United Airlines Names CFO as Munoz Fills Out Management Team

Updated on
  • Top finance executive joins from discount carrier Allegiant
  • Boston Consulting partner becomes chief commercial officer

United Airlines Chief Executive Officer Oscar Munoz filled a top finance spot that had been vacant for 12 months and replaced the longtime chief revenue officer, bolstering his management team almost a year after taking the helm.

Andrew Levy, 47, was named chief financial officer, joining the third-largest U.S. carrier from discounter Allegiant Airlines, United Continental Holdings Inc. said in a statement Thursday. The role had been unfilled since last August, when John Rainey resigned to take the same position at PayPal Holdings Inc. Senior Vice President Gerald Laderman served as interim CFO and will remain with United.

The airline appointed Julia Haywood, a partner at Boston Consulting Group, as chief commercial officer. She fills the role of Chief Revenue Officer James Compton, 60, who is retiring at year-end. Haywood, 37, most recently served as managing director at the consulting firm, working with United on revenue and network initiatives.

Munoz has pledged to reshape the executive corps he inherited when he became CEO last September and has been under pressure from investors to improve profit and labor relations. He suffered a heart attack a month into the new job and went on leave. Munoz subsequently had a heart transplant and returned to work in March.

‘Powerful Combination’

“Julia and Andrew bring a powerful combination of industry perspective and experience to our leadership team,” Munoz said in the statement. Levy served as president, chief operating officer and CFO at Allegiant, which he left in 2014. Haywood has worked with more than a dozen airlines.

In Levy, Munoz selected a veteran airline executive who filled a range of network planning, finance and operations roles at Allegiant over 13 years. When he left in 2014, CEO Maurice Gallagher credited Levy with helping the airline emerge from bankruptcy protection and with helping develop its low-cost approach and focus on leisure travel.

Allegiant has had safety incidents over the past couple of years that drew regulatory scrutiny. In July 2015 a pilot said he was so low on fuel that he needed to make an emergency landing, despite rules requiring that planes carry enough fuel to fly beyond their destinations. A Federal Aviation Administration review found only “minor” and “nonsystemic” issues.

No Nonsense

Allegiant’s safety issues mostly came after Levy’s departure, said Wolfe Research analyst Hunter Keay, who called the new CFO a “smart, blunt, no-nonsense guy.”

“They did not have the luxury of making a safe choice,” Keay said. “They’re in a position where they need to start thinking about shaking things up.”

Compton departs as United Continental’s second-ranking executive. He was a fixture at Continental Airlines, which he joined in 1995, before the 2010 merger. As chief revenue officer, Compton supervised functions including sales, revenue management, marketing and planning the hub and route network.

Investors have urged Munoz to close United’s profit gap with competitors, which developed on Compton’s watch. United’s operating profit margin was 13.6 percent last year, behind Delta Air Lines Inc.’s 19.2 percent, and American Airlines Group Inc.’s 15.1 percent. Much of that wasn’t Compton’s fault, Keay said, explaining that after its merger, United lacked the market-share dominance in its major hubs that other carriers had in their main locations.

‘Difficult Position’

“Jim Compton was in a very difficult position in the industry in trying to price a product that was inferior,” Keay said.

United reached major agreements last week with flight attendants and mechanics. The carrier’s approximately 25,000 attendants on Friday approved a contract joining United and Continental groups that had been prevented from working together since the two airlines merged six years ago. The carrier and its mechanics union also reached an agreement in principle on a contract that awaits approval by the Teamsters-represented membership.

For more on United’s labor contracts, click here.

Munoz said in June that he was reviewing United’s operations, including whether its hubs and its route network were fulfilling their mission. He is trying to find $3.1 billion in extra revenue and savings to match the airline’s U.S. peers in profitability.

United fell 1.6 percent to $47.39 at 12:07 p.m. in New York.

(Updates with analyst’s comments in eighth paragraph.)
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