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The Sky's The Limit If There's No Non-Compete: American Airlines Former President Soars Over To United

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The Sky's The Limit If There's No Non-Compete: American Airlines Former President Soars Over To United

United Continental Holdings Inc (NYSE: UAL) announced late Monday afternoon that Scott Kirby has been named president of United Airlines. As part of his duties in the newly created role, Kirby will assume responsibility for United's operations, marketing, sales and alliances, among other duties.

Kirby's appointment is effective immediately and will report to United Continental CEO Oscar Munoz.

Prior to joining United Continental, Kirby assumed a similar title as president at American Airlines Group Inc (NASDAQ: AAL).

Related Link: American Airlines Stock Is Neutral Despite Strong Management

The Wall Street Journal, citing "people familiar with the matter," suggested Kirby was told he needs to "transition out" of American Airlines. The company's board of directors decided it can't retain its executive team in their current roles for the long term.

Kirby didn't have a non-compete agreement in place, which means he was free to immediately transition to his new role at a rival airline. The Wall Street Journal also noted Kirby departed American Airlines with a $13 million severance package — a "highly unusual" move when an executive leaves a company to join a rival.

The Wall Street Journal noted that Kirby is "known in the industry for having strong views" and has a reputation of speaking "more openly than most executives."

Kirby has been with American Airlines since 1995 and played a crucial role in the 2005 merger of America West and US Airways.

Shares of United Continental were trading higher by nearly 4 percent at $48.73 ahead of Tuesday's market open, while shares of American Airlines Group were lower by more than 2 percent at $35.40.

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