesting time for United.

Penny Pritzker (1:43)

Yes, he's been three decades in the airline industry. I think he was at America West, American, and now at United. And I think he was fired from American, but joined United about 10 years ago and became CEO in 2020

Andrew Edgecliffe-Johnson (1:56)

And Scott Kirby is a math guy who's got a deeply analytical background, but that gives him a fascinating relationship with risk, including his past career playing blackjack, where he got good enough to be banned from several casinos. So I want to hear from him about how he takes calculated risks in the CEO's position.

Penny Pritzker (2:16)

I really also want to understand, how does he deal with making decisions and choices so far in advance from when you ultimately get your equipment?

Andrew Edgecliffe-Johnson (2:26)

And he's just taken one of his biggest gambles to date, where he made overtures to American Airlines, his old employer, about a possible merger. American wasn't interested. That seems to have gone nowhere. There was subsequent reporting that he also broached a deal with Delta Airlines, so he's got some pretty ambitious plans for consolidating this industry. I want to hear whether there's anything still going on those, whether he still has hopes of getting greater scale for United. So I think it's going to be a fascinating conversation.

Penny Pritzker (2:58)

Let's invite him in.

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Penny Pritzker (3:25)

The CEO Signal, we're thrilled to have you here.

Scott Kirby (3:28)

Yeah, looking forward to it.

Andrew Edgecliffe-Johnson (3:29)

Yeah, thank Thanks you for joining us. Scott, and I want to start with your rather unusual path into this industry. You started life, your professional life studying computer science, then operations technology, I think, while training to be a pilot for the Air Force.

But you also had this sideline as a gambler.

Scott Kirby (3:48)

I did, yeah.

Andrew Edgecliffe-Johnson (3:49)

Tell us where the blackjack...

Scott Kirby (3:50)

The truth is, all those things hang together. Yeah, how did the blackjack come into that?

I like math, and I like high expected risk-reward, you know, those kinds of equations. And so I went to the Air Force Academy intending to be a pilot. I wanted to be a fighter pilot. And while a cadet realized I was not going to be a fighter pilot, and I didn't want to be a cargo pilot, so I chose not to go to pilot training. I got my degree in operations research, which is really math, applied math. And the gambling along the way is consistent with that mathematical mentality, because everything I've done was positive expected value gambling. And the biggest was, I was card counter for many years, did well, and got barred from everywhere in Nevada and lots of other places around the country.