Oscar Munoz

boosting on time performance and renegotiating worker contracts. You knows was so successful in his role that pr Week named him the Communicator of the Year in March of However, one month later, Minos faced another test after a ticketed United passenger was forcefully removed from a flight, becoming a national news story and a major headache for the company.

In the wake of the controversy, the United board decided that Munos would not take over as chairman of the company, as had been originally plug end, but he was able to keep his job, although his salary for was just half of what it was in He recently sat down with Carlisle Group co founder David Rubenstein They spoke on David Rubenstein's Bloomberg television program Peer to Peer Conversations. First, I want to talk about an incredible story that many

here may not be familiar with. So let's talk about your background initially to get to this story. You grew up in California and you had eight siblings. I do, And what does that like? I'm an only child. What was it like when you have eight siblings? Is that easy to do? Or if you're an only child, it's probably hard to reference a good point of view? But now it was hectic, it was crazy. Um, we shared everything. We had first and second lunch because we couldn't fit

everybody at the first table. Um. When I first brought my wife home for Thanksgiving, UM, I said, okay, honey, let's just get ready. Okay, because this will be not normal. It was great when you're growing up, you were a must have been a good student. You got into Harvard, then you chose not to go. Why was that? It was an awkward moment? Um, I'm the first goal to college came blue collar family. Uh, and we were invited to an event that was a black tie optional event.

I don't know what that means at that time, and my dad certainly didn't. And we had to walk across. First of all, we got stopped at the door because they said you must be lost because it the way we were dressed. And I had to remember I was in high school. My hair was down to here. I grew up in Huntington Beach, so it was a surfer kid, and my hair was red and long and ratty, and

I thought I looked good. Um, So walking across a room of this size with all eyes upon you, and then sitting at a table where everybody asking you questions like who are you? What's your major? And none of the none of things that I knew. So I knew that wasn't quite the right fit. And Southern cal was just closer to home in a great university. Have you ever thought when you could have accomplished with your life head you're going to Harvard? God knows that could be

in that seaton, right. So, Um, you went to U s C. University of Southern California, and obviously did well. You work your way up and ultimately you find yourself at CSX, a railroad company, and you were working your weapon. You were president and CEO. Is that correct? You're probably about ready to be made CEO, and at the same time you're on the board of a company called United Airlines. So one day, Um, there's a need to have a new CEO and they asked you to be the CEO.

And why did you want to leave Florida for Chicago? And why did you want to give up running a railroad which is maybe not as complicated as running an airline. Why did you do want to do that? One of the more complicated questions in my life right Uh. And to add to that, by the way, my first daughter was getting married, um, right around that time frame, and we had the wedding plan. My wife entire sole interest over the course of that momentous decision was you better

get your father the bride speech done. But now it was a difficult It's listen, I and there's some friends from CSX that are here today and it was a wonderful place. Frankly, I just thought I had another turnaround in me a and b Um, when you meet the people of United and what we needed at United was someone that could relate to the everyday folks that we work with, and I thought I could do that better than the most So one month after you take this job, you get a heart attack. You never go to any

conversation without this one. But thirty eight days to be exact. All right, So did you think maybe you had taken the wrong job? It was too much pressure? And you know you were a vegan and you were an exerciser and you run marathons or so what went wrong? Um? So it's a quick public service announcement to all of us in the room. Heart disease is the biggest killer in America. To be serious, Um, most the reason why

is most of us don't know we have it. My family background didn't allow me to understand a lot of my history. And so again, being relatively fit and eating crazy like a vegan, you think that nothing would happen, and something did. And I think when you talk to cardiologis, we talked to hard specialists. Unfortunately. You know some of the things internal you're plumbing is what affects you. So so you have your heart attack and then they come

in and say, guess what, you need a heart transplant? Yeah, so were you a little surprised about that? It was a little surprised and a little hesitant. Um. You know, they talk about the fact that heart transplant surgeries are ninety three percent uh successful the actual surgery, and of course us being who we are, it's like, so what happens to the seven percent? Not a good answer on that one, by the way, So when they came in and told you you needed a heart transplant, did you

ask for a second opinion or anything like that. We did travel around and I'm unfortunate enough to know people all over the country, and I was trying to figure out if there was something else because more to us guys in particular, I think we can fix things. Right. It's like I'll just you know, run it off or something. Um. That is not true, ladies and gentlemen, you cannot fix

these things. And what the doctors around the world that I trust and no told me, They said, sit your butt down and get the surgery because that's the only way you're gonna live. Okay, It's one thing to say you need a hard transplant, but you gotta get a heart. So I don't get the weight online for a long time. How did you? How did you get a heart? It is the most one of the most byzantine processes of how you apply and what levels you're in and how

all this gets worked. It's very well regulated and and modulated so that people don't take advantage in any way, shape or form um. But I was very fortunate I was on a list and uh on my birthday reason John On on on my birthday, in the morning of my doctor Anderson called and said, quote, have we got a gas heart for you? Um, and we happen to be at a meeting in uh United It's kind of a strategy vision going forward that were I was in the

middle of it. I had come back from my heart attack and I had this device and I stood up after launch. We're determining actually the strategic future of the of the company, where all the things that we've been able to do with the last couple of years and all the things that we're doing. But uh, as we bro I knew that morning I had to go into the hospital that afternoon, and UH so I went to the meetings because what else am I going to do

for the morning. Uh, And we were excited. And then I didn't say anything other than my general council and a couple of Boloks to make sure they knew. But I did stand up at lunch and said I'm not going to be back after lunch. I gotta go to the hospital. I got this thing I gotta do. But there's a classic line that I didn't mean to say the way I said it. But I said, I'll see you on the other side. And again, as you know, they could have a lot of meetings. Uh, I meant

the most positive meeting meeting. Hey, I'll be back. And so the surgery was went great. I was in and out. I was out of the gosh, a twenty one year old beat me as far as the history of Northwestern Hospital. But I was out in about seven days. I don't know Thursday. I was back in the office on Monday in smaller levels. Now we didn't tell the world an analyst and investors that because they freaked out, But I was. I was spending a lot time back in the office.

All right, So today you're in pretty good shape. You have a hard transplant, but other than immune issues from time to time, you're feeling as good as you could possibly feel. I think most people wouldn't ask the table. Yes, he's I mean, we're always I'm always running around. I just came back from Australia. And then now that there's no restriction, and you still exercise a lot, not a lot, because the job unfortunately takes you up. I'm not Dennis

Mullenberg from boring. I ride bikes with him. But so I haven't thought that maybe exercising and being a vegan isn't such a good thing, and maybe don't exercise and eat all the meat would be better. Have you ever thought of that? Uh? My doctor, who is um a larger gentleman, I think, would advise me. He advised me to go from vegan to what he calls flexitarian, meaning eat what the hell you want. Um all right, but hea lots of it's because you need to gain weight,

all right. So let's talk about the airline industry that you're now. Thank you, all right. People love to fly around the world at relatively low prices. But why is it that generally the public doesn't seem to like airlines. Well,

a couple of things. You're right, prices, Since so next year will be the forty anniversary of deregulation, and so many new things have been offered, so many products, and to your point on pricing, I think the numbers forty on inflation adjusted basis prices are actually lower schedules are increased, we have much further reach. Um. But the customer has evolved as well. And again, as I said, we have a hundred and fifty million of you wonderful people every year,

and you all have opinions on various aspects. And um, you know, not everyone dislikes things, but people that fly very infrequently. So for instance, uh, luggage and a fee around luggage that if you haven't flown in a few years and now you have to pay it, you get angry. And so things have evolved. Good thing is the airly

industry is generally profitable. Where you used to hear about us in bankruptcy every other day, And so we have to balance that history of providing everything you want all the time at a low price to still having a relatively low economic price, but also adding all the product and value and schedule and efficiency that we've been able to do in the old days. You pointed out old days thirty years ago or so, a lot of airlines were going out of business. I've read about the old

days and Grand f t W A Trump shuttle. They're not around anymore. Um, I don't know what happened not going there, So I don't know that They've you ever fly on the Trump shuttle? I don't know. But uh so, why are there so many airlines that went out of business but today the airline seemed to be profitable? Was that because you the algorithms have worked, so you know how to actually have not too many empty seats? Well, um,

consolidation has helped. Um. I mentioned my railroad experience, and I think if you look at their history, I think the airline has closely followed the same evolution of less folks vying for the same amount of customers. Uh certainly, as part of it, I think some discipline around how we invest, how much product we offer, how we price,

and how more importantly, how we're efficient. But underlying it all, I can never forget the fact that this product is supported by the human beings that run the airline every single day. What's the best way to get the lowest price of people go online and book it themselves, that to go through a travel agent. Probably in broad aspects, the further out you book, the better options that you have.

But people use an interesting array of folks. So travel agents are still big customers of ours, and they're still part of it. Our direct channels for US United dot Com is a growing channel. So is it possible that somebody could be sitting next to somebody else on airline he or she paid a lower price in the person sitting right next to him or her. Nobody talks about that. But yeah, it's been an issue forever. I mean, you've got a corporate customer on a corporate discuss us someone

that booked far ahead. UM. So usually, I mean I don't know about you in the room. I don't usually ask who's sitting next to me here? By the way, how much did you pay for that ticket? Um? But it is an issue, but it's not a significant one. Well, let's talk about you're flying. Um, I assume you're not flying on private planes anymore. Uh. No, you gotta eat with your cooks. I'm I'm very comfortable with our wonder right.

So when you want to need a reservation, you have any problems getting uh you know, getting a seat or anything in a We booked through the normal channels, and what we call it, it's it's positive space or space availably, meaning I'll look of light and if it's booked, I'll find another flight like everyone else. Can you be you on your airline and not have people come up and tell you what you should do better or bother you or is that how does that work? Yeah, it's not

not an easy task anymore. Pet. You're fairly recognized. So the further back you go, the less you're recognized. In the front of the cabin, it's almost impossible. And people do want to chat and provide input and feedback on many things. Obtrusive. Yes, I've had people you know, read like, I'll put my my headphones on and pretend to do something so I can try to sleep. They'll reach over and take it out. It gets worse. Um, so I'll

be in the smart person that I am. I went to the earbuds, figured they can't reach and get those. Oh contrary, this guy reached in and grabbed this thing, which is at all obtrusiapan no listen, it's um. All of us that are in this business do this a lot, and it's important to hear from your customers and increasing in our business it's more positive. But you have a lot of people in first class whop when they don't like something, they say, do you know who I am?

You had a lot of that. We have wonderful customers who have a very high degree of self impoint. I guess one percentage of luggage is lost by the industry generally. I'm sure yours is better, but by complaints, uh per I think a thousand employments, it's like three per thousand over the course of time. And the best way to avoid ahead of your luggage lost is do what just carry it on or your predicate I don't not an agreement,

which we don't. We don't lose that much luggage, um and if we do, we get it right to you. In fact, we institute it into policy last year. It used to be kind of owners where if indeed something got lost and we couldn't find it, we made you put you know, we needed receipts for everything that was in your bag, including things you know, I mean, who keeps receipts for your underwear and your toothbrush? So we institute it a thing. It's like, listen, you trusted me

with your bag, we lost it. Here's as soon as you ask. I guess in the number. Because it's important for us to build the trust. We don't lose them that often. We need you to trust us, and what we do we have to act on it very quickly. And now in the old days, the old old days, people were worried about the safety of flying. Today if people care about the safety very much and you don't have a lot of accidents in the industry now, um, you know that's that's one of the safety is by

far tipe priority. Interesting, safety and security has been an increasing focus. So there'll be things that you as customers don't enjoy, you don't like for a lot of different reasons. Uh, it's just unfortunately, at this time, at this day and age, with safety and security have to be our top most concerns. Sometimes that gets in the way of a customer service you'd like or wish. But I think we'll all agree that safety and security or paramount. So let's talk about

some of your specific issues that have arisen recently. You're probably familiar with them, so, um no, but I'm sure you're going to remind me. Okay, there was a flight where, um, I think there were some United employees that needed to go somewhere and you were trying to get people to get off the airline. You offer money, which is a fairly standard thing to do, and one person said, I can't get off. I'm a doctor, I have to operate in the morning and not united, but the local police

dragged him off. Yeah, it's, you know, one of the dark moments and in our in our time, and usually the question is are you glad that's getting behind you or something? And I always say now, I'm happy to be reminded of it every day begin and so is our is our company because it's important to know how

quickly things can go sideways on us. And so the circumstances that led up to that, all the different policies and procedures in a nutshell again because safety and security and operational efficiency becomes we become so focused and it's important that we do that. The rigor and discipline around safety, security and operations doesn't necessarily apply to the comfort and the and the quality and the emotional connection as a human on customer service. And so are rules and procedures.

You can't put always rules and procedures on how you treat another human being, which is why we've started UH over the last year something we call Core four and it's and it's four principles that are in order. And if you, if you as an employee, have any concern or any question about how to act. You deal with safety first, the number two, and this is the big change for us. It's caring. Just the simple word caring. What does that mean? Can mean a lot to a

lot of people. But it doesn't mean shutting the door, It doesn't mean yanking someone off the plane, doesn't mean any of those things. And then you get to dependable and efficient, which are important, but there are four. They're simple, but carrying the number two. So let's talk about another problem you had, which was dogs. You're not the only one to have dogs die and overhand compartments. Yeah, let me just a little bit of defensiveness on my part. We we as a as a as a company because

we understand how important pets are. The fall, which you may not agree with given the circumstances, but we flew three times as many animals for people all over the world because no other airline really was doing that. So we're doing it as a customer aspect. When you open up the arm to that many animals across a lot of things, you introduced risk into it. And so um, what we've done is we derisk the situation. We just brought that things back down is to what kind of

dogs we carry animals. That's very aligned with the rest of the airline world. We've noticed a lot of people have things called emotional support animals or something like that, where they get a certificate from a doctor saying I can't travel without this animal, whatever the animal might be. Are people abusing that and you're getting a lot of big animals on your planes as a result. Yeah, y'all, anyone's heard about the peacocks story, so I think that

won't go into that one. We just had a recent experience where one of the emotional support animals wait for it, required another emotional support animals. Uh. So it was a dog and a monkey. And somebody asked me earlier today which one was supporting so and I don't know that answered, but I said, no. Listen, on a serious note, people that need things. Uh you know, the problem is it's abused because it's not regulated in any way, shape or form, and anybody can get in and so we don't know.

So if you have a need, I mean so service animals for disabled veterans, for people that are blind. We bend over twice over backwards to ensure we take care of the people that truly need aspect, but when you get into the ridiculous stage where a peacock or two different animals and most of the consumers I mean if you have allergies, so all of that has to be modulated and worked and there's no real rules around it. And so we've taken, along with the other airlines, pretty

harder stance. It's like, we need to have some proof, you need to register the animal. It has to be of a general size. We have small ponies, snakes, I mean, there's a and again it sounds funny, but our flight attendants an organization have to deal with this. And so you know, back to we're putting humans and we're getting uncomfortable getting them on their seats, and then all of a sudden you have to deal with that and that and many other issues that we How do you deal

with sexual harassment? Yeah, I just fundamentally, as an individual human don't understand how people can um do things that we hear people doing. So that's just a personal opinion. Um. In addition, people don't want to sit next to someone because of their race, or their sex, or their color, and frankly, I don't have a lot of time for that. This is where customer service for me personally kind of goes out the window and says, you know, you want to fly us elsewhere because we don't want to deal

with that. But the issue is the really issues of sexual harassment safety in general is a very important one for us. We partner with the people Sarah Nelson's here from the American Flat Attendant Organization. We've listened to them because they're the ones that generally have to take some of the bront of this, and it's it's it can be awful, and and it's been quiet for a long time. It's been going on for a long period of time, and we just had a deaf ear to it. And

now the issue is that you have human trafficking. By the way, there is another angle that we have to ask our flight attendants to how do you recognize it? How do you resolve it? And then inevitably have false positives when you see something going on and then we pull someone off the aircraft and you have you know, law enforcement meet them and it turns out to be something different, and of course we get sued. And that's always has been an argument for why we shouldn't do

some of those things. I say nay, I say listen, we'll take the heat for the things, the minority of things, in order to fix the broader issue, because it's a real issue. Do you hold the airlines for anybody? Like there's a rumor in washing that members of Congress can get airlines held for them. Is that there any truth to that? Um? We generally, as an operation don't want to hold anything because we have a schedule to keep.

But if one of my gate agents sees, uh, you know, a young woman with three kids, you know, running down the and and but our schedule says we close it in thirty seconds and she's a minute away or ten minutes away, whatever, we have historically tended to shut the door to get it out on time. Again, we say, hey, we are gonna allow our gate agents to make that call and hold that aircraft for the right amount of

time for the right person. You know, the morning flight you can let it go because you have other options, it's the last flight of the day, you can you can hold it for someone. So we don't hold aircraft for anyone, not members of Congress, nobody. We don't hold aircraft for any Okay, Now, on your planes, do you have WiFi on most of your planes or a lot of them. Boy, that's another loaded question, um again on what Yes, we do we have WiFi and it's a

huge focus for us. Some of the technology is evolving, some of it's better than others, and so we have a mismatch. But again, remember you're not in your living room, uh, streaming Netflix. You're in the air flying at six miles an hour. We forget that sometimes and it does. It's it is Uh, it is inconsistent, which is the worst thing that we can do to you as a customer here. So we're working on that, but it will take some time. I suppose I have three airlines to pick from American Delta,

you know it to fly across the country. Why should I pick United over your peers. This is a great company with importantly, probably of our greatest and most valuable asset is our humans and our people that work with us, and the level of of of of spirit and service and caring that they're going to be increasingly given to you. I think it's going to make the difference that place digitals will always be. But I think the human aspect

we forget. We are a person to person, human to human business and all the other things don't matter as much, right, So no regrets about taking the job. You don't think if you'd state at CSX, you wouldn't have had your hard transplant right there would have happened anyways, that right, Yeah, regrets is a wonderful academic and theoretical term, but that I don't it's not practical. I love what I do, I love my company before, and I really love my United family today. So no regrets at all.