Few industries have been as adversely impacted by the COVID-19 pandemic shutdown as the airline industry. U.S.-based airlines reported combined losses of $12 billion in the second quarter of 2020, according to a recent CNN report, as revenue plunged 86 percent from the prior year. Third quarter results weren’t expected to be much better.
Marshall Dean Geoff Garrett discussed this “Black Swan” event and more with USC Trustee Oscar Munoz ’82, former CEO and current executive chairman of the board for United Airlines.
Munoz became the CEO of United Airlines in 2015, after a long executive career across industries including consumer-packaged goods, telecommunications and transportation. In 2020, he stepped down as CEO to become the Executive Chairman of the Board of Directors in 2020.
Growing up in a Mexican-American family in Southern California, Munoz was the first in his family to attend college. He graduated from USC Marshall in 1982 with a B.S. in finance and strategy. He earned an MBA from Pepperdine in 1986. He kept his Trojan ties close (he met his wife at USC), and in 2018 he was named to the USC Board of Trustees.
Munoz was scheduled to be the commencement speaker at the 2020 undergraduate ceremony. But when the pandemic sent everyone home, he presented a special virtual message to graduates.
On the Importance of Diversity in the Workplace
Geoff Garrett: “You joined United and there was one other Latino CEO in the Fortune 500. How do you think about the liabilities for corporate America of not having a diverse C-suite?”
Oscar Munoz: “For me, it’s a very pragmatic case for diversity, not only hiring and promoting, but there’s also the personal. At the end of the day, this whole concept of diversity and inclusion is frankly nothing but personal for me.”
“The corporate data is in. We’ve all read it. The more diverse an organization is the better its performance whether it’s revenue or market cap. But your whole life and experience really shapes the way you lead. Who I am, how I grew up, that environment really shapes how I connect and how I direct my conversations.”
On Airlines Recovering from the Effects of COVID-19
GG: “How much bigger was this downturn than the post 9-11 downturn?”
OM: “It’s going to be five to 10 times worse.”
“Looking forward, I have contended from day one that until a vaccine is first developed—but also operationalized, because that’s a big next step—we’re not going to return to the way things were. What we need to do is weather the storm until we can get back to port.”
On Managing Through a Crisis
GG: “When you look back on the decisions you had to make in March and April, when things you thought weren’t humanly possible all happened, how do you remember that one-month period?”
OM: “Things that don't kill you make you stronger, I think we’ve all heard that. And because our industry, our company had gone through some things, my leadership team and myself, our steel was strengthened.”
“Everything can be solved by facts and data. When we heard that this COVID had hit Italy, we began to see numbers that were scary. Overnight, people weren’t booking flights to Italy. The quick extrapolation we did as a company was that this was going to hit the U.S., and we had to prepare for a business that was down 25 percent, 50 percent…75 percent. The immediate question was, how long can we go?”
On Learning to Become an Effective Communicator
GG: “Did you have to learn to be a communicator? Or was that something that came naturally to you?”
OM: “I don’t think many of us are born with such natural skill that it doesn’t require hard work and practice. Some advice I would give to folks, and the advice I have been given myself: Be yourself. Your passion, your enthusiasm, those are the true selves that shine through.
Especially in leadership. When you’re leading 100,000 people like I am, and we have to make some difficult decisions, you can’t be in every nook and cranny in every airport. But you can be in people’s hearts and in people’s minds.”