United-Continental Merger: Suspicions Confirmed as Exec Team Leans Toward Continental

Last Updated Jul 30, 2010 5:18 PM EDT

United (UAUA) and Continental (CAL) have released their post-merger executive team, and it looks like the house-cleaning has begun up in Chicago. As predicted here long ago, United President John Tague is out at the combined airline as are other key United execs. Meanwhile, the Continental people are mostly keeping their jobs. This is just a start, but it seems clear the weight is tilting toward Continental.

We already knew that Continental's President and CEO Jeff Smisek would retain his titles in the new company. United's chief, Glenn Tilton, will remain as non-executive chairman, counting his money. But now the rest of the C-level execs have been announced.

The biggest news is not who is in but rather who is out. On the United side, Tague is gone, as I had fully expected. He was the only one who could have challenged Jeff Smisek's mandate to lead the company, and I'm sure Jeff didn't want that clash going on. Don't cry for John; he'll undoubtedly take his millions and enjoy some time off.

In the battle of finance execs, Continental was the winner as well. Zane Rowe will keep his job as CFO while United's Kathryn Mikells will be out. For marketing, Continental's Jim Compton will be running the show. Continental's Nene Foxhall will communications and government affairs. See where this is going? It's a bloodbath for the United tulip.

United will have some execs in place, of course, but very few will hold the same positions they hold today. Lots more shuffling on that side of the house.

Right now, United doesn't have a Chief Operating Officer, so the combined airline will go back to the future and put current Chief Administrative Officer Pete McDonald back into the position he held in the past. This one was a surprise to me, but I suppose at least one of the key offices had to go to a United person. Maybe we should start calling Pete, "Token." Continental hasn't said anything, but I would imagine that current COO Mark Moran will leave the company. Then again, he was just promoted to COO earlier this year, so maybe he'll go back to a slightly lower level. For what it's worth, the airline said he will lead the integration on to a single certificate, but that's not a long term job.

One of the more interesting moves is in the loyalty program arena. Continental has not historically given its loyalty program an executive level leader, but United has. The combined airline will keep the United structure, but it will have a new leader. Graham Atkinson, the current leader of the loyalty program, looks like he's used up his last life. He will be leaving the combined airline, and that's too bad. Graham is actually one of the United execs that I had the most respect for.

In his place, Jeff Foland will be stepping in. Jeff had originally focused on sales at United, but he's grown into marketing as well now. I know that many liked what he did in the sales arena, but if you ask any corporate travel manager, they'll be quite happy to see that falling under a former Continental exec. Continental's sales operation has much greater respect.

Continuing to have an exec running loyalty tells me that they're still considering the possibility of spinning off the program into a separate company one of these days. I suppose it's too early to tell, but the structure lends itself to that quite nicely.

There were a few other non-core execs going to current United folks (general counsel, CIO, etc) but the core leadership team is heavily-weighted toward Continental. The next round of leadership appointments will potentially be even more telling, but so far, it's going just as I would have expected.

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Image via Continental/United